Growth in operating income and addition of 137 MW of projects in the 4th quarter of 2021

Highlights

  • Increases in consolidated operating income and EBITDA(A)1in fourth quarter and fiscal year 2021
    • Operating income of $74 million ($82 million)2 for Q4-2021, up 23% (8%) from $60 million ($76 million) in 2020
    • EBITDA(A) of $152 million ($163 million) for Q4-2021, up 10% (5%) from $137 million ($155 million) in 2020
    • Operating income of $182 million ($219 million) for 2021, up 7% (down 3%) from $172 million ($225 million) in 2020
    • EBITDA(A) of $490 million ($535 million) for 2021, up 13 % (4 %) from $434 million ($513 million) in 2020
  • Continuous growth in the project pipeline
    • Projects totalling 137 MW added to the “Early-stage” phase of the project pipeline
    • Three projects totalling 41 MW moved to the “Projects under construction or ready-to-build” phase of the Growth Path
  • One wind farm and two solar farms commissioned in France with a total installed capacity of 30 MW
    • Boralex’s first floating solar farm commissioned, consisting of over 43,000 photovoltaic panels deployed in a 12- hectare island on the water body of an old gravel pit in the midst of a comprehensive redevelopment project.
  • Production 2% higher (6% lower) than in Q4-2020 and 12% (12%) below anticipated production3
    • Wind: 5% (12%) lower than in Q4-2020 and 14% (13%) below anticipated production
    • Hydroelectric: 20% higher than in Q4-2020 and 8% above anticipated production
    • Solar: 11% below anticipated production
  • Increase in cash flows from operations4and decreases in discretionary cash flows4
    • Cash flow from operations of $116 million ($124 million) for Q4-2021, up $15 million ($6 million) from Q4-2020
    • Net cash flow related to operating activities of $81 million ($91 million) for Q4-2021, up $22 million ($13 million) from Q4-2020
    • Discretionary cash flow of $58 million, down $9 million from Q4-2020

MONTREAL, Feb. 23, 2022 (GLOBE NEWSWIRE) — Boralex Inc. (“Boralex” or the “Company”) (TSX: BLX) is pleased to report an increase in operating income and continued progress on certain development projects during the quarter ended December 31, 2021.

“The integration of acquisitions, the commissioning of new wind and solar farms and the rise in electricity market prices favourable to certain wind projects in France enabled us to keep growing our operating income in the fourth quarter,” said Patrick Decostre, President and Chief Executive Officer of Boralex.

“We added 137 MW of solar and wind projects in the Preliminary phase of our project pipeline during the quarter, for a total addition of 973 MW in 2021, in addition to 193 MW of energy storage projects added during the year. These additions underscore the quality of our development teams, which have been strengthened over the course of the year following significant investments in North America and Europe. We now have 3,890 MW of projects under development or under construction and are in an excellent position to take full advantage of the growing development opportunities in our target markets,” added Mr. Decostre.

_________________________________
1 EBITDA(A) is a total of sector measures. For more details, see the Non-IFRS financial measures and other financial measures section of this press release.
2 The figures in brackets indicated the results according to the Combined4, compared to those obtained according to the Consolidated.
3 Anticipated Production is an additional financial measure. For more details, see the Non-IFRS financial measures and other financial measures section of this press release.
4 Combined, Cash Flow from operations and Discretionary Cash Flows are non-GAAP financial measures and do not have a standardized definition under IFRS. Therefore, these measures may not be comparable to similar measures used by other companies. For more details, see the Non-IFRS financial measures and other financial measures section of this press release.

4th quarter highlights

Three-month periods ended December 31

  Consolidated   Combined 1

(in millions of Canadian dollars, unless otherwise specified)

  2021
  2020   Change   2021   2020 Change
          $   %             $   %  
Power production (GWh)2   1,492   1,468   24   2     1,661   1,763   (102 ) (6 )
Revenues from energy sales and
feed-in premium
  192   193   (1 ) (1 )   211   225   (14 ) (6 )
Operating Income   74   60   14   23     82   76   6   8  
EBITDA(A)3   152   137   15   10     163   155   8   5  
Net earnings   20   30   (10 ) (32 )   20   36   (16 ) (43 )
Net earnings attributable to
shareholders of Boralex
  17   25   (8 ) (28 )   17   31   (14 ) (42 )
Per share – basic and diluted   $0.17   $0.24   ($0.07 ) (30 )   $0.17   $0.30   ($0.13 ) (44 )
                                     
Net cash flows related to operating
activities
  81   59   22   36     91   78   13   15  
Cash flows from operations1   116   101   15   15            
Discretionary cash flows1   58   67   (9 ) (14 )          

