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Boralex Reports an Exceptional Third Quarter 2008

November 12, 2008

MONTREAL, Nov. 12 /PRNewswire-FirstCall/ — In the third quarter of 2008, Boralex Inc. (“Boralex” or the “Corporation”) recorded a strong increase in all operating revenue, largely due to a bigger contribution from the wood residue segment and favourable hydrology.

   (in millions of dollars, except per share data)   -------------------------------------------------------------------------                                Three months ended       Nine months ended                              ----------------------------------------------                              September   September   September   September                               30, 2008    30, 2007    30, 2008    30, 2007                              ----------------------------------------------   Revenue from    energy sales                 48.8        34.3       142.9       117.4   EBITDA                        16.8         9.9        53.3        42.6   Net earnings                   5.7         1.0        16.0        15.6   Basic net earnings    per share                   $0.15       $0.03       $0.42       $0.47   Cash flows from operations    13.9         8.8        44.1        35.5   -------------------------------------------------------------------------   

For the three months ended September 30, 2008, revenue from energy sales totalled $48.8 million, up 42.3% over the same period in 2007. Earnings before interest, taxes, depreciation and amortization (EBITDA) rose to $16.8 million in the third quarter compared to $9.9 million for the same quarter a year earlier. Boralex’s revenues were all positively affected by higher REC sales, higher production volume in the wood residue and hydroelectric segments and higher energy selling prices. The Corporation closed the third quarter of 2008 with net earnings of $5.7 million ($0.15 per share), compared to $1.0 million ($0.03 per share) in 2007. The strong operating results have translated into cash assets. Cash flows from operations rose 58% to $13.9 million in the third quarter of 2008 compared to $8.8 million a year earlier. This clearly demonstrates the quality of the Corporation’s assets and its solid financial position.

Patrick Lemaire, President and Chief Executive Officer, is pleased with this growth: “The diverse nature of Boralex’s assets and its aggressive position in the wood-residue market, particularly with respect to RECs, proves once again that we have made the right strategic decisions which have led to these strong results.”

In the wind power segment, wind conditions were less favourable in the third quarter of 2008. However, lower power generation was partly offset by the start-up of new wind farms, the rise in the euro, the sale of green certificates and price indexing. This segment thus recorded revenue of $5.9 million, slightly down from $6.0 million in 2007. EBITDA amounted to $4.4 million for the three months ended September 30, down $0.5 million compared to the same period in 2007.

The hydroelectric segment posted revenue of $1.9 million in the third quarter of 2008, close to three times the amount reported in the same quarter of 2007. With substantially better hydrology compared to 2007, production volume rose by 147.2% and EBITDA by $1.3 million, to $0.8 million in the third quarter of 2008.

Strengthened by increased participation in the Connecticut REC market, to which three of its wood-residue power stations now contribute, versus just one in 2007, the wood-residue segment recorded revenue of $37.9 million in the third quarter of 2008, up 47.5% over the same period in 2007. This segment’s good performance also stems from higher production volume, mainly because the Stacyville power station is now operating again. EBITDA rose to $13.6 million in the third quarter of 2008 versus $7.5 million in 2007. Moreover, the natural gas cogeneration power station reported revenue of $3.2 million in the third quarter of 2008, up $1.3 million compared to the same period in 2007, with a negative EBITDA of $0.2 million, similar to that of a year earlier.

Mr. Lemaire stressed that: “Boralex is naturally concerned about the world economic slowdown, but we believe that the current financial crisis may also have some advantages and could lead to business opportunities for Boralex, which has always distinguished itself as an operator. The cash balance at the end of the third quarter amounted nearly $60 million, and thus reflects the capacity of Boralex to pursue its development.”

Also, in early October, the Corporation started building four sites (10 MW each) in Ontario. These sites, fitted with Enercon turbines, should start generating power by the end of the second quarter of 2009. On October 28, 2008, in response to the Ontario RES III Request for Proposals, Boralex submitted the Merlin-Buxton wind power project with an installed capacity of 90 MW, slated for start-up in 2012. The results of the RFP should be released in the first quarter of 2009.

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 228 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.

Notice to shareholders

These interim financial statements as at September 30, 2008 and 2007 have not been reviewed by our auditors PricewaterhouseCoopers LLP. These financial statements are the responsibility of the management of Boralex Inc. They have been reviewed and approved by its Board of Directors, as recommended by its Audit Committee.

The following financial informations were extracted from the interim consolidated financial statements of Boralex Inc.The complete interim financial statements were prepared conformingly with the Canadian generally accepted accounting principles (GAAP). They are available on the Boralex’s website (http://www.boralex.com/) and filed with SEDAR.

