Boralex Steps up Profitability in the First Quarter

Growth strategy delivers upbeat results

MONTREAL, May 9, 2012 /CNW Telbec/ - Boralex Inc. ("Boralex" or the "Corporation") recorded $57.5 million in revenues for the three-month period ended March 31, 2012 compared with $57.3 million in the first quarter of 2011. However, excluding the first quarter 2011 results of the Dolbeau, Québec thermal power station which ceased operations in the third quarter of 2011, revenues were up 7.7%. This improvement was driven by organic growth on the order of 13% in the output of the wind and hydroelectric power segments, higher average selling prices for Boralex and the contribution of the Corporation's first solar power station, commissioned in June 2011.

The same drivers fostered the growth in earnings before interest, taxes, depreciation and amortization ("EBITDA") which came in at $33.3 million, for a margin of 57.9% of revenues, up from $31.2 million and a margin of 54.5% for the first quarter of 2011. Excluding Dolbeau, EBITDA climbed 12.5%. The wind and hydroelectric power segments posted combined EBITDA growth of $3.4 million or 14.2%, while the solar power station contributed an additional $0.5 million. In addition to the strong performance of the wind, hydroelectric and solar power segments, which generated an EBITDA margin of 79.7%, the increase in the average margin reflected the larger weight in Boralex's energy portfolio of these three segments, in which nearly all energy assets are covered by long-term power sales contracts. Accordingly, following the asset acquisitions and disposals over the past three years, 96% of Boralex's energy portfolio currently in operation is covered by indexed fixed-price long-term power sales contracts—the cornerstone of the Corporation's development strategy going forward.

(in millions of Canadian dollars, except per share data and EBITDA margin)
		Three-month periods ended March 31
Net earnings from continuing operations:		2012	2011
Revenues from energy sales		57.5	57.3
EBITDA		33.3	31.2
EBITDA margin		57.9%	54.5%
Net earnings from continuing operations*		4.8	3.9
	Per share (basic)	$0.13	$0.11
Cash flows from operations		21.8	17.5
	Per share (basic)	$0.58	$0.46
* Attributable to shareholders of Boralex.

Boralex ended the first quarter of 2012 with $4.8 million in net earnings from continuing operations attributable to shareholders or $0.13 per share (basic), compared with $3.9 million or $0.11 per share (basic) for the same period of fiscal 2011. Net earnings for the first quarter of 2011 notably included $1.7 million in net gains on the sale of assets, while net earnings for the first quarter of 2012 included $0.5 million in net asset impairment. Excluding these items not related to operations, adjusted net earnings from continuing operations attributable to shareholders surged 141.0%. Cash flows from operations amounted to $21.8 million or $0.58 per share, up 25%. Furthermore, under the terms of the December 2011 sale of the U.S. thermal power stations, the Corporation recognized $2.3 million in after-tax proceeds on the sale of the balance of the RECs generated by these power stations in 2011.

"Our first-quarter results show the decisive benefits of the strategic approach we've taken over the past three years to lay the foundation for superior, balanced and sustainable growth. To date, our strategic decisions have enhanced our portfolio asset value and profit margins, generated steadier, more predictable revenue and cash flow streams and reduced our business risk exposures," indicated Patrick Lemaire, Boralex President and CEO.

"Lastly, due to the sale of less strategic assets and to Boralex's self-financing capacity, we have approximately $160 million in available cash resources, providing a powerful lever for expansion in our key markets, particularly in the wind power segment. With the recent acquisition of a power sales contract covering a 50 MW wind power project to be developed in the Témiscouata area, 441 MW in additional wind power capacity will be commissioned in Québec by late 2015, of which Boralex owns 246 MW. In addition, we continue to keep a watchful eye on opportunities to acquire advanced-phase development projects in Canada and Europe," concluded Mr. Lemaire.

