• E-mail
• Print
• Comment
• Font Size
• Digg
• del.icio.us
• Discuss article

Boralex: Major Rise in Operating Income in Second Quarter 2008

Posted on: Friday, 8 August 2008, 09:01 CDT

MONTREAL, Aug. 8 /PRNewswire-FirstCall/ -- In the second quarter of 2008, Boralex Inc. ("Boralex" or the "Corporation") benefited from higher electricity selling prices and the expansion of its wind power segment, recording revenue of $40.4 million, an increase of close to 25%.

(in millions of dollars, except per share data) ------------------------------------------------------------------------- Three months ended Six months ended --------------------------------------------- June 30, June 30, June 30, June 30, 2008 2007 2008 2007 --------------------------------------------- Revenue from energy sales 40.4 32.4 95.5 83.2 EBITDA 12.6 7.0 36.5 32.7 Net earnings 1.1 4.8 10.4 14.6 Basic net earnings per share $0.03 $0.15 $0.27 $0.47 Cash flow from operations 9.4 6.7 30.2 26.8 -------------------------------------------------------------------------

In the second quarter ended June 30, 2008, earnings before interest, taxes, depreciation and amortization (EBITDA) jumped 80% to $12.6 million. This major increase is mainly due to the sharp rise in selling prices in the United States and the sale of RECs. When revenue and EBITDA from the first quarter are combined with that of the second, Boralex recorded a 15% increase in revenue and close to a 12% increase in EBITDA in the first half of 2008.

Boralex closed the second quarter of 2008 with net earnings of $1.1 million ($0.03 per share) compared to net earnings of $4.8 million ($0.15 per share) for the same period a year earlier. The decrease stems primarily from two non-recurring elements that had a positive impact on the second quarter of 2007: a gain posted following termination of hedging relations for interest rate swaps and favourable income tax adjustments. The decrease in net earnings per share is also due to the increase in the weighted average number of shares outstanding resulting from the June 2007 share issue. Excluding the gain recorded in 2007 pursuant to the termination of the hedging relationship, net earnings for the second quarter of 2008 would have risen 37.5% compared to the same period in 2007.

Also, the increase in operating income translated in significant liquidities as the Corporation generated $9.4 million of cash flows from operations, a 40% increase over the amounts generated for the same period last year. Accordingly, Boralex is proud to have access to $78 million of cash on its balance sheet as at June 30, 2008, which ensures its financial flexibility, enabling and facilitating future development projects.

Patrick Lemaire, President and Chief Executive Officer, noted that "these excellent results reflect the dynamic position of Boralex in the renewable energy market and its vitality." He added that the "recent acquisition of a generating station in British Columbia, the purchase of a 100 MW potential wind power site in Ontario, plus, in partnership with Gaz Metro, the wining on May 5th, 2008 of two wind power projects with a combined capacity of 272 MW in Quebec confirm the strategic choices and the leadership of Boralex."

Revenue from energy sales in the wind power segment grew 38.8% to $6.8 million for the second quarter of 2008. Growth in this segment stems mainly from a 22.2% increase in power generation. Similarly, quarterly EBITDA rose 30.8% to $5.1 million. This growth is due to the contribution from La Citadelle wind farm, the expansion of the Avignonet-Lauragais site and enhanced productivity at existing farms.

The hydroelectric segment recorded revenue of $3.2 million and EBITDA of $2.4 million in the second quarter of 2008, for respective increases of $0.3 million and $0.2 million quarter over quarter.

In the second quarter of 2008 the wood-residue segment posted revenue of $27.8 million, up $5.0 million over the same quarter in 2007. The revenue increase derives from the sale of RECs and the higher average electricity selling price on the open market in the Northeastern United States. The same circumstances explain the major 151.9% increase in EBITDA in the wood-residue segment, which rose to $6.8 million in the second quarter of 2008 versus $2.7 million for the same period in 2007. Note that as at June 30, 2008, Boralex held firm commitments worth US$45 million for REC sales between July 1, 2008 and December 31, 2012 in the Connecticut market. Furthermore, on June 27, 2008, Boralex restarted its Stacyville power station to take advantage of the high electricity prices in the United States and optimize marketing of the RECs produced by the Ashland power station.