   Consolidated Balance Sheets                                                       AS AT         AS AT                                               SEPTEMBER 30,  DECEMBER 31,   (in thousands of dollars) (unaudited)               2008          2007   -------------------------------------------------------------------------   -------------------------------------------------------------------------   ASSETS   CURRENT ASSETS   Cash and cash equivalents                         58,711        79,195   Accounts receivable                               42,658        39,200   Future income taxes                                  850         2,394   Inventories                                        8,491         8,002   Prepaid expenses                                   2,852         2,171   -------------------------------------------------------------------------                                                    113,562       130,962    Investment                                        66,722        67,321   Property, plant and equipment                    287,149       258,712   Power sales contracts                             23,917        18,527   Other assets                                      56,928        39,209   -------------------------------------------------------------------------                                                    548,278       514,731   -------------------------------------------------------------------------   -------------------------------------------------------------------------    LIABILITIES   CURRENT LIABILITIES   Bank loans and advances                              448             -   Accounts payable and accrued liabilities          18,952        20,869   Income taxes                                       1,215         1,481   Current portion of long-term debt                 25,761        26,786   -------------------------------------------------------------------------                                                     46,376        49,136    Long-term debt                                   139,554       148,747   Future income taxes                               34,186        23,430   Fair value of derivative financial instruments       256         1,400   Other liabilities                                  5,406         6,642   Non-controlling interests                            729           607   -------------------------------------------------------------------------                                                    226,507       229,962    SHAREHOLDERS' EQUITY   Capital stock                                    223,160       221,557   Contributed surplus                                2,746         1,974   Retained earnings                                131,600       115,669   Accumulated other comprehensive loss             (35,735)      (54,431)   -------------------------------------------------------------------------                                                    321,771       284,769   -------------------------------------------------------------------------                                                    548,278       514,731   -------------------------------------------------------------------------   -------------------------------------------------------------------------     Consolidated Statements of Earnings    (in thousands of dollars,          FOR THE                 FOR THE    except per-share amounts    THREE-MONTH PERIODS     NINE-MONTH PERIODS    and number of shares)       ENDED SEPTEMBER 30,     ENDED SEPTEMBER 30,   (unaudited)                   2008        2007        2008        2007   -------------------------------------------------------------------------   -------------------------------------------------------------------------   Revenues from energy    sales                      48,811      34,276     142,931     117,431   Renewable energy tax    credits                     3,532       3,134       9,063       9,533   Operating costs             34,079      25,463      96,644      82,792   -------------------------------------------------------------------------                               18,264      11,947      55,350      44,172    Share of earnings    of the Fund                 1,180         878       6,218       5,537   Management revenues from    the Fund                    1,349       1,427       4,042       4,208   Other revenues                 514         110       1,159       1,668   -------------------------------------------------------------------------                               21,307      14,362      66,769      55,585   -------------------------------------------------------------------------    OTHER EXPENSES   Management and    operation of the    Fund                        1,073       1,094       3,050       3,407   Administrative    expenses                    3,469       3,344      10,414       9,569   -------------------------------------------------------------------------                                4,542       4,438      13,464      12,976   -------------------------------------------------------------------------    OPERATING INCOME    BEFORE AMORTIZATION        16,765       9,924      53,305      42,609   -------------------------------------------------------------------------    Amortization                 6,377       5,895      18,221      16,143   Foreign exchange loss    (gain)                       (185)        296        (603)        604   Financial instruments       (1,010)       (369)         94      (6,243)   Financing costs              3,515       3,389       9,971      11,903   -------------------------------------------------------------------------                                8,697       9,211      27,683      22,407   -------------------------------------------------------------------------    EARNINGS BEFORE    INCOME TAXES                8,068         713      25,622      20,202    Income tax expense    (recovery)                  2,416        (146)      9,496       4,674   -------------------------------------------------------------------------                                5,652         859      16,126      15,528    Non-controlling    interests                       5         158        (112)        104   -------------------------------------------------------------------------    NET EARNINGS                 5,657       1,017      16,014      15,632   -------------------------------------------------------------------------   -------------------------------------------------------------------------   Net earnings per    Class A share - basic    (in dollars)                 0.15        0.03        0.42        0.47   Net earnings per    Class A share - diluted    (in dollars)                 0.15        0.03        0.42        0.46   -------------------------------------------------------------------------   -------------------------------------------------------------------------   Weighted average    number of Class A    shares