Boralex releases 2013 first-quarter results

MONTREAL, May 8, 2013 /PRNewswire/ - Boralex Inc. ("Boralex" or the "Corporation") (TSX: BLX) maintained its earnings before interest, income taxes and amortization ("EBITDA") during the first quarter of 2013, while improving its profit margin due to the higher weight of the wind power segment.

FINANCIAL HIGHLIGHTS

   
(In millions of dollars, except per share amounts and EBITDA margin) Three-month periods
ended March 31
  2013 2012
Revenues from energy sales 50.7 57.5
EBITDA 33.3 33.3
EBITDA margin (%) 65.7 57.9
Net earnings* 4.0 4.8
  Per share (basic) ($) 0.11 0.13
Cash flows from operations 23.0 21.8
  Per share (basic) ($) 0.61 0.58
*Attributable to shareholders of Boralex for continuing operations

The 2013 first-quarter results confirmed the dominant and strategic role of the wind and hydroelectric power segments as Boralex's main performance drivers. Wind power segment output, revenues and EBITDA grew by 10.8%, 14.3% and 17.1%, respectively, over the same quarter of 2012. With a profit margin on the order of 84%, the wind power segment had a 55% share of aggregate EBITDA before the corporate segment.

This strategy has proven beneficial, as the contribution from the St-Patrick wind farm almost completely offset the decline in production resulting primarily from the shutdown of operations at the Kingsey Falls thermal power station.

"In line with its development strategy, Boralex is building on the strengths of its wind and hydroelectric power segments to continue generating growth in Canada and France. In light of its available financial resources, including $122 million in cash, Boralex has the means to fund the equity portion of wind power projects totalling approximately 100 MW in additional capacity on top of the projects currently being developed," said President and CEO Patrick Lemaire. "Boralex's objectives are to achieve an installed capacity of approximately 1,000 MW and double its annual EBITDA to exceed $200 million by the end of 2016," added Mr. Lemaire.

Building on 286 MW of wind power assets currently in operation, Boralex will add 528 MW under long-term power sales contracts in the coming years, of which the Corporation's net interest amounts to 334 MW. In France, there are 88 MW in projects currently being developed with commissioning set between late 2013 and summer 2014. In Canada, 246 MW will be commissioned between Q4 2013 and Q4 2015, including Phase 1 of the Seigneurie de Beaupré Wind Farms, one of Canada's largest wind power sites, to be commissioned in December 2013. Incidentally, construction work at the site is on schedule and on budget.

However, in the hydroelectric power segment, despite a slight drop in production output owing in particular to less favourable water conditions in the Northeastern United States than in 2012, Boralex posts increases in revenues and EBITDA of 0.9% and 6.0%, respectively, in addition to generating a solid EBITDA margin of 80.0%. The decline in production in this segment, relative to their historical averages, was almost completely offset by a favourable price effect experienced in the NYSIO open market by the four U.S. power stations not covered by power sales contracts.

On the hydroelectric development front, construction is proceeding according to plan at the Jamie Creek power station in British Colombia, Canada, with commissioning set for 2014. The Corporation's growth outlook for this segment in Ontario and British Columbia remains good.

Excluding the Kingsey Falls power station's shutdown, the thermal power segment recorded increases in production and EBITDA of 18% and $1.2 million, respectively, fuelled by improved performance at the Senneterre power station in Canada.

About Boralex
Boralex is a power producer whose core business is dedicated to the development and the operation of renewable energy power stations. Currently, the Corporation operates an asset base with an installed capacity of almost 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 550 MW of power that will be put in service by the end of 2015. 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 availability and price increases, currency fluctuations, volatility in the selling price of electricity, the Corporation's financing capacity, negative changes in general market conditions and regulations affecting its industry, as well as other factors listed in the Corporation'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.

