Boralex Announces Results for Third Quarter 2009

MONTREAL, Nov. 11 /CNW Telbec/ - Boralex Inc. ("Boralex" or the "Corporation") reported $39.7 million in revenue from energy sales in the third quarter 2009, down $9.1 million, stemming from lower electricity prices in the U.S. market and, to a lesser extent, lower production volumes by the wood-residue power stations. The decrease was partially offset by higher power generation in the hydroelectric segment, which was above the historical average.

    
    (in millions of dollars, except per share data)
    -------------------------------------------------------------------------
                               Three-month                 Nine-month
                              periods ended               periods ended
                       ------------------------------------------------------
                         September     September     September     September
                          30, 2009      30, 2008      30, 2009      30, 2008
                       ------------------------------------------------------

    Revenue from
     energy sales             39.7          48.8         138.6         142.9
    EBITDA                    11.4          16.8          45.3          53.2
    Net earnings               0.7           5.7           9.7          16.0
    Net earnings per
     share (basic)           $0.02         $0.15         $0.26         $0.42
    Cash flow from
     operations                9.2          13.9          36.1          44.1
    -------------------------------------------------------------------------
    

In the third quarter ended September 30, 2009, earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to $11.4 million versus $16.8 million for the same period in 2008, as a result of the revenue decrease described above. These decreases were mitigated by the electricity price hedging strategy and the lower cost of wood-residue. Boralex closed the third quarter of fiscal 2009 with net earnings of $0.7 million or $0.02 per share, compared to $5.7 million or $0.15 per share for the same period in 2008.

Third quarter revenue of $5.8 million for the wind power segment was down 1.7% from the third quarter 2008, mainly due to slightly less favourable wind conditions as compared to last year at most wind power sites. This decrease was largely offset by the contractual indexing of electricity prices. These factors, combined with a slight increase in maintenance costs, contributed to a 4.5% net decrease in EBITDA, which stood at $4.2 million. During the quarter, the Corporation also signed two financing agreements for new wind power sites, one for its first four wind farms in Canada and one for a site in France.

The Corporation also successfully qualified for the Advanced RESOP program, which will augment the selling price by about $16 per MWh for the first four wind farms in Ontario, for additional revenue of $1.7 million per year over the next 10 years.

The hydroelectric segment reported revenue of $1.8 million in the third quarter 2009, down $0.1 million against the same quarter in 2008. EBITDA amounted to $0.3 million versus $0.8 million in 2008. These results are mainly due to a significant decline in electricity selling prices (in US$) on the U.S. open market, related to the economic recession and the fall in natural gas prices. However, this segment benefited from the addition of the new Ocean Falls power station in British Columbia.

In the third quarter 2009, revenue from the wood-residue thermal power segment amounted to $29.8 million compared to $37.9 million for the same quarter in 2008; the decrease stems from lower electricity selling prices in the Northeastern U.S. EBITDA in this segment was down $2.9 million to $10.7 million. However, the decrease was mitigated by lower fuel and maintenance costs related to the shutdown of the Stacyville power station.

Results for the natural gas cogeneration power station continue to be affected by lower steam selling prices, which reduced revenues by $0.8 million. However, lower cost of natural gas offset this decrease by $0.9 million, resulting in a net decrease of $0.1 million in EBITDA.

"Despite the difficult economic conditions in the energy market, Boralex continues to maintain significant cash flows, which makes it easier for it to achieve its strategic objectives in Europe and North America," stated Patrick Lemaire, President and Chief Executive Officer. "The success of our most recent financing arrangements demonstrates the quality of the projects we are developing and will definitely help strengthen our financial performance in the months ahead," said Mr. Lemaire.

About Boralex

Boralex is a major private electricity producer whose core business is the development and operation of power stations that generate renewable energy.

Employing over 300 people, the Corporation owns and operates 22 power stations with a total installed capacity of 365 MW in Canada, in the Northeastern United States and in France. In addition, the Corporation has more than 300 MW of power projects under development of which 40 MW will be put into operation in the next couple of weeks. Boralex is distinguished by its diversified expertise and in-depth experience in three power generation segments - wind, hydroelectric and thermal.

