Boralex Announces 2006 Revenues Up 10% Driven by Strong Growth in Wind Power Segment

    MONTREAL, March 1 /CNW Telbec/ - Boralex Inc. (TSX-BLX) ("Boralex" or the
"Corporation") announces that for its fiscal year ended December 31 2006,
revenue from energy sales were up $11.3 million to $120 million. In 2006,
earnings before interest, taxes, depreciation and amortization (EBITDA) rose
26% to $42.8 million, compared to $34.1 million a year earlier. Net earnings
stood at $15 million or $0.50 per common share in 2006, compared to
$21.1 million or $0.70 per share in 2005.

    
    (in millions of dollars, except per share data)
    -------------------------------------------------------------------------
                                  Three months ended     Twelve months ended
                               ----------------------------------------------
                                December    December    December    December
                                      31,         31,         31,         31,
                                    2006        2005        2006        2005
                               ----------------------------------------------
    Revenue from energy sales       35.4        30.3       120.0       108.7
    EBITDA                          12.0         9.7        42.8        34.1
    Net earnings                     4.7         9.4        15.0        21.1
    Net earnings per share
     (diluted)                     $0.16       $0.31       $0.50       $0.70
    -------------------------------------------------------------------------

    The Corporation's significant growth in revenue and EBITDA stems mainly
from the major expansion in the wind power segment, higher productivity by the
hydroelectric power stations in the northeastern United States and the sale of
excess CO2 quota in France.
    Revenue in the wind power segment almost quadrupled to $23.2 million,
compared to $6.3 million in 2005. EBITDA for this segment was $19.8 million in
2006, almost five times the amount reported a year earlier. This performance
is primarily due to the start-up of two wind farms in Massif Central and one
in Plouguin. The hydroelectric power stations reported revenue of
$10.9 million, up 9.8% over 2005. Good hydrology in the northeastern United
States permitted this segment to exceed its average historical production by
22%. At $71.1 million, revenues in the wood-residue segment were down
$7.4 million, compared to $78.5 million in 2005. EBITDA decreased by
$11.3 million in 2006. This decrease is due to the $1.9 million reduction in
Renewable Energy Certificates ("REC") sales and higher wood-residue supply
costs. Lastly, the Blendecques power station has benefited from higher energy
prices and the sale of its excess quota, ending 2006 with revenues of
$14.8 million.
    In the fourth quarter of 2006, revenue from energy sales totalled
$35.4 million, a growth of $5.1 million, or 17%, versus revenue of
$30.3 million in the fourth quarter of 2005. EBITDA rose 24%, to $12 million,
compared to EBITDA of $9.7 million for the same period a year earlier. The
higher revenues and EBITDA in the fourth quarter are mainly due to strong
expansion in the wind power segment.
    "We are confident that in 2007 Boralex will see significant growth in its
results due to the anticipated recovery in the wood-residue segment and the
expansion in the wind power segment. To this end, we are currently
implementing an action plan to improve the performance of our wood-residue
power stations," said Patrick Lemaire, president and chief executive officer
of Boralex.
    Consequently, the Corporation took the following measures :

    - the Stratton power station has sold, to date, US$13 million in RECs
      for the period from 2007 until 2009 ;
    - at the end of December 2006, the Ashland and Fort Fairfield power
      stations have signed, with a leader in the American energy market, a
      26-month electricity contracts with terms that reflect current market
      conditions.

    Note also that the Stillwater hydroelectric power station potential
acquisition was abandoned in light of unsatisfactory findings in the course of
the due diligence process. Lastly, the Sherman power station will be closed
effective March 1 for an indefinite period.

    About Boralex

    Boralex focuses on four types of power generation: hydroelectric power,
wind power and thermal or cogeneration power from natural gas or wood residue.
These are all fields where Boralex has developed proven expertise centred on
renewable energy. Boralex employs about 300 workers and owns 21 power stations
in Quebec, the United States and France, with an installed capacity of 333 MW.
With a new wind farm under construction, its installed capacity will soon be
up 12 MW. Boralex also owns an urban wood processing and recycling centre
located in Montreal. 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 financial statements included in this press release
also contain certain financial measurements that are not recognized as
generally accepted accounting principles.
    To assess the operating performance of its assets and reporting segments,
the Corporation uses Earnings before interest, taxes, depreciation and
amortization (EBITDA) as a performance measurement. EBITDA is not defined
under Generally Accepted Accounting Principles (GAAP) and does not have a
standardized meaning prescribed by GAAP. Therefore, this measure may not be
comparable to similar measures presented by other enterprises. EBITDA is
defined in note 2 of the financial statements included with this press
release, as well as in the latest annual report of the Corporation.