About Boralex
Boralex is a power producer whose core business dedicated to the development and the operation of renewable energy power stations. Currently, the Corporation operates an asset base with an installed capacity of nearly 500 MW in Canada, the Northeastern United States and France. Boralex is also committed under power development projects, both independently and with Canadian and European partners, to add approximately 450 MW of power. With more than 200 employees, Boralex is known for its diversified expertise and in-depth experience in four power generation types — wind, hydroelectric, thermal and solar. Boralex's shares and convertible debentures are listed on the Toronto Stock Exchange under the ticker symbols BLX and BLX.DB, respectively. More information is available at www.boralex.com or www.sedar.com.

Certain statements contained in this press release, including those regarding future results and performance, are forward-looking statements based on current expectations. The accuracy of such statements is subject to a number of risks, uncertainties and assumptions that may cause actual results to differ materially from those projected, including, but not limited to, the general impact of economic conditions, raw material price increases and availability, currency fluctuations, volatility in electricity selling prices, the company's financing capacity, negative changes in general market conditions and regulations affecting the industry, as well as other factors listed in the Company's filings with different securities commissions.

There can be no assurance as to the materialization of the results, performance or achievements as expressed or implied by forward-looking statements. The reader is cautioned not to place undue reliance on such forward-looking statements. Unless required to do so under applicable securities legislation, Boralex management does not assume any obligation to update or revise forward-looking statements to reflect new information, future events or other changes.

Excerpts from the unaudited interim financial statements included in this press release also contain certain non-GAAP financial measures. To assess the performance of its assets and reporting segments, the Corporation uses EBITDA, EBITDA margin, cash flows from operations, and cash flows from operations per share as performance measures, as defined in the accompanying financial statements. These non-GAAP measures have no standardized meaning under IFRS. As a result, these measures may not be comparable to similarly named measures used by other companies.

Consolidated Statements of Financial Position

(in thousands of Canadian dollars) (unaudited)	As at March 31 2012	As at December 31 2011
ASSETS
Cash and cash equivalents	157,417	144,703
Restricted cash	17,528	18,288
Trade and other receivables	39,515	50,500
Inventories	3,492	3,573
Available-for-sale financial asset	2,144	2,208
Prepaid expenses	2,566	2,137
CURRENT ASSETS	222,662	221,409
Property, plant and equipment	632,676	643,047
Energy sales contracts	96,000	97,705
Water rights	111,103	111,844
Goodwill	38,063	38,063
Other intangible assets	7,173	5,285
Interest in the Joint Venture	55,014	45,266
Other non-current assets	13,203	14,236
NON-CURRENT ASSETS	953,232	955,446
TOTAL ASSETS	1,175,894	1,176,855
LIABILITIES
Trade and other payables	37,873	34,209
Current portion of debt	23,676	26,659
Current income tax liability	2,216	10,776
Other current financial liabilities	26,025	29,757
CURRENT LIABILITIES	89,790	101,401
Non-current debt	470,440	479,525
Convertible debentures	224,036	223,347
Deferred income tax liability	29,624	26,031
Other non-current financial liabilities	15,373	14,273
Other non-current liabilities	3,918	3,400
NON-CURRENT LIABILITIES	743,391	746,576
TOTAL LIABILITIES	833,181	847,977
EQUITY
Equity attributable to shareholders	335,419	321,764
Non-controlling interests	7,294	7,114
TOTAL EQUITY	342,713	328,878
TOTAL LIABILITIES AND EQUITY	1,175,894	1,176,855