The summarized financial statements included in this press release also contain certain non-IFRS financial measures. To assess the performance of its assets and reporting segments, the Corporation uses EBITDA, cash flows from operations, and adjusted net earnings as performance measures, as defined in the accompanying unaudited interim condensed consolidated financial statements. These non-IFRS 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 Financial Statements
Consolidated Statements of Financial Position

  As at
March 31,
As at
December 31,
(in thousands of Canadian dollars) (unaudited) 2013 2012
ASSETS    
Cash and cash equivalents 115,737 107,138
Restricted cash 5,818 5,063
Trade and other receivables 41,085 45,589
Inventories 3,978 4,404
Available-for-sale financial asset 2,564 3,009
Prepaid expenses 3,350 2,137
CURRENT ASSETS 172,532 167,340
     
Property, plant and equipment 684,673 689,024
Other intangible assets 251,848 253,115
Goodwill 48,600 48,663
Interest in the Joint Venture 58,166 58,994
Other non-current assets 12,585 12,735
NON-CURRENT ASSETS 1,055,872 1,062,531
TOTAL ASSETS 1,228,404 1,229,871
LIABILITIES    
Trade and other payables 41,853 46,945
Current portion of debt 99,812 98,570
Current income tax liability 1,793 1,741
Other current financial liabilities 25,058 25,508
CURRENT LIABILITIES 168,516 172,764
     
Non-current debt 417,457 423,616
Convertible debentures 227,059 226,299
Deferred income tax liability 31,568 29,514
Other non-current financial liabilities 23,084 24,698
Other non-current liabilities 10,612 10,611
NON-CURRENT LIABILITIES 709,780 714,738
TOTAL LIABILITIES 878,296 887,502
EQUITY    
Equity attributable to shareholders 326,764 319,868
Non-controlling shareholders 23,344 22,501
TOTAL EQUITY 350,108 342,369
TOTAL LIABILITIES AND EQUITY 1,228,404 1,229,871


Consolidated Statements of Earnings

  Three-month periods
ended March 31
(in thousands of Canadian dollars, except per share amounts) (unaudited) 2013 2012
     
REVENUES    
Revenues from energy sales 50,736 57,451
Other income 315 150
  51,051 57,601
     
COSTS AND OTHER EXPENSES    
Operating expenses 12,849 20,426
Administrative 3,654 3,205
Development 1,080 671
Amortization 13,501 13,935
Other gains (34)
Impairment of property, plant and equipment and intangible assets 823
  31,050 39,060
     
OPERATING INCOME 20,001 18,541
     
Financing costs 12,424 12,103
Foreign exchange loss (gain) (8) 121
Net loss (gain) on financial instruments 203 (337)
     
     
EARNINGS BEFORE THE FOLLOWING ITEMS 7,382 6,654
     
Share in earnings (loss) of the Joint Venture (215) 43
Income tax expense 2,730 1,759
     
     
NET EARNINGS FROM CONTINUING OPERATIONS 4,437 4,938
Net earnings from discontinued operations 161 2,323
NET EARNINGS 4,598 7,261
     
NET EARNINGS ATTRIBUTABLE TO:    
  Shareholders of Boralex 4,168 7,149
  Non-controlling shareholders 430 112
NET EARNINGS 4,598 7,261
     
NET EARNINGS ATTRIBUTABLE TO SHAREHOLDERS OF BORALEX:    
  Continuing operations 4,007 4,826
  Discontinued operations 161 2,323
  4,168 7,149
     
NET EARNINGS PER SHARE (BASIC) ATTRIBUTABLE TO SHAREHOLDERS OF BORALEX:    
  Continuing operations $0.11 $0.13
  Discontinued operations $0.06
  $0.11 $0.19
     
NET EARNINGS PER SHARE (DILUTED) ATTRIBUTABLE TO SHAREHOLDERS OF BORALEX:    
  Continuing operations $0.11 $0.12
  Discontinued operations $0.06
  $0.11 $0.18


Consolidated Statements of Comprehensive Income

  Three-month periods
ended March 31
(in thousands of Canadian dollars) (unaudited) 2013 2012
NET EARNINGS 4,598 7,261
     
Other comprehensive income to be subsequently reclassified to net earnings when certain
conditions are met
   
Translation adjustements:    
  Unrealized foreign exchange gain (loss) on translation of financial statements of self-sustaining foreign
operations
981 (1,385)
Cash flow hedges:    
  Change in fair value of financial instruments 257 (1,548)
  Hedging items realized and recognized in net earnings 1,851 4,139
  Taxes (650) (413)
Cash flow hedges - Joint Venture:    
  Change in fair value of financial instruments (613) 7,762
  Taxes 79 (2,064)
Available-for-sale financial asset:    
  Change in fair value of an available-for-sale financial asset 789 (64)
  Items realized and recognized in net earnings (37)
Total other comprehensive income 2,657 6,427
COMPREHENSIVE INCOME 7,255 13,688
     