    Notice to shareholders

    These quarterly financial statements for the periods ended December 31,
2006 and 2005 were not reviewed by our auditors PricewaterhouseCoopers LLP.
The financial statements are the responsability of the Management of Boralex
Inc. They were reviewed and approved by its Board of Directors, as recommended
by its Audit Committee.


    Consolidated balance sheets
    (in thousands of dollars)
    -------------------------------------------------------------------------
                                                           As at       As at
                                                        December    December
                                                              31          31
                                                            2006        2005
    -------------------------------------------------------------------------
                                                      (unaudited)   (audited)
    Assets

    Current assets
    Cash and cash equivalents                             13,899      10,615
    Accounts receivable                                   26,964      26,006
    Inventories                                            5,342       5,232
    Prepaid expenses                                       2,776       1,955
    Future income taxes                                        -       7,979
    -------------------------------------------------------------------------
                                                          48,981      51,787

    Investment                                            75,553      77,997
    Property, plant and equipment                        282,489     262,460
    Electricity sale contracts                            20,631      16,814
    Future income taxes                                    6,249           -
    Other assets                                          44,480      20,457
    -------------------------------------------------------------------------
                                                         478,383     429,515
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Liabilities

    Current liabilities
    Bank loans and advances                                    -       1,215
    Accounts payable and accrued liabilities              20,005      28,608
    Income taxes                                           1,786       2,787
    Current portion of long-term debt                     41,835      37,802
    -------------------------------------------------------------------------
                                                          63,626      70,412

    Long-term debt                                       192,493     164,832
    Future income taxes                                   21,564      28,026
    Deferred revenues                                     16,368           -
    Non-controlling interests                                730       1,034
    -------------------------------------------------------------------------
                                                         294,781     264,304
    Shareholders' equity
    Capital stock                                        112,451     111,686
    Retained earnings                                     99,208      84,188
    Cumulative translation adjustments                   (28,057)    (30,663)
    -------------------------------------------------------------------------
                                                         183,602     165,211
    -------------------------------------------------------------------------
                                                         478,383     429,515
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    See accompanying notes


    Consolidated statements of earnings
    (in thousands of dollars, except per-share
    amounts and number of shares)
    (unaudited)

                                                                     For the
                                    For the quarters    twelve-month periods
                                   ended December 31       ended December 31
                                    2006        2005        2006        2005
    -------------------------------------------------------------------------

    Revenue from
     energy sales                 35,439      30,306     120,002     108,696
    Renewable energy
     tax credits                   2,261       2,870      10,622      11,039
    Operating costs               26,740      23,508      94,572      87,851
    -------------------------------------------------------------------------
                                  10,960       9,668      36,052      31,884

    Share in earnings
     of the Fund                   2,244       2,404      10,023       8,873
    Management revenue
     from the Fund                 1,377       1,318       5,457       5,357
    Other revenues                   928          28       4,776       1,563
    -------------------------------------------------------------------------
                                  15,509      13,418      56,308      47,677
    -------------------------------------------------------------------------
    Other expenses
    Management and
     operation of the Fund         1,110       1,080       4,249       4,054
    Administration                 2,439       2,657       9,237       9,539
    -------------------------------------------------------------------------
                                   3,549       3,737      13,486      13,593
    -------------------------------------------------------------------------
    Earnings before
     amortization                 11,960       9,681      42,822      34,084
    -------------------------------------------------------------------------

