Boralex doubles its discretionary cash flows in 2019

MONTREAL, Feb. 28, 2020 /PRNewswire/ - For the three months ended December 31, 2019 and fiscal 2019, Boralex Inc. ("Boralex" or the "Corporation") (TSX: BLX) recorded an increase in EBITDA(A) and net earnings excluding unusual items. The increase reflects the contribution from sites acquired and commissioned, as well as higher revenues from energy sales from comparable sites.

"I'm very proud of our performance and achievements in the fourth quarter and fiscal 2019," said Patrick Lemaire, President and Chief Executive Officer of Boralex. "The growth in our financial results and our disciplined approach to investments generated a strong increase in discretionary cash flows during the year, which augurs well for achieving the 2023 financial objectives set out in our strategic plan."

With respect to the Corporation's outlook, Mr. Lemaire added that "the significant amounts generated from operations coupled with the funds freed up and the benefits from the many initiatives to optimize our capital structure have put us in an excellent position to accelerate our development activities in 2020. We now have projects totaling 225 MW in our Growth Path and another 2,703 MW in our portfolio of projects at various stages of completion; this will allow us to increase our production capacity in the next few years by close to 800 MW, taking us to our target of 2,800 MW in 2023."

In the 2019 fourth quarter, Boralex produced 1,364 GWh (1,677 GWh) of electricity, up 23% (17%) compared with 1,106 GWh (1,430 GWh) in the same quarter of 2018. All of the Corporation's operating segments contributed to this increase. The increase was particularly notable in the production by comparable assets in the wind power segment in France, which was 17% higher than in the fourth quarter of 2018 and 15% higher than anticipated.

For the three-month period ended December 31, 2019, revenues generated by energy sales rose to $179 million ($212 million), up $34 million ($34 million) or 24% (19%) compared with results for the corresponding quarter of 2018. This increase stems both from the expansion of the Corporation's operating base and the higher production by wind farms in France, given the more favorable wind conditions compared to the fourth quarter 2018.

For the fourth quarter 2019, the Corporation recorded consolidated EBITDA(A) of $143 million  ($165 million), up by $45 million ($44 million) or 47% (36%) compared to the corresponding quarter of 2018. As noted above, this increase stems from the positive differences resulting from the contribution of sites commissioned in the past year, including the repowering of the Buckingham hydroelectric power station in Québec, as well as the increase in production volume by comparable assets versus last year. In addition, the sale of land in Scotland added $6 million to EBITDA(A) in the fourth quarter.

Overall, for the three-month period ended December 31, 2019, Boralex recorded a net loss of $23 million ($15 million), versus net earnings of $9 million for the same period in 2018. As shown in the above table, this resulted in a net loss attributable to shareholders of Boralex of $26 million ($18 million) or $0.28 ($0.19) per share (basic and diluted), compared to net earnings attributable to shareholders of Boralex of $9 million or $0.09 per share (basic and diluted) for the fourth quarter of 2018. The decrease is entirely related to the unusual charges recorded in the quarter as noted below.

In the fourth quarter 2019, Boralex recorded a total of $58 million, or $51 million after tax, in three separate unusual items. The first is attributable to a re-assessment of amounts recorded for the Moulins du Lohan development project in France. An unusual charge of $51 million, or $47 million after tax, was recorded for this project to reflect a decrease in the value of a power sales contract following receipt of a notice from the Ministry for the Ecological and Inclusive Transition of France stating that the type of contract in question for this wind farm was no longer available because the goal of the CR-2016 support program would soon be reached. To obtain an energy sale contract for this project Boralex must now submit a proposal under one of the upcoming calls for tenders. This situation stems from the significant delays caused by the interruption, contested by Boralex, of construction of the wind farm. Note that in July 7, 2017, the Administrative Tribunal of Rennes had cancelled the construction permits for the project. Boralex then appealed this decision and the Administrative Court of Appeal of Nantes rendered decisions favorable to Boralex on March 5, 2019. This decision was challenged and an appeal in cassation was filed with the Council of State. The final judicial decision is expected to be handed down by the end of 2020. Note that this particular situation applies only to the Moulins du Lohan project and that the value assigned to all the other Boralex projects remains the same.

The second unusual item is a charge of $13 million, or $9 million after tax, related to the $1.7 billion refinancing arrangement in France. The third and final item is a gain of $6 million, or $5 million after tax, on the sale of land in Scotland, as noted above in the explanation regarding the difference in EBITDA(A).

Excluding these unusual items after taxes, Boralex recorded net earnings of $28 million ($36 million) in the fourth quarter 2019. This amounts to net earnings attributable to shareholders of Boralex of $25 million ($33 million) or $0.26 ($0.35) per share (basic and diluted).

Highlights of Fiscal 2019
For fiscal years ended December 31
	IFRS		Combined(1)
(in millions of Canadian dollars, unless otherwise specified)	2019	2018	2019	2018
Power production (GWh)(1)	4,371	3,568	5,544	4,305
Revenues from energy sales and feed-in premium	564	471	687	549
EBITDA(A)(2)	402	298	492	354
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