In the fourth quarter of 2021, Boralex produced 1,492 GWh (1,661 GWh) of power, up 2% (down 6%) more than the 1,468 GWh (1,763 GWh) produced in the same quarter of 2020. For the three-month period ended December 31, 2021, revenues from energy sales and feed-in premiums were $192 million ($211 million), down 1% (6)% from Q4-2020, while EBITDA(A) reached $152 million ($163 million), up 10% (5%) from Q4-2020, and operating income was $74 million ($82 million), up 23% (8%) from the same quarter in 2020. The increase in production, revenues, EBITDA(A) and operating income is attributable to recent acquisitions in the wind sector in Quebec and the solar sector in the United States, the commissioning of French wind farms and the increase in hydroelectric generation in the United States resulting from particularly favourable conditions during the quarter. During the fourth quarter of 2021, the Corporation also benefited from higher energy sales revenue for sites benefiting from the feed-in premium /due to high market prices in France. Given the structure of the feed-in premium contracts for operating farms, the Corporation is not required to reimburse the difference between the market price and reference price for the feed-in premium when the accumulation of the sums paid by the Corporation becomes equal to the accumulation of the sums received as a feed- in premium.

For the three months ended December 31, 2021, Boralex posted net earnings of $20 million ($20 million) compared to net earnings of $30 million ($36 million) for the corresponding period in 2020. The net earnings attributable to Boralex shareholders were $17 million ($17 million) or $0.17 per share (basic and diluted), compared to $25 million ($31 million) or $0.24 ($0.30) per share (diluted) for the corresponding period in 2020. The decrease in net earnings is attributable to the increase in amortization expense and income tax expense, which was partially offset by the increase in EBITDA(A), as well as the decrease in depreciation and acquisition expenses.

1 Combined, Cash Flow from operations and Discretionary Cash Flows are non-GAAP financial measures and do not have a standardized definition under IFRS. Therefore, these measures may not be comparable to similar measures used by other companies. For more details, see the Non-IFRS financial measures and other financial measures section of this press release.
2 Power production includes the production for which Boralex received financial compensation following power generation limitations imposed by its clients since management uses this measure to evaluate the Corporation’s performance. This adjustment facilitates the correlation between power production and revenues from energy sales and feed-in premium.
3 EBITDA(A) is a total of sector measures. For more details, see the Non-IFRS financial measures and other financial measures section of this press release.

Fiscal year ended December 31

  Consolidated   Combined1

(in millions of Canadian dollars, unless otherwise specified)

  2021   2020   Change   2021   2020   Change
          $   %             $   %  
Power production (GWh)2   5,552   4,727   825   17     6,215   5,834   381   7  
Revenues from energy sales and
feed-in premium
  671   619   52   8     743   738   5   1  
Operating Income   182   172   10   7     219   225   (6 ) (3 )
EBITDA(A)3   490   434   56   13     535   513   22   4  
Net earnings   26   61   (35 ) (57 )   30   56   (26 ) (45 )
Net earnings attributable to
shareholders of Boralex
  17   55   (38 ) (69 )   21   50   (29 ) (57 )
Per share – basic and diluted   $0.16   $0.55   ($0.39 ) (71 )   $0.21   $0.51   ($0.30 ) (59 )
Net cash flows related to operating activities   345   362   (17 ) (5 )   364   399   (35 ) (8 )
Cash flows from operations1   363   338   25   7            
Discretionary cash flows1   132   146   (14 ) (10 )          
                         
    As at
Dec. 31
  As at
Dec. 31
  Change   As at
Dec. 31
  As at
Dec. 31
  Change
          $   %             $   %  
Total assets   5,751   5,314   437   8     6,162   5,753   409   7  
Debt – principal balance   3,682   3,609   73   2     4,030   3,976   54   1  
Total project debt   3,141   3,190   (49 ) (2 )   3,489   3,557   (68 ) (2 )
Total corporate debt   541   419   122   29     541   419   122   29  

For the year ended December 31, 2021, Boralex produced 5,552 GWh (6,215 GWh) of power, 17% (7%) more than the 4,727 GWh (5,834 GWh) produced in the same period of fiscal 2020. Revenues from energy sales for the period amounted to $671 million ($743 million), up $52 million ($5 million) or 8% (1%) from the same period in 2020, while EBITDA(A) was $490 million ($535 million), $56 million ($22 million) or 13% (4%) higher than last year. The increases in production, revenues from energy sales and EBITDA(A) are attributable to acquisitions and commissionings, as discussed in the analysis of the quarterly results. Operating income totaled $182 million ($219 million), up $10 million (down $6 million) over the same period in 2020 due to an increase in revenues from energy sales and feed-in premium, and a decrease in operating and administration expenses that were partially offset by an increase in amortization expense.