    Amortization                   6,429       3,525      20,880      11,037
    Financial expenses             3,725       1,336      12,528       4,421
    -------------------------------------------------------------------------
                                  10,154       4,861      33,408      15,458
    -------------------------------------------------------------------------
    Earnings before
     income taxes                  1,806       4,820       9,414      18,626
    Income tax recovery           (2,949)     (4,515)     (5,774)     (2,560)
    -------------------------------------------------------------------------
                                   4,755       9,335      15,188      21,186
    Non-controlling interests        (42)         27        (168)        (98)
    -------------------------------------------------------------------------
    Net earnings                   4,713       9,362      15,020      21,088
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Net earnings
     per class A share
     (basic)                       $0.16       $0.31       $0.50       $0.70
    Net earnings
     per class A share
     (diluted)                     $0.15       $0.31       $0.49       $0.70
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Weighted average
     number of
     class A shares
      outstanding (basic)     30,049,586  29,987,978  30,033,885  29,986,994
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    See accompanying notes


    Consolidated statements of retained earnings
    (in thousands of dollars)
    (unaudited)
                                                For the twelve-month periods
                                                           ended December 31
                                                            2006        2005
    -------------------------------------------------------------------------

    Balance - beginning of period                         84,188      63,100

    Net earnings                                          15,020      21,088
    -------------------------------------------------------------------------
    Balance - end of period                               99,208      84,188
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    See accompanying notes


    Consolidated statements of cash flows
    (in thousands of dollars)
    (unaudited)
                                                                     For the
                                    For the quarters    twelve-month periods
                                   ended December 31       ended December 31
                                    2006        2005        2006        2005
    -------------------------------------------------------------------------

    Operating activities
    Net earnings                   4,713       9,362      15,020      21,088
    Distributions received
     from the Fund                 3,099       3,098      12,392      12,391
    Items not affecting cash
      Change in the fair value
       of electricity swaps            -         565           -         565
      Share in earnings
       of the Fund                (2,244)     (2,404)    (10,023)     (8,873)
      Amortization                 6,429       3,525      20,880      11,037
      Amortization of deferred
       financing costs               104         334         475         477
      Renewable energy
       tax credit                 (1,509)     (2,870)     (9,870)    (11,039)
      Future income taxes         (2,845)     (1,604)     (5,100)         86
      Others                         195         113         744         487
    -------------------------------------------------------------------------
    Cash flows from operations     7,942      10,119      24,518      26,219
    Net change in non-cash
     working capital balances     (2,359)    (12,043)    (10,713)     (6,907)
    -------------------------------------------------------------------------
                                   5,583      (1,924)     13,805      19,312
    -------------------------------------------------------------------------
    Investing activities
    Purchase of property,
     plant and equipment          (1,486)    (23,332)    (19,201)   (135,753)
    Other assets                     154      (1,718)     (7,798)     (3,034)
    Business acquisitions         (3,587)     (2,259)     (6,749)    (18,642)
    Proceeds on disposal
     of property, plant
     and equipment                     -           -           -         400
    -------------------------------------------------------------------------
                                  (4,919)    (27,309)    (33,748)   (157,029)
    -------------------------------------------------------------------------
    Financing activities
    Bank loans and advances            -       6,162      (1,215)     19,637
    Increase in long-term debt     1,377      29,210      69,629     136,108
    Payments of long-term debt    (4,773)     (5,208)    (56,487)     (9,075)
    Financing costs                    -         179      (1,167)     (2,547)
    Net proceeds on
     issuance of shares                -          12         273          12
    Monetization program,
     net of related expenses      12,289           -      10,935           -
    Others                             -         (75)          -         (72)
    -------------------------------------------------------------------------
                                   8,893      30,280      21,968     144,063
    -------------------------------------------------------------------------
    Translation adjustments
     on cash and
     cash equivalents                671         392       1,259      (1,173)
    -------------------------------------------------------------------------
    Net change in cash
     and cash equivalents         10,228       1,439       3,284       5,173

    Cash and cash equivalents -
     beginning of period           3,671       9,176      10,615       5,442
    -------------------------------------------------------------------------

    Cash and cash equivalents -
     end of period                13,899      10,615      13,899      10,615
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    SUPPLEMENTAL DISCLOSURE
    Cash and cash equivalents
     paid (received) for:
      Interest                     3,608       3,037      12,028       6,489
      Income taxes                  (100)     (1,100)        720         356
    -------------------------------------------------------------------------
    See accompanying notes


    Notes to interim consolidated financial statements
    (tabular amounts in thousands of dollars, unless otherwise specified)
    (unaudited)

    Note 1 - Accounting policies

    These unaudited interim consolidated financial statements were prepared
following the same accounting policies as the ones used in the latest audited
consolidated financial statements. These unaudited interim consolidated
financial statements and notes should be read in conjunction with the
Corporation's audited consolidated financial statements as at December 31,
2005.

