Boralex posts stronger financial performance in 2011

MONTREAL, Feb. 21, 2012 /CNW Telbec/ - Boralex Inc. ("Boralex" or the "Corporation") ended fiscal 2011 with a sharp rise in earnings before interest, taxes, depreciation and amortization ("EBITDA"), totalling $100.8 million compared with $39.4 million in 2010. This rise resulted primarily from the positive impact of consolidating the operations of Boralex Power Income Fund (the "Fund") and growth in the wind and solar power segments, which contributed $38.2 million and $18.9 million respectively, in additional EBITDA.

"Boralex's savvy strategic development choices in 2011 delivered results once again. We're convinced that our asset performance combined with the recent transactions will underpin growth and profitability for years to come," said Boralex President and CEO Patrick Lemaire.

(in millions of Canadian dollars, except per share amounts and EBITDA margin)
  Three-month periods
ended December 31
  Twelve-month periods
ended December 31
  2011 2010   2011 2010
           
Revenues from energy sales 56.5 53.7   194.0 102.8
EBITDA 30.3 28.1   100.8 39.4
EBITDA margin 53.6% 52.2%   51.9% 38.3%
Net earnings* 8.2 3.1   2.9 35.1
  Per share (basic and diluted) $0.22 $0.08   $0.08 $0.93
Cash flows from operations 17.6 15.7   54.2 14.8
  Per share (basic and diluted) 0.47 0.42   1.44 0.39
*attributable to shareholders of Boralex

During fiscal 2011, revenues from energy sales amounted to $194.0 million, up from $102.8 million in 2010. This marked revenue growth stemmed mainly from assets acquired from the Fund at the end of 2010 being fully consolidated in Boralex's 2011 results and the full-year contribution of new wind farms commissioned in 2010, as well as the commissioning of the solar power station in June 2011.

Boralex recorded net earnings attributable to shareholders of $2.9 million in 2011, which when increased by $4.6 million compared with 2010, excluding a $36.8 million extraordinary gain recorded in 2010 on the acquisition of the Fund.

All three segments—wind, hydroelectric and solar—drove revenue, EBIDTA and EBITDA margin growth for the Corporation in 2011. Boralex generated significantly improved results in its wind power segment in 2011, with revenue and EBITDA rising over 45%. In the hydroelectric segment, revenues and EBITDA were up roughly 115%.

For the three-month period ended December 31, 2011, revenues from energy sales and EBITDA totalled $56.5 million and $30.3 million, respectively, up from $53.7 million and $28.1 million, for the same quarter of 2010. These improvements resulted from the wind power segment's full contribution and the fact that the quarter saw more favourable weather conditions for our French wind farms than in same period of 2010.

In the fourth quarter of 2011, Boralex sold its U.S. wood-residue power stations—with an installed capacity of 186 MW—for a consideration of US$86.8 million. This transaction was in line with the strategic direction adopted by Boralex. The Corporation opted to focus its operations and development initiatives primarily on acquiring and operating renewable energy assets covered by long-term power sales contracts with indexed pricing. These assets now account for 96% of the Corporation's portfolio.

Note that the sale of the Dolbeau thermal power station in the last quarter of 2011 triggered a pre-tax impairment reversal of $5.0 million.

With approximately $160 million in cash resources at the end of 2011, Boralex has sufficient funds to develop the projects identified in its three-year growth strategy.

About Boralex
Boralex is a power producer whose core business dedicated to the development and the operation of renewable energy power stations. Currently, the Corporation operates an asset base with an installed capacity of nearly 500 MW in Canada, the Northeastern United States and France. Boralex is also committed under power development projects, both independently and with European and Canadian partners, to add approximately 400 MW of power. With more than 200 employees, Boralex is known for its diversified expertise and in-depth experience in four power generation types — wind, hydroelectric, thermal and more recently, 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 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 general impact of economic conditions, raw material price increases and availability, currency fluctuations, volatility in electricity selling prices, the Corporation's financing capacity, adverse changes in general market conditions and regulations affecting the industry, as well as other factors listed in the Company's filings with the various 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-GAAP measures. To assess the performance of its assets and reporting segments, the Corporation uses EBITDA, EBITDA margin, cash flows from operations and cash flows from operations per share as performance measures, as defined in the accompanying financial statements. These non-GAAP measures do not have a standardized meaning prescribed under IFRS. As a result, these measures may not be comparable to similarly named measures used by other companies.