Overall, for the fiscal year ended December 31, 2021, Boralex posted net earnings of $26 million ($30 million) versus net earnings of $61 million ($56 million) for fiscal year 2020. Net earnings attributable to shareholders of Boralex were $17 million ($21 million) or $0.16 ($0.21) per share (basic and diluted), compared to $5 million ($50 million) or $0.55 ($0.51) per share (basic and diluted) for the same period in fiscal 2020. This decrease is mainly due to an increase in amortization expense and financial expenses, which were partially offset by an increase in EBITDA(A).

1 Combined, Cash Flow from operations and Discretionary Cash Flows are non-GAAP financial measures and do not have a standardized definition under IFRS. Therefore, these measures may not be comparable to similar measures used by other companies. For more details, see the Non-IFRS financial measures and other financial measures section of this press release.
2 Power production includes the production for which Boralex received financial compensation following power generation limitations imposed by its clients since management uses this measure to evaluate the Corporation’s performance. This adjustment facilitates the correlation between power production and revenues from energy sales and feed-in premium.
3 EBITDA(A) is a total of sector measures. For more details, see the Non-IFRS financial measures and other financial measures section of this press release.

Outlook

On June 17, 2021, Boralex’s management unveiled an updated strategic plan that will guide efforts to achieve its new corporate targets for 2025. Boralex’s 2025 Strategic Plan is built around the four strategic directions of the plan launched in 2019—growth, diversification, customers and optimization—and six corporate targets. It also incorporates Boralex’s CSR strategy.

Highlights of the main achievements of the quarter in relation to the 2025 Strategic Plan can be found in the 2021 Annual Report available in the Investors section of Boralex’s website.

In the coming quarters, Boralex will continue to work on its various initiatives under this plan, including project development and acquisition target analysis.

To pursue its organic growth, the Corporation has a pipeline of projects at various stages of development defined on the basis of clearly identified criteria, totalling 3,243 MW in wind and solar projects and 190 MW in energy storage projects, as well as a 647 MW Growth Path in wind and solar projects and 3 MW in storage projects.

About Boralex

At Boralex, we have been providing affordable renewable energy accessible to everyone for over 30 years. As a leader in the Canadian market and France’s largest independent producer of onshore wind power, we also have facilities in the United States and development projects in the United Kingdom. Over the past five years, our installed capacity has more than doubled to 2.5 GW. We are developing a portfolio of more than 3 GW in wind and solar projects and nearly 200 MW in storage projects, guided by our values and our corporate social responsibility (CSR) approach. Through profitable and sustainable growth, Boralex is actively participating in the fight against global warming. Thanks to our fearlessness, our discipline, our expertise and our diversity, we continue to be an industry leader. Boralex’s shares are listed on the Toronto Stock Exchange under the ticker symbol BLX.

For more information, go to www.boralex.com or www.sedar.com. Follow us on Facebook, LinkedIn and Twitter.

Non-IFRS measures

Performance measures

In order to assess the performance of its assets and reporting segments, Boralex uses performance measures. Management believes that these measures are widely accepted financial indicators used by investors to assess the operational performance of a company and its ability to generate cash through operations. The non-IFRS and other financial measures also provide investors with insight into the Corporation’s decision making as the Corporation uses these non-IFRS financial measures to make financial, strategic and operating decisions. The non-IFRS and other financial measures should not be considered as a substitute for IFRS measures.

These non-IFRS financial measures are derived primarily from the audited consolidated financial statements, but do not have a standardized meaning under IFRS; accordingly, they may not be comparable to similarly named measures used by other companies. Non-IFRS and other financial measures are not audited. They have important limitations as analytical tools and investors are cautioned not to consider them in isolation or place undue reliance on ratios or percentages calculated using these non-IFRS financial measures.

Non-IFRS financial measures
Specific financial
measure
Use Composition Most directly comparable IFRS measure
Financial data – Combined (all disclosed financial data) To assess the operating performance and the ability of a company to generate cash from its operations.

The Interests represent significant investments by Boralex.

Results from the combination of the financial information of Boralex Inc. under IFRS and the share of the financial information of the Interests.

Interests in the Joint Ventures and associates, Share in earnings (losses) of the Joint Ventures and associates and Distributions received from the Joint Ventures and associates are then replaced with Boralex’s respective share (ranging from 50% to 59.96%) in the financial statements of the Interests (revenues, expenses, assets, liabilities, etc.)