About Boralex

Boralex is a major private electricity producer whose core business is the development and operation of power stations that run on renewable energy. Employing close to 300 people, the Corporation owns and operates 21 power stations with a combined installed capacity MW of 351 MW in Quebec, the northeastern United States and France. The Corporation also has 240 MW of contracted capacity for future production sites. Boralex is distinguished by its leading expertise and long experience in three types of power generation - wind, hydroelectric and thermal. The Boralex shares trade on the Toronto stock exchange under the ticker symbol BLX. http://www.boralex.com/

In addition, Boralex holds a 23% interest in Boralex Power Income Fund which owns 10 power stations in Quebec and the United States with an installed capacity of close to 190 MW. Management of the Fund's assets is provided by Boralex.

Certain statements in this release, including statements 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 effect of general economic conditions, decreased demand for Boralex's products, increases in raw material costs, fluctuations in currency exchange rates, fluctuations in sales prices and adverse changes in general market and industry conditions. The summarized financial statements included in this press release also contain certain financial measurements that are not recognized as Generally Accepted Accounting Principles (GAAP).

To assess the operating performance of its assets and reporting segments, the Corporation uses Earnings before interest, taxes, depreciation and amortization (EBITDA) and Cash flows from operations as performance measurements. EBITDA and Cash flows from operations are not defined under GAAP and do not have a standardized meaning prescribed by GAAP. Therefore, these measures may not be comparable to similar measures presented by other enterprises. EBITDA is defined in the summarized financial statements included with this press release. Cash flows from operations corresponds to cash flow from operating activities before changes in non-cash working capital balances as disclosed in the consolidated statements of cash flows attached in this press release.