Boralex also holds a 23% interest in Boralex Power Income Fund, which has 10 power stations with a total installed capacity of 190 MW in Québec and the United States. These sites are managed by Boralex.

Boralex shares are listed on the Toronto Stock Exchange (TSX) under the ticker symbol BLX.

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 effect of general economic conditions on market and industry, increases in raw material costs, changes in the relative values of certain currencies, fluctuations in selling prices, and other factors listed in the Company's filings with different securities commissions.

The summarized financial statements included in this press release also contain certain financial measurements that are not recognized as Generally Accepted Accounting Principles of Canada (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. These measures are not defined under GAAP and do not have a standardized definition prescribed by GAAP. Therefore, they may not be comparable to similar measures presented by other companies. EBITDA is defined in the summarized financial statements included with this press release. Cash flows from operations corresponds to cash flows from operating activities before changes in non-cash working capital items as disclosed in the consolidated statements of cash flows attached in this press release.

Notice to shareholders

These interim consolidated financial statements as at September 30, 2009 and 2008 have not been reviewed by our auditors PricewaterhouseCoopers LLP. These financial statements are the responsibility of the management of Boralex Inc. and have been reviewed and approved by the Board of Directors, on the recommendation of its Audit Committee.

The following financial information was extracted from the interim consolidated financial statements of Boralex Inc. (the "Corporation"). The complete interim financial statements were prepared in accordance with Canadian generally accepted accounting principles. They are available on Boralex's website (www.boralex.com) and filed with SEDAR.

    
    Consolidated Balance Sheets
                                                         AS AT         AS AT
                                                  SEPTEMBER 30,  DECEMBER 31,
    (in thousands of dollars) (unaudited)                 2009          2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                                   (RESTATED)

    ASSETS
    CURRENT ASSETS
    Cash and cash equivalents                           37,638        69,195
    Accounts receivable                                 38,114        48,812
    Future income taxes                                    421           238
    Inventories                                         10,362         8,833
    Prepaid expenses                                     2,681         2,106
    -------------------------------------------------------------------------
                                                        89,216       129,184
    Investment                                          63,043        69,348
    Property, plant and equipment                      355,075       330,443
    Power sales contracts                               25,527        26,402
    Other assets                                        77,928        67,578
    -------------------------------------------------------------------------
                                                       610,789       622,955
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES
    CURRENT LIABILITIES
    Bank loans and advances                             13,217             -
    Accounts payable and accrued liabilities            17,614        22,115
    Income taxes                                         1,672         1,716
    Other liabilities                                    2,287         5,718
    Current portion of long-term debt                   28,607        29,410
    -------------------------------------------------------------------------
                                                        63,397        58,959
    Long-term debt                                     171,022       158,035
    Future income taxes                                 36,600        39,437
    Fair value of derivative financial instruments       6,127         3,000
    Non-controlling interests                              126           804
    -------------------------------------------------------------------------
                                                       277,272       260,235
    -------------------------------------------------------------------------
    SHAREHOLDERS' EQUITY
    Capital stock                                      222,694       222,694
    Contributed surplus                                  3,939         3,069
    Retained earnings                                  145,188       135,461
    Accumulated other comprehensive income (loss)      (38,304)        1,496
    -------------------------------------------------------------------------
                                                       333,517       362,720
    -------------------------------------------------------------------------
                                                       610,789       622,955
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Consolidated Statements of Earnings

    (in thousands of
     dollars, except
     amounts per             FOR THE THREE-MONTH          FOR THE NINE-MONTH
     share and number              PERIODS ENDED               PERIODS ENDED
     of shares)                     SEPTEMBER 30,               SEPTEMBER 30,
    (unaudited)               2009          2008          2009          2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                       (RESTATED)                  (RESTATED)