COMPREHENSIVE INCOME ATTRIBUTABLE TO:    
  Shareholders of Boralex 6,738 13,600
  Non-controlling shareholders 517 88
COMPREHENSIVE INCOME 7,255 13,688
     
COMPREHENSIVE INCOME ATTRIBUTABLE TO SHAREHOLDERS OF BORALEX:    
  Continuing operations 6,577 11,277
  Discontinued operations 161 2,323
  6,738 13,600


Consolidated Statements of Changes in Equity

                            Three-month period
ended March 31
        2013
  Equity attributable to shareholders      
(in thousands of Canadian dollars) (unaudited) Capital
stock
  Equity
component of
convertible
debentures
  Contributed
surplus
  Retained
earnings
  Other
comprehensive
income (loss)
  Total   Non-controlling
shareholders
Total
equity
BALANCE AS AT JANUARY 1, 2013 222,870   14,379   6,945   144,492   (68,818)   319,868   22,501 342,369
                             
Net earnings       4,168     4,168   430 4,598
Other comprehensive income         2,570   2,570   87 2,657
COMPREHENSIVE INCOME       4,168   2,570   6,738   517 7,255
                             
Conversion of convertible debentures 2           2   2
Stock option expense     156       156   156
Contribution of non-controlling
shareholders
            326 326
BALANCE AS AT MARCH 31, 2013 222,872   14,379   7,101   148,660   (66,248 ) 326,764   23,344 350,108
                             
                             
                          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
income (loss)
  Total   Non-controlling
shareholders
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 shareholders             92 92
BALANCE AS AT MARCH 31, 2012 222,763   14,379   6,156   151,650   (59,529)   335,419   7,294 342,713


Consolidated Statements of Cash Flows

  Three-month periods
ended March 31
(in thousands of Canadian dollars) (unaudited) 2013 2012
Net earnings attributable to shareholders of Boralex 4,168 7,149
Less: Net earnings from discontinued operations 161 2,323
Net earnings from continuing operations attributable to shareholders of Boralex 4,007 4,826
Financing costs 12,424 12,103
Interest paid (10,013) (10,354)
Income tax expense 2,730 1,759
Income taxes paid (757) (1,696)
Non-cash items in earnings:    
  Net loss (gain) on financial instruments 203 (337)
  Share in loss (earnings) of the Joint Venture 215 (43)
  Amortization 13,501 13,935
  Impairment of property, plant and equipment and intangible assets 823
  Other gains (34)
  Other 678 833
  22,954 21,849
Change in non-cash items related to operating activities (504) 11,225
NET CASH FLOWS RELATED TO OPERATING ACTIVITIES 22,450 33,074
     
Additions to property, plant and equipment (8,381) (1,495)
Change in restricted cash (755) 760
Increase in interest in the Joint Venture (1,858)
Development projects (977) (1,010)
Other (19) 68
NET CASH FLOWS RELATED TO INVESTING ACTIVITIES (10,132) (3,535)
     
Increase in non-current debt 5,050
Repayments on non-current debt (9,553) (12,076)
Contribution of non-controlling shareholders 323
Other 12
NET CASH FLOWS RELATED TO FINANCING ACTIVITIES (4,180) (12,064)
Cash from discontinued operations 98 (4,247)
TRANSLATION ADJUSTMENT ON CASH AND CASH EQUIVALENTS 363 (514)
NET CHANGE IN CASH AND CASH EQUIVALENTS 8,599 12,714
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD 107,138 144,703
CASH AND CASH EQUIVALENTS - END OF PERIOD 115,737 157,417


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 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 for the consolidated accounts.