Consolidated Financial Statements Consolidated Balance Sheets (in thousands of dollars) (unaudited) As at As at March 31, December 31, 2008 2007 ------------------------------------------------------------------------- Assets Current assets Cash and cash equivalents 77,903 79,195 Accounts receivable 40,083 39,200 Future income taxes 1,279 2,394 Inventories 6,944 8,002 Prepaid expenses 2,699 2,171 ------------------------------------------------------------------------- 128,908 130,962 Investment 67,250 67,321 Property, plant and equipment 282,414 258,712 Electricity sales contracts 19,741 18,527 Other assets 60,088 39,209 ------------------------------------------------------------------------- 558,401 514,731 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Liabilities Current liabilities Accounts payable and accrued liabilities 25,268 20,869 Income taxes payable 915 1,481 Current portion of long-term debt 27,142 26,786 ------------------------------------------------------------------------- 53,325 49,136 Long-term debt 156,942 148,747 Future income taxes 24,265 23,430 Fair value of derivative financial instruments 22,694 1,400 Other liabilities 5,804 6,642 Non-controlling interests 737 607 ------------------------------------------------------------------------- 263,767 229,962 Shareholders' equity Capital stock 223,257 221,557 Contributed surplus 2,489 1,974 Retained earnings 126,025 115,669 Accumulated other comprehensive loss (57,137) (54,431) ------------------------------------------------------------------------- 294,634 284,769 ------------------------------------------------------------------------- 558,401 514,731 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Consolidated Statements of Earnings (in thousands of dollars, except per-share amounts and number of shares) (unaudited) For the For the three-month periods six-month periods ended June 30, ended June 30, 2008 2007 2008 2007 ------------------------------------------------------------------------- Revenue from energy sales 40,449 32,353 95,468 83,171 Renewable energy tax credits 2,409 2,644 5,531 6,399 Operating costs 29,310 26,231 63,722 57,329 ------------------------------------------------------------------------- 13,548 8,766 37,277 32,241 Share in earnings of the Fund 1,790 1,181 5,038 4,659 Management revenue from the Fund 1,352 1,375 2,693 2,781 Other revenue 395 39 452 1,542 ------------------------------------------------------------------------- 17,085 11,361 45,460 41,223 ------------------------------------------------------------------------- Other expenses Management and operation of the Fund 1,039 1,153 1,977 2,313 Administration costs 3,399 3,160 6,945 6,225 ------------------------------------------------------------------------- 4,438 4,313 8,922 8,538 ------------------------------------------------------------------------- Operating earnings before amortization 12,647 7,048 36,538 32,685 ------------------------------------------------------------------------- Amortization 6,015 4,528 11,843 10,248 Foreign exchange loss (gain) 56 361 (418) 308 Financial instruments 785 (5,874) 1,104 (5,874) Financing costs 2,991 3,704 6,456 8,514 ------------------------------------------------------------------------- 9,847 2,719 18,985 13,196 ------------------------------------------------------------------------- Earnings before income taxes 2,800 4,329 17,553 19,489 Income tax expense 1,642 (506) 7,080 4,820 ------------------------------------------------------------------------- 1,158 4,835 10,473 14,669 Non-controlling interests (23) 3 (117) (54) ------------------------------------------------------------------------- Net earnings 1,135 4,838 10,356 14,615 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Net earnings per Class A share (basic) (in dollars) 0.03 0.15 0.27 0.47 Net earnings per Class A share (diluted) (in dollars) 0.03 0.15 0.27 0.46 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Weighted average number of Class A shares outstanding (basic) 37,818,503 32,526,623 37,692,735 31,300,863 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Consolidated Statements of Retained Earnings (in thousands of dollars) (unaudited) For the six-month periods ended June 30, 2008 2007 ------------------------------------------------------------------------- Balance - beginning of period 115,669 97,649 Issuance costs, net of related income taxes - (3,407) Net earnings for the period 10,356 14,615 ------------------------------------------------------------------------- Balance - end of period 126,025 108,857 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Consolidated Statements of Comprehensive Income (in thousands of dollars) (unaudited) For the For the three-month periods six-month periods ended June 30, ended June 30, 2008 2007 2008 2007 ------------------------------------------------------------------------- Net earnings for the period 1,135 4,838 10,356 14,615 Other comprehensive income (loss): Translation adjustments Unrealized foreign exchange gains (losses) on translation of financial statements of self-sustaining foreign operations (1,682) (13,131) 7,409 (14,677) Share of cumulative translation adjustments of the Fund (422) (2,438) 169 (2,087) Taxes 74 877 (4) 773 Cash flow hedges Change in fair value of financial instruments (15,874) 4,158 (16,337) 2,791 Realized losses on hedging items recognized in net earnings 1,340 (413) 1,219 (1,124) Termination of hedging relationship - (5,874) - (5,874) Taxes 4,651 681 4,838 1,346 ------------------------------------------------------------------------- (11,913) (16,140) (2,706) (18,852) ------------------------------------------------------------------------- Comprehensive income (loss) for the period (10,778) (11,302) 7,650 (4,237) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Consolidated Statements of Cash Flows (in thousands of dollars) (unaudited) For the For the three-month periods six-month periods ended June 30, ended June 30, 2008 2007 2008 2007 ------------------------------------------------------------------------- Operating activities Net earnings 1,135 4,838 10,356 14,615 Distributions received from the Fund 2,409 3,098 5,507 6,196 Adjustments for non-cash items Share in earnings of the Fund (1,790) (1,181) (5,038) (4,659) Amortization 6,015 4,528 11,843 10,248 Amortization of deferred financing costs 724 509 1,432 1,419 Renewable energy tax credits (395) (953) (1,488) (2,283) Future income taxes 530 939 5,966 5,957 Financial instruments 785 (5,874) 1,104 (5,874) Other 4 784 483 1,161 ------------------------------------------------------------------------- 9,417 6,688 30,165 26,780 Change in non-cash working capital balances 9,140 3,406 3,926 (3,789) ------------------------------------------------------------------------- 18,557 10,094 34,091 22,991 ------------------------------------------------------------------------- Investing activities Purchase of property, plant and equipment (9,231) (11,693) (13,558) (12,192) Change in debt servicing reserves (25) 6,236 (54) 6,215 Development projects (1,481) (187) (15,708) (269) Other (1,222) (1,909) (1,700) (2,948) ------------------------------------------------------------------------- (11,959) (7,553) (31,020) (9,194) ------------------------------------------------------------------------- Financing activities Increase in long-term debt - 148,908 - 151,437 Payments on long-term debt (1,194) (193,219) (10,194) (195,559) Financing costs (151) (1,861) (151) (1,866) Net proceeds from share issuance 238 105,180 1,704 105,307 Other 4 (240) 4 (494) ------------------------------------------------------------------------- (1,103) 58,768 (8,637) 58,825 ------------------------------------------------------------------------- Translation adjustment on cash and cash equivalents 1,913 (1,932) 4,274 (2,028) ------------------------------------------------------------------------- Net change in cash and cash equivalents 7,408 59,377 (1,292) 70,594 Cash and cash equivalents - beginning of period 70,495 25,116 79,195 13,899 ------------------------------------------------------------------------- Cash and cash equivalents - end of period 77,903 84,493 77,903 84,493 ------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- SUPPLEMENTAL INFORMATION Cash and cash equivalents paid for: Interests 2,418 2,694 4,860 6,003 Income taxes 645 385 948 1,026 ------------------------------------------------------------------------- Segmented Information (tabular amounts in thousands of dollars, unless otherwise specified) (unaudited)

The Corporation's power stations are grouped under four distinct segments: wind power, hydroelectric power, wood-residue thermal power and natural gas thermal power, and are engaged mainly in power generation. The classification of these segments is based on the different cost structures relating to each type of power station.