    Revenues from
     energy sales           39,676        48,811       138,631       142,931
    Renewable energy
     tax credits             3,473         3,532        10,449         9,063
    Operating costs         28,339        34,079        97,193        96,718
    -------------------------------------------------------------------------
                            14,810        18,264        51,887        55,276
    Share in earnings
     of the Fund               146         1,180         2,998         6,218
    Management
     revenues from
     the Fund                1,338         1,349         4,087         4,042
    Other income               117           514         1,773         1,159
    -------------------------------------------------------------------------
                            16,411        21,307        60,745        66,695
    -------------------------------------------------------------------------

    OTHER EXPENSES
    Management and
     operation of
     the Fund                1,104         1,073         3,441         3,050
    Administrative           3,862         3,469        11,964        10,414
    -------------------------------------------------------------------------
                             4,966         4,542        15,405        13,464
    -------------------------------------------------------------------------

    OPERATING INCOME
     BEFORE
     AMORTIZATION           11,445        16,765        45,340        53,231

    Amortization             6,434         6,344        19,382        18,150
    Foreign exchange
     loss (gain)               236          (185)          202          (603)
    Net loss (gain)
     on financial
     instruments               398        (1,010)           (6)           94
    Financing costs          3,362         3,515        10,228         9,971
    -------------------------------------------------------------------------
                            10,430         8,664        29,806        27,612
    -------------------------------------------------------------------------

    EARNINGS BEFORE
     INCOME TAXES            1,015         8,101        15,534        25,619

    Income taxes               316         2,427         5,751         9,495
    -------------------------------------------------------------------------
                               699         5,674         9,783        16,124
    Non-controlling
     interests                  (1)            5           (56)         (112)
    -------------------------------------------------------------------------

    NET EARNINGS               698         5,679         9,727        16,012

    Net earnings
     per Class A
     share (basic)           $0.02         $0.15         $0.26         $0.42
    Net earnings
     per Class A
     share (diluted)         $0.02         $0.15         $0.26         $0.42

    Weighted average
     number of
     Class A shares
     outstanding
     (basic)            37,740,921    37,831,382    37,740,921    37,739,288
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Consolidated Statements of Retained Earnings

                                                          FOR THE NINE-MONTH
                                                               PERIODS ENDED
                                                                SEPTEMBER 30,
    (in thousands of dollars) (unaudited)                 2009          2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                                   (RESTATED)
    Balance - beginning of period, as previously
     reported                                          135,783       115,669

    Application of Section                                (322)         (336)
    -------------------------------------------------------------------------
    Balance - beginning of period                      135,461       115,333
    Share redemption premium                                 -           (83)
    Net earnings for the period                          9,727        16,012
    -------------------------------------------------------------------------
    Balance - end of period                            145,188       131,262
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Consolidated Statements of Comprehensive Income (Loss)

                            FOR THE THREE-MONTH           FOR THE NINE-MONTH
                                  PERIODS ENDED                PERIODS ENDED
    (in thousands of               SEPTEMBER 30,                SEPTEMBER 30,
     dollars) (unaudited)     2009          2008          2009          2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                       (RESTATED)                  (RESTATED)
    Net earnings for
     the period                698         5,679         9,727        16,012
    -------------------------------------------------------------------------

    Other
     comprehensive
     income (loss)
      TRANSLATION
       ADJUSTMENTS
      Unrealized
       foreign
       exchange
       gain (loss)
       on translation
       of financial
       statements
       of self-
       sustaining
       foreign
       operations          (15,215)        3,090       (26,333)       10,466
      Reclassification
       to net earnings
       of a realized
       foreign
       exchange gain
       related to the
       reduction of
       net investment
       in self-
       sustaining
       foreign
       operations                -             -           (65)            -
      Share of
       cumulative
       translation
       adjustments
       of the Fund          (1,036)          699        (2,073)          868
      Taxes                    258          (224)          548          (228)
      CASH FLOW HEDGES
      Change in fair
       value of
       financial
       instruments          (2,099)       26,988         7,101        10,651
      Hedging items
       realized and
       recognized in
       net earnings         (5,857)          (49)      (18,617)        1,170
      Hedging items
       realized and
       recognized in
       balance sheet        (1,352)         (673)       (3,613)         (673)
      Taxes                  2,495        (8,405)        3,732        (3,567)
    -------------------------------------------------------------------------
                           (22,806)       21,426       (39,320)       18,687
    -------------------------------------------------------------------------
    Comprehensive
     income (loss)
     for the period        (22,108)       27,105       (29,593)       34,699
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Consolidated Statements of Cash Flows