Consolidated Statements of Financial Position

  As at
December 31,
As at
December 31,
As at
January 1,
(in thousands of Canadian dollars) (unaudited) 2011 2010 2010
ASSETS      
Cash and cash equivalents 144,703 92,650 37,821
Restricted cash 18,288 15,924 -
Trade and other receivables 50,500 60,420 39,632
Inventories 3,573 9,179 8,726
Other current financial assets - 769 -
Available-for-sale financial asset 2,208 23,251 -
Prepaid expenses 2,137 2,516 2,537
CURRENT ASSETS 221,409 204,709 88,716
       
Property, plant and equipment 643,047 738,884 412,707
Energy sales contracts 97,705 103,994 49,023
Water rights 111,844 113,015 4,146
Goodwill 38,063 38,063 -
Other intangible assets 5,285 15,432 8,363
Investment in the Fund - - 45,729
Interest in the Joint Venture 45,266 - -
Other non-current financial assets - - 7,297
Other non-current assets 14,236 31,410 36,815
NON-CURRENT ASSETS 955,446 1,040,798 564,080
TOTAL ASSETS 1,176,855 1,245,507 652,796
LIABILITIES      
Bank loans and overdraft - 195 12,291
Trade and other payables 34,209 59,558 31,798
Current portion of debt 26,659 34,033 24,273
Current income tax liability 10,776 3,209 283
Other current financial liabilities 29,757 183 -
CURRENT LIABILITIES 101,401 97,178 68,645
       
Non-current debt 479,525 479,546 206,116
Convertible debentures 223,347 220,824 -
Deferred income tax liability 26,031 66,455 33,181
Other non-current financial liabilities 14,273 10,834 7,645
Other non-current liabilities 3,400 2,981 -
NON-CURRENT LIABILITIES 746,576 780,640 246,942
TOTAL LIABILITIES 847,977 877,818 315,587
EQUITY      
Equity attributable to shareholders 321,764 359,357 330,178
Non-controlling interests 7,114 8,332 7,031
TOTAL EQUITY 328,878 367,689 337,209
TOTAL LIABILITIES AND EQUITY 1,176,855 1,245,507 652,796

Consolidated Statements of Earnings

  Three-month periods
ended December 31,
Twelve-month periods
ended December 31,
(in thousands of Canadian dollars, except per share amounts) (unaudited) 2011 2010 2011 2010
REVENUES        
Revenues from energy sales 56,492 53,733 194,025 102,812
Management revenues from the Fund - - - 4,437
Other income 167 119 680 718
  56,659 53,852 194,705 107,967
COSTS AND OTHER EXPENSES        
Operating costs 21,437 21,288 73,038 42,171
Administrative 3,972 3,874 17,238 15,026
Development 799 626 3,523 4,213
Management and operation of the Fund - - - 3,995
Amortization 14,583 13,228 57,833 31,383
Impairment loss (reversal) on property, plant and equipment (5,000) - 1,503 -
Impairment of goodwill - 23,158 - 23,158
Net gain on deemed disposal of investment in the Fund - 948 - (24,744)
Other gains - - (2,959) (774)
  35,791 63,122 150,176 94,428
OPERATING INCOME 20,868 (9,270) 44,529 13,539
         
Financing costs 12,639 10,977 49,664 23,850
Foreign exchange loss (gain) 2,386 767 (961) 701
Net loss on financial instruments 498 369 972 241
         
LOSS BEFORE THE FOLLOWING ITEMS 5,345 (21,383) (5,146) (11,253)
         
Share in earnings of the Fund - - - (3,148)
Share in earnings of the Joint Venture (150) - (150) -
Income taxes (recovery) 1,277 (24,639) (2,311) (38,016)
         
NET EARNINGS (LOSS) FROM CONTINUING OPERATIONS 3,918 3,256 (2,985) 23,615
Net earnings from discontinued operations 4,651 302 5,489 11,658
NET EARNINGS 8,569 3,558 2,504 35,273
         
NET EARNINGS ATTRIBUTABLE TO:        
  Shareholders of Boralex 8,187 3,080 2,883 35,072
  Non-controlling interests 382 478 (379) 201
NET EARNINGS 8,569 3,558 2,504 35,273
         
NET EARNINGS (LOSS) ATTRIBUTABLE TO SHAREHOLDERS OF BORALEX:        
  Continuing operations 3,536 2,778 (2,606) 23,414
  Discontinued operations 4,651 302 5,489 11,658
  8,187 3,080 2,883 35,072
         