The Corporation analyzes the performance of its operating segments based on their EBITDA, which is defined as earnings before interest, taxes, depreciation and amortization. EBITDA is not a measure of performance under Canadian generally accepted accounting principles; however, management uses this performance measure to assess the operating performance of its segments. Earnings for each segment are presented on the same basis as those of the Corporation.

The following table reconciles EBITDA with net earnings: For the For the three-month periods six-month periods ended June 30, ended June 30, 2008 2007 2008 2007 ------------------------------------------------------------------------- Net earnings 1,135 4,838 10,356 14,615 Non-controlling interests 23 (3) 117 54 Income tax expense 1,642 (506) 7,080 4,820 Financing costs 2,991 3,704 6,456 8,514 Financial instruments 785 (5,874) 1,104 (5,874) Foreign exchange loss (gain) 56 361 (418) 308 Amortization 6,015 4,528 11,843 10,248 ------------------------------------------------------------------------- EBITDA 12,647 7,048 36,538 32,685 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Information by operating segment For the For the three-month periods six-month periods ended June 30, ended June 30, 2008 2007 2008 2007 ------------------------------------------------------------------------- PRODUCTION (in MWh) Wind power stations 47,331 38,729 123,153 100,705 Hydroelectric power stations 32,322 32,589 75,702 66,170 Wood-residue thermal power stations 255,226 255,503 583,134 596,883 Natural gas thermal power station 76 28 22,569 22,202 ------------------------------------------------------------------------- 334,955 326,849 804,558 785,960 ------------------------------------------------------------------------- ------------------------------------------------------------------------- REVENUE FROM ENERGY SALES Wind power stations 6,763 4,930 16,932 13,215 Hydroelectric power stations 3,200 2,859 6,989 5,938 Wood-residue thermal power stations 27,811 22,839 62,147 56,199 Natural gas thermal power station 2,675 1,725 9,398 7,819 Corporate and eliminations - - 2 - ------------------------------------------------------------------------- 40,449 32,353 95,468 83,171 ------------------------------------------------------------------------- ------------------------------------------------------------------------- EBITDA Wind power stations 5,115 3,863 13,619 10,922 Hydroelectric power stations 2,391 2,191 5,425 4,273 Wood-residue thermal power stations 6,795 2,741 17,866 14,926 Natural gas thermal power station (204) (321) 1,117 1,780 Corporate and eliminations (1,450) (1,426) (1,489) 784 ------------------------------------------------------------------------- 12,647 7,048 36,538 32,685 ------------------------------------------------------------------------- ------------------------------------------------------------------------- PURCHASE OF PROPERTY, PLANT AND EQUIPMENT Wind power stations 2,710 10,331 5,396 10,528 Hydroelectric power stations 2 11 8 129 Wood-residue thermal power stations 5,726 1,281 6,926 1,326 Natural gas thermal power station 16 - 16 2 Corporate and eliminations 777 70 1,212 207 ------------------------------------------------------------------------- 9,231 11,693 13,558 12,192 ------------------------------------------------------------------------- ------------------------------------------------------------------------- As at As at June 30, December 31, 2008 2007 ------------------------------------------------------------------------- ASSETS Wind power stations 214,977 196,814 Hydroelectric power stations 17,644 12,427 Wood-residue thermal power stations 137,882 130,728 Natural gas thermal power station 15,213 16,132 Corporate and eliminations 172,685 158,630 ------------------------------------------------------------------------- 558,401 514,731 ------------------------------------------------------------------------- -------------------------------------------------------------------------

BORALEX INC.

CONTACT: Ms. Patricia Lemaire, Director, Public Affairs andCommunications, Boralex Inc., (514) 985-1353, patricia.lemaire@boralex.com

Source: PRNewswire-FirstCall

More News in this Category