                             FOR THE THREE-MONTH          FOR THE NINE-MONTH
                                   PERIODS ENDED               PERIODS ENDED
    (in thousands of                SEPTEMBER 30,               SEPTEMBER 30,
     dollars) (unaudited)     2009          2008          2009          2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                       (RESTATED)                  (RESTATED)

    OPERATING ACTIVITIES
    Net earnings               698         5,679         9,727        16,012
    Distributions
     received from
     the Fund                2,409         2,409         7,228         7,917
    Adjustments for
     non-cash items
      Financial
       instruments             535        (1,010)          534            94
      Share in
       earnings of
       the Fund               (146)       (1,180)       (2,998)       (6,218)
      Amortization           6,434         6,344        19,382        18,150
      Amortization of
       deferred
       financing
       costs and
       monetization
       program expenses        667           712         2,174         2,144
      Renewable energy
       tax credits          (2,231)       (1,506)       (3,948)       (2,996)
      Future income
       taxes                   402         2,119         3,053         8,074
      Other                    415           320           931           885
    -------------------------------------------------------------------------
                             9,183        13,887        36,083        44,062
    Change in non-cash
     working capital
     items                 (13,286)      (10,758)          110        (7,392)
    -------------------------------------------------------------------------
                            (4,103)        3,129        36,193        36,670
    -------------------------------------------------------------------------
    INVESTING ACTIVITIES
    Business acquisition         -        (5,156)       (4,769)       (5,781)
    Additions to
     property, plant
     and equipment         (25,385)       (6,129)      (60,133)      (33,284)
    Change in cash
     reserves                  300            26        (1,241)          (28)
    Development
     projects               (2,649)       (4,034)       (8,686)       (5,101)
    Acquisition of
     minority interest           -             -          (968)            -
    Other                   (1,212)          249        (7,035)       (1,467)
    -------------------------------------------------------------------------
                           (28,946)      (15,044)      (82,832)      (45,661)
    -------------------------------------------------------------------------
    FINANCING ACTIVITIES
    Increase (decrease)
     in bank loans
     and advances           (1,109)          448        13,217           448
    Increase in
     long-term debt         36,104             -        36,104             -
    Payments on
     long-term debt         (9,795)       (7,462)      (20,751)      (17,657)
    Financing costs         (2,328)            -        (2,547)            -
    Share redemption             -          (195)            -          (195)
    Net proceeds from
     share issuance              -            11             -         1,716
    -------------------------------------------------------------------------
                            22,872        (7,198)       26,023       (15,688)
    -------------------------------------------------------------------------
    TRANSLATION
     ADJUSTMENT ON
     CASH AND CASH
     EQUIVALENTS            (4,101)          (79)      (10,941)        4,195
    -------------------------------------------------------------------------
    NET CHANGE IN
     CASH AND CASH
     EQUIVALENTS           (14,278)      (19,192)      (31,557)      (20,484)
    CASH AND CASH
     EQUIVALENTS -
     BEGINNING OF
     PERIOD                 51,916        77,903        69,195        79,195
    -------------------------------------------------------------------------
    CASH AND CASH
     EQUIVALENTS -
     END OF PERIOD          37,638        58,711        37,638        58,711
    -------------------------------------------------------------------------
    ADDITIONAL
     INFORMATION
    CASH AND CASH
     EQUIVALENTS
     PAID FOR:
      Interest               2,387         2,413         6,604         7,273
      Income taxes             535           373         1,736         1,321
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

Segmented information

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

The Corporation analyzes the performance of its operating segments based on the earnings before interest, taxes, depreciation and amortization ("EBITDA"). EBITDA is not a measure of performance under canadian generally accepted acounting principles; however, management uses this measure to assess the operating performance of its segments. Results for each segment are presented on the same basis as those of the Corporation. In the consolidated statement of earnings, EBITDA is represented by operating income before amortization.