NET EARNINGS (LOSS) PER SHARE (BASIC AND DILUTED) ATTRIBUTABLE TO SHAREHOLDERS OF BORALEX:        
  Continuing operations $0.10 $0.07 $(0.07) $0.62
  Discontinued operations $0.12  0.01 $0.15 $0.31
  $0.22 $0.08 $0.08 $0.93

Consolidated Statements of Comprehensive Income (Loss)

  Three-month periods
ended December 31,
Twelve-month periods
ended December 31,
(in thousands of Canadian dollars) (unaudited)   2011 2010 2011 2010
NET EARNINGS   8,569 3,558 2,504 35,273
OTHER COMPREHENSIVE INCOME (LOSS)          
Translation adjustments          
  Unrealized foreign exchange gain (loss) on translation of financial statements of self-sustaining foreign operations (4,849) (8,990) 4,996 (15,543)
  Taxes 259 (216) - (179)
Cash flow hedges          
  Change in fair value of financial instruments (14,045) 3,925 (53,948) (14,470)
  Hedging items realized and recognized in net earnings 2,222 969 6,040 2,884
  Hedging items realized and recognized in statement of financial position   - 804 198 5,652
  Taxes   2,397 (1,898) 13,405 1,831
Cash flow hedges - Joint Venture          
  Change in fair value of financial instruments (13,461) - (13,461) -
  Taxes 3,579 - 3,579 -
Available-for-sale financial asset          
  Change in fair value of an available-for-sale financial asset (131) (727) (278) (727)
  Items realized and recognized in net earnings - - (624) -
Discontinued operations   99 (1,904) (2,021) (2,998)
Total other comprehensive loss   (23,930) (8,037) (42,114) (23,550)
COMPREHENSIVE INCOME (LOSS)   (15,361) (4,479) (39,610) 11,723
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO:          
  Shareholders of Boralex (14,978) (3,743) (38,392) 12,711
  Non-controlling interests (383) (736) (1,218) (988)
COMPREHENSIVE INCOME (LOSS)   (15,361) (4,479) (39,610) 11,723
         
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO SHAREHOLDERS OF BORALEX:          
  Continuing operations (19,728) (2,141) (41,860) 4,051
  Discontinued operations 4,750 (1,602) 3,468 8,660
  (14,978) (3,743) (38,392) 12,711

Consolidated Statements of Changes in Equity

      2011
  Equity attributable to shareholders    
(in thousands of Canadian dollars) (unaudited) Capital
stock
Equity component of convertible debentures Contributed surplus Retained earnings Other comprehensive loss Total Non-controlling interests Total equity
Balance as at January 1, 2011 222,853 14,488 5,028 141,693 (24,705) 359,357 8,332 367,689
                 
Net earnings (loss) - - - 2,883 - 2,883 (379) 2,504
Other comprehensive loss - - - - (41,275) (41,275) (839) (42,114)
Comprehensive income (loss) - - - 2,883 (41,275) (38,392) (1,218) (39,610)
                 
Conversion of convertible debentures 258 - - - - 258 - 258
Share repurchase (353) - - (75) - (428) - (428)
Stock option expense - - 1,078 - - 1,078 - 1,078
Other - (109) - - - (109) - (109)
Balance as at December 31, 2011 222,758 14,379 6,106 144,501 (65,980) 321,764 7,114 328,878

      2010
  Equity attributable to  shareholders    
(in thousands of Canadian dollars) (unaudited) Capital
stock
Equity component of convertible debentures Contributed surplus Retained earnings Other comprehensive loss Total Non-controlling interests Total equity
Balance as at January 1, 2010 222,694 - 4,290 105,538 (2,344) 330,178 7,031 337,209
                 
Net earnings - - - 35,072 - 35,072 201 35,273
Other comprehensive loss - - - - (22,361) (22,361) (1,189) (23,550)
Comprehensive income (loss) - - - 35,072 (22,361) 12,711 (988) 11,723
                 
Conversion of convertible debentures 26 - - - - 26 - 26
Options exercised 133 - - - - 133 - 133
Excess of purchase price paid for acquisition of non-controlling interests - - - (2,332) - (2,332) 42 (2,290)
Excess of proceeds from partial sale of a subsidiary - - - 3,415 - 3,415 - 3,415
Stock option expense - - 738 - - 738 - 738
Issuance of convertible debentures and imputed interest - 14,488 - - - 14,488 - 14,488
Contribution of non-controlling interest - - - - - - 2,247 2,247
Balance as at December 31, 2010 222,853 14,488 5,028 141,693 (24,705) 359,357 8,332 367,689