Consolidated Statements of Earnings

		Three-month periods ended March 31
(in thousands of Canadian dollars, except per share amounts) (unaudited)		2012	2011
REVENUES
Revenues from energy sales		57,451	57,266
Other income		150	152
		57,601	57,418
COSTS AND OTHER EXPENSES
Operating expenses		19,464	21,331
Administrative		4,167	3,974
Development		671	884
Amortization		13,935	13,851
Other gains		-	(2,377)
Impairment of property, plant and equipment and intangible assets		823	-
		39,060	37,663
OPERATING INCOME		18,541	19,755
Financing costs		12,103	11,975
Foreign exchange loss		121	1,537
Net loss (gain) on financial instruments		(337)	313
EARNINGS BEFORE THE FOLLOWING ITEMS		6,654	5,930
Share in earnings of the Joint Venture		(43)	-
Income tax expense		1,759	1,971
NET EARNINGS FROM CONTINUING OPERATIONS		4,938	3,959
Net earnings from discontinued operations		2,323	3,108
NET EARNINGS		7,261	7,067
NET EARNINGS ATTRIBUTABLE TO:
	Shareholders of Boralex	7,149	7,011
	Non-controlling interests	112	56
NET EARNINGS		7,261	7,067
NET EARNINGS ATTRIBUTABLE TO SHAREHOLDERS OF BORALEX:
	Continuing operations	4,826	3,903
	Discontinued operations	2,323	3,108
		7,149	7,011
BASIC NET EARNINGS PER SHARE ATTRIBUTABLE TO SHAREHOLDERS OF BORALEX:
	Continuing operations	$0.13	$0.11
	Discontinued operations	$0.06	$0.08
		$0.19	$0.19
DILUTED NET EARNINGS PER SHARE ATTRIBUTABLE TO SHAREHOLDERS OF BORALEX:
	Continuing operations	$0.12	$0.10
	Discontinued operations	$0.06	$0.08
		$0.18	$0.18

Consolidated Statements of Comprehensive Income

		Three-month periods ended March 31
(in thousands of Canadian dollars) (unaudited)		2012	2011
NET EARNINGS		7,261	7,067
OTHER COMPREHENSIVE INCOME (LOSS)
Translation adjustments
	Unrealized foreign exchange gain (loss) on translation of financial statements of self-sustaining foreign operations	(1,385)	347
Cash flow hedges
	Change in fair value of financial instruments	(1,548)	1,042
	Hedging items realized and recognized in net earnings	4,139	1,093
	Hedging items realized and recognized in statement of financial position	-	120
	Taxes	(413)	(688)
Cash flow hedges - Joint Venture
	Change in fair value of financial instruments	7,762	-
	Taxes	(2,064)	-
Available-for-sale financial asset
	Change in fair value of an available-for-sale financial asset	(64)	1,378
	Items realized and recognized in net earnings	-	(624)
Discontinued operations		-	(2,021)
Total other comprehensive income		6,427	647
COMPREHENSIVE INCOME		13,688	7,714
COMPREHENSIVE INCOME ATTRIBUTABLE TO:
	Shareholders of Boralex	13,600	6,752
	Non-controlling shareholders	88	962
COMPREHENSIVE INCOME		13,688	7,714
COMPREHENSIVE INCOME ATTRIBUTABLE TO SHAREHOLDERS OF BORALEX
	Continuing operations	11,277	5,665
	Discontinued operations	2,323	1,087
		13,600	6,752

Consolidated Statements of Changes in Equity

							Three-month period ended March 31
								2012
	Equity attributable to shareholders
(in thousands of Canadian dollars) (unaudited)	Capital stock	Equity component of convertible debentures	Contributed surplus	Retained earnings	Other comprehensive loss	Total	Non-controlling interests	Total equity
Balance as at January 1, 2012	222,758	14,379	6,106	144,501	(65,980)	321,764	7,114	328,878
Net earnings	-	-	-	7,149	-	7,149	112	7,261
Other comprehensive income (loss)	-	-	-	-	6,451	6,451	(24)	6,427
Comprehensive income	-	-	-	7,149	6,451	13,600	88	13,688
Conversion of convertible debentures	5	-	-	-	-	5	-	5
Stock option expense	-	-	50	-	-	50	-	50
Contribution of non-controlling interest	-	-	-	-	-	-	92	92
Balance as at March 31, 2012	222,763	14,379	6,156	151,650	(59,529)	335,419	7,294	342,713
							Three-month period ended March 31
								2011
	Equity attributable to shareholders
(in thousands of Canadian dollars) (unaudited)	Capital stock	Equity component of convertible debentures	Contributed surplus	Retained earnings	Other comprehensive loss	Total	Non-controlling interests	Total equity
Balance as at January 1, 2011	222,853	14,488	5,028	141,693	(24,705)	359,357	8,332	367,689
Net earnings	-	-	-	7,011	-	7,011	56	7,067
Other comprehensive income (loss)	-	-	-	-	(259)	(259)	906	647
Comprehensive income (loss)	-	-	-	7,011	(259)	6,752	962	7,714
Conversion of convertible debentures	17	-	-	-	-	17	-	17
Stock option expense	-	-	161	-	-	161	-	161
Balance as at March 31, 2011	222,870	14,488	5,189	148,704	(24,964)	366,287	9,294	375,581