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

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) 2013 2012
Net earnings attributable to shareholders of Boralex 4,168 7,149
Net earnings from discontinued operations (161) (2,323)
Non-controlling shareholders 430 112
Income tax expense 2,730 1,759
Net loss (gain) on financial instruments 203 (337)
Foreign exchange loss (gain) (8) 121
Financing costs 12,424 12,103
Impairment of property, plant and intangible assets 823
Other gains (34)
Amortization 13,501 13,935
EBITDA 33,253 33,342


Cash flows from operations are equal to net cash flows related to operating activities before change in non-cash items related to operating activities. Management uses this measure to assess cash flows generated by the Corporation's operations and its capacity to finance its expansion through those funds. In light of the seasonal nature of the Corporation's operations and development activities, changes in non-cash items can vary considerably. In addition, development activities result in significant changes in Trade and other payables during the construction period, as well as an initial injection of working capital at project start-up. Accordingly, the Corporation considers it more representative not to integrate changes in non-cash items in this performance measure.

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, net cash flows related to operating activities, in the following table:

  Three-month periods
ended March 31
(in thousands of Canadian dollars) (unaudited) 2013 2012
Net cash flows related to operating activities 22,450 33,074
Change in non-cash items related to operating activities (504) 11,225
CASH FLOWS FROM OPERATIONS 22,954 21,849

The following table reconciles net earnings attributable to shareholders of Boralex as reported in the financial statements with adjusted net earnings:

  Three-month periods
ended March 31
(in thousands of Canadian dollars) (unaudited) 2013 2012
Net earnings attributable to shareholders of Boralex 4,168 7,149
Net earnings from discontinued operations (161) (2,323)
Specific items*:    
  Impairment (reversal) of property, plant and equipment and intangible assets 492
ADJUSTED NET EARNINGS - CONSOLIDATED 4,007 5,318

* Net of income taxes


Information by Operating Segment

  Three-month periods
ended March 31
Three-month periods
ended March 31
(in thousands of Canadian dollars) (unaudited) 2013 2012 2013 2012
  Power production (MWh) Revenues from energy sales
Wind power stations 191,028 172,405 23,598 20,647
Hydroelectric power stations 148,473 163,095 14,113 13,986
Thermal power stations 70,879 118,323 12,546 22,242
Solar power station 1,079 1,329 479 576
  411,459 455,152 50,736 57,451
  EBITDA Additions to property, plant
and equipment
Wind power stations 19,875 16,977 4,459 347
Hydroelectric power stations 11,284 10,644 2,205 189
Thermal power stations 4,668 8,395 18 66
Solar power station 382 495 527 692
Corporate and eliminations (2,956) (3,169) 1,172 201
  33,253 33,342 8,381 1,495
         
      As at
March 31,
As at
December 31,
      2013 2012
Total assets        
Wind power stations     591,545 597,237
Hydroelectric power stations     389,757 382,515
Thermal power stations     71,813 84,480
Solar power station     20,252 20,779
Corporate     155,037 144,860
      1,228,404 1,229,871
         
Total liabilities        
Wind power stations     495,321 505,713
Hydroelectric power stations     149,781 148,477
Thermal power stations     26,561 26,914
Solar power station     20,479 20,931
Corporate     186,154 185,467
      878,296 887,502


Information by Geographic Segment

  Three-month periods
ended March 31
Three-month periods
ended March 31
(in thousands of Canadian dollars) (unaudited) 2013 2012 2013 2012
  Power production (MWh) Revenues from energy sales
Canada 177,204 226,953 21,841 31,170
United States 98,568 113,472 8,340 8,403
France 135,687 114,727 20,555 17,878
  411,459 455,152 50,736 57,451
  EBITDA Additions to property, plant
and equipment
Canada 14,629 17,327 3,328 365
United States 6,732 6,646 43 85
France 11,892 9,369 5,010 1,045
  33,253 33,342 8,381 1,495
         
      As at
March 31,
As at
December 31,
      2013 2012
Total assets        
Canada     642,324 642,985
United States     193,321 186,491
France     392,759 400,395
      1,228,404 1,229,871
         
Non-current assets, excluding interest in the Joint Venture        
Canada     497,066 498,019
United States     146,760 145,604
France     353,880 359,914
      997,706 1,003,537
         
Total liabilities        
Canada     479,793 481,774
United States     111,567 109,541
France     286,936 296,187
      878,296 887,502

 

 

SOURCE BORALEX INC.



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