outstanding    (basic)                38,247,112  37,454,625  37,739,288  33,374,658   -------------------------------------------------------------------------   -------------------------------------------------------------------------     Consolidated Statements of Retained Earnings                                                   FOR THE NINE-MONTH PERIODS                                                       ENDED SEPTEMBER 30,   (in thousands of dollars) (unaudited)               2008          2007   -------------------------------------------------------------------------   -------------------------------------------------------------------------    Balance - beginning of period                    115,669        97,649   Issuance costs, net of related taxes                   -        (3,407)   Share redemption premium                             (83)            -   Net earnings for the period                       16,014        15,632   -------------------------------------------------------------------------   Balance - end of period                          131,600       109,874   -------------------------------------------------------------------------   -------------------------------------------------------------------------     Consolidated Statements of Comprehensive Income                                       FOR THE                 FOR THE                                THREE-MONTH PERIODS     NINE-MONTH PERIODS   (in thousands of dollars)    ENDED SEPTEMBER 30,     ENDED SEPTEMBER 30,   (unaudited)                   2008        2007        2008        2007   -------------------------------------------------------------------------   -------------------------------------------------------------------------    Net earnings for the period  5,657       1,017      16,014      15,632   -------------------------------------------------------------------------    Other comprehensive income    (loss):     TRANSLATION ADJUSTMENTS       Unrealized translation        gains (losses) on        translation of        financial statements        of self-sustaining        foreign operations      3,066      (9,087)     10,475     (23,912)       Share of cumulative        translation        adjustments of the        Fund                      699        (744)        868      (2,831)       Taxes                     (224)        321        (228)      1,241     CASH FLOW HEDGES       Change in fair value        of financial        instruments            27,421        (847)     11,084       1,944       Hedging instruments        realized and        recognized in net        earnings                  (49)       (580)      1,170      (1,704)       Hedging instruments        realized and        recognized in balance        sheet                  (1,106)          -      (1,106)          -       Termination of hedging        relationships               -           -           -      (5,874)       Taxes                   (8,405)        457      (3,567)      1,804   -------------------------------------------------------------------------                               21,402     (10,480)     18,696     (29,332)   -------------------------------------------------------------------------    Comprehensive income    (loss) for the period      27,059      (9,463)     34,710     (13,700)   -------------------------------------------------------------------------   -------------------------------------------------------------------------     Consolidated Statements of Cash Flows                                       FOR THE                 FOR THE                                THREE-MONTH PERIODS     NINE-MONTH PERIODS   (in thousands of dollars)    ENDED SEPTEMBER 30,     ENDED SEPTEMBER 30,   (unaudited)                   2008        2007        2008        2007   -------------------------------------------------------------------------   -------------------------------------------------------------------------    OPERATING ACTIVITIES   Net earnings                 5,657       1,017      16,014      15,632   Distributions received from    the Fund                    2,410       3,097       7,917       9,293   Adjustments for non-cash    items     Share of earnings of      the Fund                 (1,180)       (878)     (6,218)     (5,537)     Amortization               6,377       5,895      18,221      16,143     Amortization of financing      costs                       712         639       2,144       2,058     Renewable energy tax      credits                  (1,507)     (1,078)     (2,996)     (3,361)     Future income taxes        2,108           1       8,075       5,958     Financial instruments     (1,010)       (369)         94      (6,243)     Other                        320         428         885       1,589   -------------------------------------------------------------------------                               13,887       8,752      44,136      35,532    Change in non-cash working    capital items             (10,820)     (2,707)     (7,396)     (6,496)   -------------------------------------------------------------------------                                3,067       6,045      36,740      29,036   -------------------------------------------------------------------------    INVESTING ACTIVITIES   Business acquisitions       (5,156)          -      (5,781)          -   Additions to property,    plant and equipment        (3,048)     (4,081)    (16,412)    (16,273)   Change in debt servicing    reserves                       26           1         (28)      6,216   Development projects        (7,236)     (2,346)    (22,319)     (2,615)   Other                          372         267      (1,197)     (2,681)   -------------------------------------------------------------------------                              (15,042)     (6,159)    (45,737)    (15,353)   -------------------------------------------------------------------------    FINANCING ACTIVITIES   Net change in bank loans    and advances                  448           -         448           -   Increase in long-term debt       -           -           -     151,437   Payments on long-term debt  (7,462)     (1,427)    (17,657)   (196,986)   Financing costs                  -        (145)          -      (2,011)   Net proceeds from share    issuance                       11           -       1,716     105,307   Share redemption              (194)          -        (194)          -   Other                            3         (97)          5        (591)   -------------------------------------------------------------------------                               (7,194)     (1,669)    (15,682)     57,156   -------------------------------------------------------------------------   TRANSLATION ADJUSTMENTS    ON CASH AND CASH    EQUIVALENTS                   (23)       (826)      4,195      (2,854)   -------------------------------------------------------------------------   NET CHANGE IN CASH AND    CASH EQUIVALENTS          (19,192)     (2,609)    (20,484)     67,985    CASH AND CASH EQUIVALENTS -    BEGINNING OF PERIOD        77,903      84,493      79,195      13,899   -------------------------------------------------------------------------    CASH AND CASH EQUIVALENTS -    END OF PERIOD              58,711      81,884      58,711      81,884   -------------------------------------------------------------------------   -------------------------------------------------------------------------    SUPPLEMENTAL INFORMATION    CASH AND CASH EQUIVALENTS    PAID FOR:     Interest                   2,413       3,113       7,273       9,116     Income taxes                 373         398       1,321       1,006   -------------------------------------------------------------------------    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 cogeneration power-and are engaged mainly in power generation. The classification of these segments is based on the 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 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 to net earnings :                                        FOR THE                 FOR THE                                THREE-MONTH PERIODS     NINE-MONTH PERIODS                                ENDED SEPTEMBER 30,     ENDED SEPTEMBER 30,                                 2008        2007        2008        2007   -------------------------------------------------------------------------   -------------------------------------------------------------------------    Net earnings                 5,657       1,017      16,014      15,632   Non-controlling interests       (5)       (158)        112        (104)   Income tax expense    (recovery)                  2,416        (146)      9,496       4,674   Financing costs              3,515       3,389       9,971      11,903   Financial instruments       (1,010)       (369)         94      (6,243)   Foreign exchange    (gain) loss                  (185)        296        (603)        604   Amortization                 6,377       5,895      18,221      16,143   -------------------------------------------------------------------------    EBITDA                      16,765       9,924      53,305      42,609   -------------------------------------------------------------------------   -------------------------------------------------------------------------     INFORMATION BY OPERATING SEGMENT                                       FOR THE                 FOR THE                                THREE-MONTH PERIODS     NINE-MONTH PERIODS                                ENDED SEPTEMBER 30,     ENDED SEPTEMBER 30,                                 2008        2007        2008        2007   -------------------------------------------------------------------------   -------------------------------------------------------------------------    PRODUCTION (in MWh)   Wind power stations         40,665      47,413     163,818     148,118   Hydroelectric power    stations                   21,522       8,705      97,224      74,875   Wood-residue thermal power    stations                  354,560     318,323     937,694     915,206   Natural gas thermal power    station                         -           -      22,569      22,202   -------------------------------------------------------------------------                               416,747     374,441   1,221,305   1,160,401   -------------------------------------------------------------------------   -------------------------------------------------------------------------    REVENUES FROM ENERGY SALES   Wind power stations          5,859       5,977      22,601      19,176   Hydroelectric power    stations                    1,920         677       8,909       6,615   Wood-residue thermal power    stations                   37,866      25,689      98,856      81,888   Natural gas thermal power    station                     3,165       1,933      12,564       9,752   Corporate and eliminations       1           -           1           -   -------------------------------------------------------------------------                                48,811      34,276     142,931     117,431   -------------------------------------------------------------------------   -------------------------------------------------------------------------    EBITDA   Wind power stations          4,361       4,883      17,982      15,805   Hydroelectric power    stations                      847        (489)      6,272       3,784   Wood-residue thermal power    stations                   13,558       7,452      31,424      22,378   Natural gas thermal power    station                      (157)       (225)        960       1,555   Corporate and eliminations  (1,844)     (1,697)     (3,333)       (913)   -------------------------------------------------------------------------                                16,765       9,924      53,305      42,609   -------------------------------------------------------------------------   -------------------------------------------------------------------------    ADDITIONS TO PROPERTY,    PLANT AND EQUIPMENT   Wind power stations            155       2,330       5,260      12,858   Hydroelectric power stations    48         688          56         817   Wood-residue thermal power    stations                      228       1,014       7,236       2,340   Natural gas thermal power    station                        53           -          69           2   Corporate and eliminations   2,564          49       3,791         256   -------------------------------------------------------------------------                                 3,048       4,081      16,412      16,273   -------------------------------------------------------------------------   -------------------------------------------------------------------------                                                        AS AT         AS AT                                               SEPTEMBER 30, DECEMBER, 31,                                                       2008          2007   -------------------------------------------------------------------------   -------------------------------------------------------------------------    ASSETS   Wind power stations                              209,758       196,814   Hydroelectric power stations                      18,893        12,427   Wood-residue thermal power stations              154,951       130,728   Natural gas thermal power station                 14,469        16,132   Corporate and eliminations                       150,207       158,630   -------------------------------------------------------------------------                                                     548,278       514,731   -------------------------------------------------------------------------   -------------------------------------------------------------------------  

BORALEX INC.

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




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