Consolidated Statements of Cash Flows

		Three-month periods ended March 31
(in thousands of Canadian dollars) (unaudited)		2012	2011
Net earnings attributable to shareholders of Boralex		7,149	7,011
Less: Net earnings from discontinued operations		2,323	3,108
Net earnings from continuing operations attributable to shareholders of Boralex		4,826	3,903
Financing costs		12,103	11,975
Interest paid		(10,354)	(12,402)
Income tax expense		1,759	1,971
Income taxes paid		(1,696)	(1,441)
Non-cash items in earnings:
	Amortization	13,935	13,851
	Other gains	-	(2,377)
	Impairment of property, plant and equipment and intangible assets	823	-
	Net loss (gain) on financial instruments	(337)	313
	Share in earnings of the Joint Venture	(43)	-
	Other	833	1,660
		21,849	17,453
Change in non-cash items related to operating activities		12,691	15,170
NET CASH FLOWS RELATED TO OPERATING ACTIVITIES		34,540	32,623
Additions to property, plant and equipment		(1,495)	(10,498)
Change in restricted cash		760	9,412
Increase in interest in the Joint Venture		(1,858)	-
Development projects		(1,010)	(593)
Other		68	47
NET CASH FLOWS RELATED TO INVESTING ACTIVITIES		(3,535)	(1,632)
Decrease in bank loans and overdraft		-	(201)
Net increase in non-current debt		-	11,737
Repayments on non-current debt		(12,076)	(12,061)
Other		12	-
NET CASH FLOWS RELATED TO FINANCING ACTIVITIES		(12,064)	(525)
Cash from discontinued operations		(5,713)	7,486
TRANSLATION ADJUSTMENT ON CASH AND CASH EQUIVALENTS		(514)	666
NET INCREASE IN CASH AND CASH EQUIVALENTS		12,714	38,618
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD		144,703	92,650
CASH AND CASH EQUIVALENTS - END OF PERIOD		157,417	131,268

Segmented Information

The Corporation's power stations are grouped into four distinct operating segments—wind, hydroelectric, thermal and solar power. The Corporation operates under one reportable segment: power generation. The classification of these operating segments is based on the different cost structures relating to each of the four types of power stations. The same accounting rules are used for segmented information as apply to the consolidated accounts.

Following the sale of its five U.S. wood-residue thermal power stations, the Corporation redefined its operating segments. Previously, operations were grouped into five distinct segments. Wood-residue thermal power stations and natural gas thermal power stations have been combined in a single segment called Thermal Power Stations. The comparative data have been adjusted to reflect this change. In addition, the data related to discontinued operations have been excluded as they are reported on a separate line in the Consolidated Statement of Earnings.

The operating segments are presented according to the same criteria used to prepare the internal report submitted to the chief operating decision-maker, who allocates resources and assesses operating segment performance. The chief operating decision-maker is considered to be the President and Chief Executive Officer, who assesses segment performance based on production of electricity, revenues from energy sales, EBITDA and cash flows from operations.

EBITDA does not have a standardized meaning under IFRS; accordingly, it may not be comparable to similarly named measures used by other companies. Investors should not view EBITDA as an alternative measure to, for example, net earnings, or as a measure of operating results, which are IFRS measures.

