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Production drop, high costs hurt Boralex's Q3 results

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Production drop, high costs hurt Boralex's Q3 results


November 12 (Solar) – Canadian renewables developer Boralex Inc (TSE:BLX) on Friday posted an expanded net loss for the third quarter of 2018, mainly due to a drop in production volumes and higher amortisation, acquisition and financing costs.

More specifically, the company closed the July-September quarter with a net loss attributable to shareholders of CAD 34 million (USD 25.8m/EUR 22.8m), against a loss of CAD 17 million a year before. The bottom line was impacted by some CAD 16 million in additional amortisation expenses, plus CAD 4 million in acquisition and financing costs. “The contribution of facilities acquired and commissioned over the past twelve months as well as the sound performance of Canadian wind farms offset the impact of less favourable wind conditions for French wind farms and Canadian and US hydroelectric power stations and a rise in development costs,” Boralex said.

Third-quarter revenues from energy sales improved by 6% on the year to CAD 79 million, while earnings before interest, tax, depreciation and amortisation (EBITDA) remained unchanged at CAD 39 million.

The table below gives more details about the company’s financial performance during the third quarter and first nine months of 2018. The Combined amounts in brackets are adjusted and are non-IFRS measures.

Figures in CAD million Q3 2018 Q3 2017 9mo 2018 9mo 2017
Combined IFRS Combined IFRS Combined IFRS Combined IFRS
Production (GWh) 679 548 706 605 2,763 2,350 2,632 2,258
Revenues from energy sales 93 79 85 74 371 326 325 285
Adjusted EBITDA 51 39 50 39 233 200 215 183
Adjusted EBITDA margin (%) 55 49 59 53 63 61 66 64
Cash flows from operations 15 23 17 24 125 121 131 127

President and CEO Patrick Lemaire noted that Boralex remains focused on its strategy that will enable it to achieve „substantial economies of scale” in the future. After buying Invenergy Renewables LLC’s interests in a 201-MW portfolio of five Canadian wind farms in September, the firm aims to bring online six more plants in Canada and France totalling 97 MW by end-2018. At present, the total installed capacity of Boralex amounts to 1,853 MW and it is expected to reach 2,065 MW at the end of 2020.

The Canadian firm noted its portfolio contains potential projects in Europe with a combined capacity of over 1,000 MW. Apart from opportunities on the French market, it said it is also exploring options for expanding in other European regions, particularly in the UK, while remaining active in North America, as well.

Boralex reiterated its EBITDA forecast for 2020, still expecting between CAD 390 million and CAD 410 million under IFRS, or CAD 480 million-500 million on a combined basis.

(CAD 1.0 = USD 0.758/EUR 0.670)


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