    Note 2 - Segmented information

    The Corporation's power stations are grouped under four distinct segments:
hydroelectric power, wood-residue thermal power, natural gas thermal power and
wind power, and are engaged mainly in the production of energy. The
classification of these segments is based on the different cost structures
relating to each type of power station. The accounting policies that apply to
the individual segments are the same policies used for the consolidated
financial statements as described in note 1.
    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 for assessing the operating performance of its
reportable segments. Earnings for each segment are presented on the same basis
as those of the Corporation.

    The following table                                              For the
     reconciles EBITDA to           For the quarters    twelve-month periods
     net earnings:                 ended December 31       ended December 31
                                    2006        2005        2006        2005
                                ---------------------------------------------
    Net earnings                   4,713       9,362      15,020      21,088
    Non-controlling interests         42         (27)        168          98
    Income tax recovery           (2,949)     (4,515)     (5,774)     (2,560)
    Financial expenses             3,725       1,336      12,528       4,421
    Amortization                   6,429       3,525      20,880      11,037
    -------------------------------------------------------------------------
    Consolidated EBITDA           11,960       9,681      42,822      34,084
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Information by segment
                                                                     For the
                                    For the quarters    twelve-month periods
                                   ended December 31       ended December 31
                                    2006        2005        2006        2005
    -------------------------------------------------------------------------

    PRODUCTION (in MWh)
    Hydroelectric power stations  37,865      33,640     138,518     109,761
    Wood-residue thermal power
     stations                    272,100     271,049   1,010,206   1,012,540
    Natural gas thermal power
     station                      15,608      14,848      38,365      37,328
    Wind power stations           61,922      14,083     189,964      45,695
    -------------------------------------------------------------------------
                                 387,495     333,620   1,377,053   1,205,324
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    REVENUE FROM ENERGY SALES
    Hydroelectric power stations   2,867       3,440      10,939       9,962
    Wood-residue thermal power
     stations                     19,891      20,511      71,126      78,474
    Natural gas thermal power
     station                       4,954       4,233      14,763      13,944
    Wind power stations            7,727       2,122      23,174       6,316
    -------------------------------------------------------------------------
                                  35,439      30,306     120,002     108,696
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    EBITDA
    Hydroelectric power stations   1,974       2,251       7,481       6,453
    Wood-residue thermal power
     stations                      1,167       4,366       5,586      16,904
    Natural gas thermal power
     station                       1,322         885       5,405       2,700
    Wind power stations            6,782         916      19,766       4,148
    Corporate and eliminations       715       1,263       4,584       3,879
    -------------------------------------------------------------------------
                                  11,960       9,681      42,822      34,084
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                                                                     For the
                                    For the quarters    twelve-month periods
                                   ended December 31       ended December 31
                                    2006        2005        2006        2005
                                ---------------------------------------------
    PURCHASE OF PROPERTY, PLANT
     AND EQUIPMENT
    Hydroelectric power stations     221          16         600         366
    Wood-residue thermal power
     stations                        726       6,665       8,671      22,910
    Natural gas thermal power
     station                           -         137          24         261
    Wind power stations              535      16,395       9,688     111,923
    Corporate and eliminations         4         119         218         293
    -------------------------------------------------------------------------
                                   1,486      23,332      19,201     135,753
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                                     December 31 December 31
                                                            2006        2005
    -------------------------------------------------------------------------
    ASSETS
    Hydroelectric power stations                          34,284      26,787
    Wood-residue thermal power stations                  147,099     128,287
    Natural gas thermal power station                     21,944      18,258
    Wind power stations                                  196,987     175,940
    Corporate and eliminations                            78,069      80,243
    -------------------------------------------------------------------------
                                                         478,383     429,515
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

For further information:

For further information: Patricia Lemaire, Director, Communications,
Boralex Inc., (514) 985-1353, patricia_lemaire@cascades.com