Consolidated Statements of Cash Flows

  Three-month periods
ended December 31,
Twelve-month periods
ended December 31,
(in thousands of Canadian dollars) (unaudited) 2011 2010 2011 2010
Net earnings attributable to shareholders of Boralex 8,187 3,080 2,883 35,072
Less: Net earnings from discontinued operations 4,651 302 5,489 11,658
Net earnings (loss) from continuing operations 3,536 2,778 (2,606) 23,414
Distributions received from the Fund - - - 4,475
Financing costs 12,639 10,977 49,664 23,850
Interest paid (13,358) (10,806) (47,134) (24,312)
Income tax recovery 1,277 (24,639) (2,311) (38,016)
Income taxes paid (39) 11 (4,337) (2,524)
Non-cash items in earnings (loss):        
  Net loss on financial instruments 498 369 972 241
  Share in earnings of the Joint Venture 150 - 150 -
  Share in earnings of the Fund - - - 3,148
  Amortization 14,583 13,228 57,833 31,383
  Impairment loss (reversal) on property, plant and equipment (5,000) - 1,503 -
  Impairment of goodwill - 23,158 - 23,158
  Gain on sale of assets - - (2,377) (774)
  Gain on sale of assets to the Joint Venture - - (582) -
  Gain on deemed disposal of investment in the Fund - - - (30,874)
  Other 3,327 609 3,465 1,592
  17,613 15,685 54,240 14,761
Change in non-cash items related to operating activities (13,082) (650) 11,891 (613)
NET CASH FLOWS RELATED TO OPERATING ACTIVITIES 4,531 15,035 66,131 14,148
         
Additions to property, plant and equipment (5,517) (48,517) (34,419) (183,948)
Change in restricted cash (17,011) 19,098 (2,364) (15,924)
Business acquisition - the Fund - - - (38,811)
Business acquisition - Other - - (700) (2,142)
Increase in interest in the Joint Venture (42,573) - (52,949) -
Proceeds from sale of a subsidiary - - - 878
Change in reserve funds 8 - (2) 883
Development projects (439) (1,316) (1,620) (2,046)
Proceeds from sale of asset 2,150 - 4,200 -
Other (74) 37 436 35
NET CASH FLOWS RELATED TO INVESTING ACTIVITIES (63,456) (30,698) (87,418) (241,075)
         
Decrease in bank loans and overdraft 6 195 (195) (12,096)
Net increase in non-current debt 6,488 3,780 39,674 267,051
Repayments on non-current debt (2,608) (6,533) (45,035) (73,608)
Net issuance of convertible debentures - - - 103,945
Redemption of financial instruments prior to maturity (15,670) - (15,670) -
Share repurchase - - (428) -
Net proceeds from share issuance - 133 - 133
Distributions paid to unit holders - (1,565) - (1,565)
Repurchase of non-controlling interests - the Fund - (32,421) - (32,421)
Repurchase of non-controlling interests - Other - - - (1,751)
Increase in non-controlling interests - - - 5,662
Other (5) - (5) -
NET CASH FLOWS RELATED TO FINANCING ACTIVITIES (11,789) (36,411) (21,659) 255,350
Cash from discontinued operations, including proceeds on disposal 83,709 5,835 94,770 30,679
TRANSLATION ADJUSTMENT ON CASH AND CASH EQUIVALENTS (1,360) (1,843) 229 (4,273)
NET INCREASE IN CASH AND CASH EQUIVALENTS 11,635 (48,082) 52,053 54,829
CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR 133,068 140,732 92,650 37,821
CASH AND CASH EQUIVALENTS - END OF YEAR 144,703 92,650 144,703 92,650

Segmented Information

The Corporation's power stations are grouped into four distinct segments which represents the corporation segments—wind, hydroelectric, thermal and solar power station. The Corporation operates solely in 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 apply to the consolidated accounts.

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

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

EBITDA does not have a standardized meaning prescribed 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 December 31,
Twelve-month periods
ended December 31,
  2011 2010 2011 2010
Net earnings attributable to shareholders of Boralex 8,187 3,080 2,883 35,072
Net earnings from discontinued operations (4,651) (302) (5,489) (11,658)
Non-controlling interests 382 478 (379) 201
Income taxes (recovery) 1,277 (24,639) (2,311) (38,016)
Net loss on financial instruments 498 369 972 241
Foreign exchange loss (gain) 2,386 767 (961) 701
Financing costs 12,639 10,977 49,664 23,850
Other gains - - (2,959) (774)
Net gain on deemed disposal of investment in the Fund - 948 - (24,744)
Impairment of goodwill - 23,158 - 23,158
Impairment loss (reversal) on property, plant and equipment (5,000) - 1,503 -
Amortization 14,583 13,228 57,833 31,383
EBITDA 30,301 28,064 100,756 39,414