Respective financial data – Consolidated
Cash flows from operations To assess the cash generated by the Company’s operations and its ability to finance its expansion from these funds. Net cash flows related to operating activities before changes in non-cash items related to operating activities. Net cash flows related to operating activities
Discretionary cash flows To assess the cash generated from operations and the amount available for future development or to be paid as dividends to common shareholders while preserving the long- term value of the business.

Corporate objectives for 2025 from the strategic plan.

Net cash flows related to operating activities before “change in non-cash items related to operating activities,” less
(i) distributions paid to non-controlling shareholders, (ii) additions to property, plant and equipment (maintenance of operations), (iii) repayments on non-current debt (projects) and repayments to tax equity investors; (iv) principal payments related to lease liabilities; (v) adjustments for
non-operational items; plus (vi) development costs (from the statement of earnings).
Net cash flows related to operating activities
Other financial measures Total of segments measure
Specific financial measure Most directly comparable IFRS measure
EBITDA(A) Operating income
Supplementary Financial Measures Other financial measures
Specific financial measure Composition
Anticipated production Production that the Company anticipates for the oldest sites based on adjusted historical averages, commissioning and planned shutdowns and, for other sites, based on the production studies carried out.


Combined

The following tables reconcile Consolidated financial data with data presented on a Combined basis:

      2021      2020 
(in millions of Canadian dollars) Consolidated  Reconciliation(1) Combined  Consolidated  Reconciliation(1) Combined 
Three-month period ended December 31:            
Power production (GWh)(2) 1,492  169 1,661  1,468  295 1,763 
Revenues from energy sales and feed-in
premium
192  19 211  193  32 225 
Operating Income 74  8 82  60  16 76 
EBITDA(A) 152  11 163  137  18 155 
Net earnings 20  20  30  6 36 
Net cash flows related to operating activities 81  10 91  59  19 78 
Year ended December 31:            
Power production (GWh)(2) 5,552  663 6,215  4,727  1,107 5,834 
Revenues from energy sales and feed-in
premium
671  72 743  619  119 738 
Operating Income 182  37 219  172  53 225 
EBITDA(A) 490  45 535  434  79 513 
Net earnings 26  4 30  61  (5) 56 
Net cash flows related to operating activities 345  19 364  362  37 399 
As at December 31:            
Total assets 5,751  411 6,162  5,314  439 5,753 
Debt – Principal balance 3,682  348 4,030  3,609  367 3,976 

(1) Includes the respective contribution of Joint Ventures and associates as a percentage of Boralex’s interest less adjustments to reverse recognition of these interests under IFRS.
(2) Includes financial compensation following electricity production limitations imposed by clients.

EBITDA(A)
EBITDA(A) is a total of segments financial measure and represents earnings before interest, taxes, depreciation and amortization, adjusted to exclude other items such as acquisition costs, other gains, net loss (gain) on financial instruments and foreign exchange loss (gain), the last two items being included under Other.

Management uses EBITDA(A) to assess the performance of the Corporation’s reporting segments.

EBITDA(A) is reconciled to the most comparable IFRS measure, namely, operating income, in the following table:

(in millions of Canadian dollars)                  2021           2020   Variation
2021 vs 2020
Consolidated   Reconciliation(1)   Combined   Consolidated   Reconciliation(1)   Combined    Consolidated   Combined  
Three-month period ended December 31:      
Operating income 74   8   82   60   16   76   14   6  
Amortization 75   6   81   62   11   73   13   8  
Impairment 2     2   6     6   (4 ) (4 )
Share in earnings of Joint Ventures                    
and Associates (4 ) 4     1   (1 )   (5 )  
Excess of the interest over the net                    
assets of Joint Venture SDB I       8   (8 )   (8 )  
Change in fair value of a derivative                    
included in the share of the Joint                    
Ventures 6   (6 )         6    
Other gains (1 ) (1 ) (2 )   (1 ) (1 ) (1 ) (1 )
EBITDA(A) 152   11   163   137   17   154   15   9  
   
Year ended December 31:      
Operating income 182   37   219   172   53   225   10   (6 )
Amortization 297   23   320   237   47   284   60   36  
Impairment 4     4   7     7   (3 ) (3 )
Share in earnings of Joint Ventures                    
and Associates 9   (9 )   25   (25 )   (16 )  
Excess of the interest over the net                    
assets of Joint Venture SDB I 6   (6 )   (6 ) 6     12    
Change in fair value of a derivative                    
included in the share of the Joint                    
Ventures (2 ) 2           (2 )  
Other gains (6 ) (2 ) (8 ) (1 ) (2 ) (3 ) (5 ) (5 )
EBITDA(A) 490   45   535   434   79   513   56   22  

(1)Includes the respective contribution of Joint Ventures and associates as a percentage of Boralex’s interest less adjustments to reverse recognition of these interests under IFRS.