The following table reconciles EBITDA with net earnings:

    
                             FOR THE THREE-MONTH          FOR THE NINE-MONTH
                                   PERIODS ENDED               PERIODS ENDED
    (in thousands of                SEPTEMBER 30,               SEPTEMBER 30,
     dollars) (unaudited)     2009          2008          2009          2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                       (RESTATED)                  (RESTATED)

    Net earnings               698         5,679         9,727        16,012
    Non-controlling
     interests                   1            (5)           56           112
    Income taxes               316         2,427         5,751         9,495
    Financing costs          3,362         3,515        10,228         9,971
    Net loss (gain)
     on financial
     instruments               398        (1,010)           (6)           94
    Foreign exchange
     loss (gain)               236          (185)          202          (603)
    Amortization             6,434         6,344        19,382        18,150
    -------------------------------------------------------------------------
    EBITDA                  11,445        16,765        45,340        53,231
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    INFORMATION BY SEGMENT
                             FOR THE THREE-MONTH          FOR THE NINE-MONTH
    (in thousands of               PERIODS ENDED               PERIODS ENDED
     dollars, other than            SEPTEMBER 30,               SEPTEMBER 30,
     MWh) (unaudited)         2009          2008          2009          2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    OUTPUT (MWh)
    Wind power stations     39,758        40,665       155,677       163,818
    Hydroelectric power
     stations               27,554        21,522       104,286        97,224
    Wood-residue thermal
     power stations        297,851       354,560       852,253       937,694
    Natural gas thermal
     power station               -             -        22,642        22,569
    -------------------------------------------------------------------------
                           365,163       416,747     1,134,858     1,221,305
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    REVENUES FROM
     ENERGY SALES
    Wind power stations      5,797         5,859        22,898        22,601
    Hydroelectric power
     stations                1,779         1,920         7,381         8,909
    Wood-residue thermal
     power stations         29,841        37,866        96,360        98,856
    Natural gas thermal
     power station           2,259         3,165        11,992        12,564
    Corporate and
     eliminations                -             1             -             1
    -------------------------------------------------------------------------
                            39,676        48,811       138,631       142,931
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    EBITDA
    Wind power stations      4,247         4,361        17,704        17,909
    Hydroelectric power
     stations                  301           847         3,795         6,272
    Wood-residue thermal
     power stations         10,685        13,558        30,636        31,424
    Natural gas thermal
     power station            (126)         (157)        1,240           960
    Corporate and
     eliminations           (3,662)       (1,844)       (8,035)       (3,334)
    -------------------------------------------------------------------------
                            11,445        16,765        45,340        53,231
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    ADDITIONS TO
     PROPERTY, PLANT
     AND EQUIPMENT
    Wind power stations     24,024         3,235        53,877        22,132
    Hydroelectric power
     stations                  312            48         1,031            56
    Wood-residue thermal
     power stations            431           228         4,181         7,236
    Natural gas thermal
     power station               -            53            28            69
    Corporate and
     eliminations              618         2,565         1,016         3,791
    -------------------------------------------------------------------------
                            25,385         6,129        60,133        33,284
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                                         AS AT         AS AT
    (in thousands of                              SEPTEMBER 30,  DECEMBER 31,
     dollars) (unaudited)                                 2009          2008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                                   (RESTATED)
    ASSETS
    Wind power stations                                268,438       242,944
    Hydroelectric power stations                        45,153        23,019
    Wood-residue thermal power stations                152,002       183,881
    Natural gas thermal power station                   12,784        17,151
    Corporate and eliminations                         132,412       155,960
    -------------------------------------------------------------------------
                                                       610,789       622,955
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

SOURCE Boralex Inc.

For further information: For further information: Ms. Sophie Paquet, Communications Advisor, Boralex Inc., (514) 985-1353, sophie.paquet@boralex.com


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