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

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

  Three-month periods
ended December 31,
Twelve-month periods
ended December 31,
  2011 2010 2011 2010
Net cash flows related to operating activities 4,531 15,035 66,131 14,148
Less:        
Change in non cash items related to operating activities (13,082) (650) 11,891 (613)
CASH FLOWS FROM OPERATIONS 17,613 15,685 54,240 14,761

Information by Operating Segment

  Three-month periods
ended December 31,
Twelve-month periods
ended December 31,
  2011 2010 2011 2010
Power production (MWh)        
Wind power stations 182,810 143,379 554,581 377,392
Hydroelectric power stations 196,522 220,380 703,612 328,290
Thermal power stations 114,225 132,312 469,835 170,529
Solar power station 1,017 - 3,227 -
  494,574 496,071 1,731,255 876,211
Revenues from energy sales        
Wind power stations 22,461 17,479 67,255 45,924
Hydroelectric power stations 15,982 18,060 56,319 26,221
Thermal power stations 17,584 18,194 68,975 30,667
Solar power station 465 - 1,476 -
  56,492 53,733 194,025 102,812
EBITDA        
Wind power stations 18,590 14,104 53,807 36,263
Hydroelectric power stations 11,386 14,401 41,623 18,929
Thermal power stations 4,100 4,019 20,638 6,132
Solar power station 399 - 1,330 -
Corporate and eliminations (4,174) (4,460) (16,642) (21,910)
  30,301 28,064 100,756 39,414
Additions to property, plant and equipment        
Wind power stations 197 41,624 12,291 175,217
Hydroelectric power stations 2,479 104 3,718 2,354
Thermal power stations 284 1,756 3,765 1,766
Solar power station 1,864 4,636 13,409 5,141
Corporate and eliminations 693 397 1,236 (530)
  5,517 48,517 34,419 183,948

  As at
December 31,
2011
As at
December 31,
2010
As at
January 1,
2010
Total assets      
Wind power stations 528,521 531,424 360,226
Hydroelectric power stations 366,099 364,534 34,019
Thermal power stations 101,683 201,257 167,223
Solar power station 23,586 7,607 -
Corporate 156,966 140,685 91,328
  1,176,855 1,245,507 652,796
Total liabilities      
Wind power stations 392,611 437,972 258,651
Hydroelectric power stations 143,439 139,922 29,499
Thermal power stations 29,581 26,476 15,778
Solar power station 21,043 3,286 -
Corporate 261,303 270,162 11,659
  847,977 877,818 315,587

Information by Geographic Segment

  Three-month periods
ended December 31,
Twelve-month periods
ended December 31,
  2011 2010 2011 2010
Power production (MWh)        
Canada 231,018 241,853 901,853 356,025
United States 137,709 146,590 466,381 225,045
France 125,847 107,628 363,021 295,141
  494,574 496,071 1,731,255 876,211
Revenues from energy sales        
Canada 26,844 25,184 102,404 38,590
United States 10,526 11,666 35,145 16,674
France 19,122 16,883 56,476 47,548
  56,492 53,733 194,025 102,812
EBITDA        
Canada 11,383 9,484 43,494 4,914
United States 7,835 9,343 27,029 11,111
France 11,083 9,237 30,233 23,389
  30,301 28,064 100,756 39,414
Additions to property, plant and equipment        
Canada 3,091 34,831 16,469 107,076
United States 167 2 669 731
France 2,259 13,684 17,281 76,141
  5,517 48,517 34,419 183,948

  As at
December 31,
2011
As at
December 31,
2010
As at
January 1,
2010
Total assets      
Canada 679,354 633,804 201,492
United States 209,003 301,639 181,125
France 288,498 310,064 270,179
  1,176,855 1,245,507 652,796
Non-current assets      
Canada 543,319 529,727 188,370
United States 156,631 247,977 131,089
France 255,496 263,094 244,621
  955,446 1,040,798 564,080
Total liabilities      
Canada 483,731 495,239 73,259
United States 122,827 125,869 32,956
France 241,419 256,710 209,372
  847,977 877,818 315,587

SOURCE BORALEX INC.

For further information:

Media
Andréan Gagné
Communications Advisor
Boralex Inc.
514-985-1353
andrean.gagne@boralex.com

Investors
Marc Jasmin
Boralex Inc.
514-284-9868
marc.jasmin@boralex.com

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