EBITDA is reconciled to the most comparable IFRS measure, namely, net earnings attributable to shareholders of Boralex, in the following table:

	Three-month periods ended March 31
(in thousands of Canadian dollars) (unaudited)	2012	2011
Net earnings attributable to shareholders of Boralex	7,149	7,011
Net earnings from discontinued operations	(2,323)	(3,108)
Non-controlling interests	112	56
Income tax expense	1,759	1,971
Net loss (gain) on financial instruments	(337)	313
Foreign exchange loss	121	1,537
Financing costs	12,103	11,975
Impairment of property, plant and equipment and intangible assets	823	-
Other gains	-	(2,377)
Amortization	13,935	13,851
EBITDA	33,342	31,229

Investors should not consider cash flows from operations as an alternative measure to cash flows related to operating activities, which is an IFRS measure.

Cash flows from operations are reconciled to the most comparable IFRS measure, namely, cash flows related to operating activities in the following table:

		Three-month periods ended March 31
(in thousands of Canadian dollars) (unaudited)		2012		2011
Net cash flows related to operating activities		34,540		32,623
Less:
Change in non cash items related to operating activities		12,691		15,170
CASH FLOWS FROM OPERATIONS		21,849		17,453

Information by Operating Segment

	Three-month periods ended March 31
(in thousands of Canadian dollars, unless otherwise specified) (unaudited)	2012	2011
Power production (MWh)
Wind power stations	172,405	152,570
Hydroelectric power stations	163,095	145,004
Thermal power stations	118,323	175,046
Solar power station	1,329	-
	455,152	472,620
Revenues from energy sales
Wind power stations	20,647	18,273
Hydroelectric power stations	13,986	12,732
Thermal power stations	22,242	26,261
Solar power station	576	-
	57,451	57,266
EBITDA
Wind power stations	16,934	15,066
Hydroelectric power stations	10,644	9,076
Thermal power stations	8,395	11,532
Solar power station	495	-
Corporate and eliminations	(3,126)	(4,445)
	33,342	31,229
Additions to property, plant and equipment
Wind power stations	347	8,119
Hydroelectric power stations	189	174
Thermal power stations	66	1,159
Solar power station	692	951
Corporate and eliminations	201	95
	1,495	10,498
	As at March 31	As at December 31
(in thousands of Canadian dollars) (unaudited)	2012	2011
Total assets
Wind power stations	535,120	528,521
Hydroelectric power stations	366,784	366,099
Thermal power stations	101,758	101,683
Solar power station	19,593	23,586
Corporate	152,639	156,966
	1,175,894	1,176,855
Total liabilities
Wind power stations	386,466	392,611
Hydroelectric power stations	142,438	143,439
Thermal power stations	32,951	29,581
Solar power station	17,083	21,043
Corporate	254,243	261,303
	833,181	847,977

Information by Geographic Segment

	Three-month periods ended March 31
(in thousands of Canadian dollars, unless otherwise specified) (unaudited)	2012	2011
Power production (MWh)
Canada	226,953	266,747
United States	113,472	100,035
France	114,727	105,838
	455,152	472,620
Revenues from energy sales
Canada	31,170	33,594
United States	8,403	7,786
France	17,878	15,886
	57,451	57,266
EBITDA
Canada	17,327	17,091
United States	6,646	5,698
France	9,369	8,440
	33,342	31,229
Additions to property, plant and equipment
Canada	365	6,962
United States	85	170
France	1,045	3,366
	1,495	10,498
	As at March 31	As at December 31
(in thousands of Canadian dollars) (unaudited)	2012	2011
Total assets
Canada	694,011	679,354
United States	200,573	209,003
France	281,310	288,498
	1,175,894	1,176,855
Non-current assets
Canada	548,433	543,319
United States	151,782	156,631
France	253,017	255,496
	953,232	955,446
Total liabilities
Canada	487,353	483,731
United States	111,980	122,827
France	233,848	241,419
	833,181	847,977

 

Media
Ms. Andréan Gagné
Advisor, Communications
Boralex Inc.
514-985-1353
[email protected] 

Investors
Mr. Marc Jasmin
Boralex Inc.
514-284-9868
[email protected]