Cash flow from operations and discretionary cash flows

The Corporation computes the cash flow from operations and discretionary cash flows as follows:

      Consolidated
  Three-month periods ended Years ended  
(in millions of Canadian dollars) December 31,
2021
  December 31,
2020
  December 31,
2021
  December 31,
2020
 
Net cash flows related to operating activities 81   59   345   362  
Changes in non‑cash operating items 35   42   18   (24 )
Cash flows from operations 116   101   363   338  
Repayments on non-current debt (projects)(1) (50 ) (40 ) (222 ) (175 )
Adjustment for non-operating items(2)(3)   7   8   (17 )
  66   68   149   146  
Principal payments related to lease liabilities (4 ) (4 ) (13 ) (11 )
                 
Distributions paid to non-controlling shareholders (7 ) (1 ) (20 ) (6 )
Additions to property, plant and equipment (maintenance of operations) (3 ) (3 ) (8 ) (6 )
                 
Development costs (from statement of earnings) 6   7   24   23  
Discretionary cash flows 58   67   132   146  

(1) Excluding VAT bridge financing, early debt repayments and the debt repayments made in December for LP I, DM I and II in respect of the months prior to the acquisition (Q4-2020).
(2) For the year ended December 31, 2021: favourable adjustment of $8 million consisting mainly of $5 million of expense payments and assumed liabilities related to acquisitions as well as $3 million for previous financing activities or not related to operating sites. For the year ended December 31, 2020: unfavourable adjustment of $17 million comprising mainly of interest paid of $3 million on LP I, DM I and II debt for the months prior to the acquisition in Q4-2020, less $22 million in debt repayments to reflect a normalized debt service following debt refinancing in France in Q1-2020.

Disclaimer regarding forward-looking statements
Certain statements contained in this release, including those related to results and performance for future periods, installed capacity targets, EBITDA(A) and discretionary cash flows, the Company’s strategic plan, business model and growth strategy, organic growth and growth through mergers and acquisitions, obtaining an investment grade credit rating by 2025, maintaining a quarterly dividend of $0.1650 per share, the Company’s financial targets and portfolio of renewable energy projects, the Company’s Growth Path and its Corporate Social Responsibility (CSR) objectives are forward-looking statements based on current forecasts, as defined by securities legislation. Positive or negative verbs such as “will,” “would,” “forecast,” “anticipate,” “expect,” “plan,” “project,” “continue,” “intend,” “assess,” “estimate” or “believe,” or expressions such as “toward,” “about,” “approximately,” “to be of the opinion,” “potential” or similar words or the negative thereof or other comparable terminology, are used to identify such statements.

Forward-looking statements are based on major assumptions, including those about the Company’s return on its projects, as projected by management with respect to wind and other factors, opportunities that may be available in the various sectors targeted for growth or diversification, assumptions made about EBITDA(A) margins, assumptions made about the sector realities and general economic conditions, competition, exchange rates as well as the availability of funding and partners. While the Company considers these factors and assumptions to be reasonable, based on the information currently available to the Company, they may prove to be inaccurate.

Boralex wishes to clarify that, by their very nature, forward-looking statements involve risks and uncertainties, and that its results, or the measures it adopts, could be significantly different from those indicated or underlying those statements, or could affect the degree to which a given forward-looking statement is achieved. The main factors that may result in any significant discrepancy between the Company’s actual results and the forward-looking financial information or expectations expressed in forward-looking statements include the general impact of economic conditions, fluctuations in various currencies, fluctuations in energy prices, the Company’s financing capacity, competition, changes in general market conditions, industry regulations, litigation and other regulatory issues related to projects in operation or under development, as well as other factors listed in the Company’s filings with the various securities commissions.

Unless otherwise specified by the Company, forward-looking statements do not take into account the effect that transactions, non-recurring items or other exceptional items announced or occurring after such statements have been made may have on the Company’s activities. There is no guarantee that the results, performance or accomplishments, as expressed or implied in the forward-looking statements, will materialize. Readers are therefore urged not to rely unduly on these forward-looking statements.

Unless required by applicable securities legislation, Boralex’s management assumes no obligation to update or revise forward-looking statements in light of new information, future events or other changes.

Percentage figures are calculated in thousands of dollars.

For more information:

Source: Boralex Inc.


(GlobeNewsWire)