MONTREAL, Feb. 26 /CNW Telbec/ - In 2008, Boralex Inc. ("Boralex" or the "Corporation") achieves its best operational results in its history.
(in millions of dollars, except per share data)
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Three months ended Twelve months ended
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December 31, December 31, December 31, December 31,
2008 2007 2008 2007
----------------------------------------------------
Revenue from energy
sales 54.3 45.9 197.2 163.3
EBITDA 15.6 18.7 68.9 61.3
Net earnings before
specific items 4.4 3.2 20.4 17.6
per share (basic) $0.12 $0.08 $0.54 $0.51
Net earnings 4.4 5.9 20.4 21.5
per share (basic) $0.12 $0.16 $0.54 $0.63
Cash flows from
operations 11.1 16.0 55.3 51.5
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For the fiscal year ended December 31, 2008, revenue from energy sales was up 21% to $197.2 million, compared to $163.3 million in 2007. Earnings before interest, taxes, depreciation and amortization (EBITDA) rose to $68.9 million, versus $61.3 million in 2007, an increase of 12%. Patrick Lemaire, President and Chief Executive Officer, said that "this strong growth stems mainly from increases in REC sales in the United States and green certificates in France, a market that Boralex has always believed in and which will continue to grow. Our results were also improved by higher energy prices and electricity production volume."
Boralex closed fiscal 2008 with net earnings of $20.4 million, down $1.1 million from 2007, mainly due to non-recurring items that were recognized in 2007. Excluding these items, the Corporation has posted 16% growth in net earnings in 2008.
In the fourth quarter 2008, Boralex generated revenue of $54.3 million, up 18% over the same period in 2007. The increase stems from higher production volume in the wood residue segment, higher average selling prices, particularly in France, and the positive impact of currency fluctuations. Consolidated EBITDA for the fourth quarter 2008 amounted to $15.6 million, versus $18.7 million in 2007. For the three months ended December 31, 2008, Boralex recorded net earnings of $4.4 million ($0.12 per share), versus $5.9 million for the same quarter in 2007. Excluding the recognition in the fourth quarter of 2007 of a retroactivity related to RECs sales, the Corporation has posted EBITDA and net earnings growth of respectively 11% and a 38% in the fourth quarter 2008.
More specifically, in fiscal 2008, revenue from energy sales in the wind power segment increased by $2.8 million to $30.5 million, and EBITDA by $1.2 million to $24.0 million, due to the full contribution from La Citadelle and expansion of the Avignognet-Lauragais site.
The hydroelectric segment recorded revenue of $11.8 million in 2008, up 30% from $9.1 million in 2007, and annual EBITDA of $7.9 million versus $5.4 million, an increase of 46%. These gains are largely due to a 24% increase in power generation volume, arising from much better hydrology than in 2007.
The wood residue segment recorded revenue of $135.9 million, up $24.0 million over 2007. This increase stems mainly from growth in REC sales and production volume. This growth also impacted EBITDA, which rose to $40.5 million in 2008 versus $33.1 million in 2007. Results for the natural gas cogeneration plant also improved, with a $4.5 million increase in energy sales. Its EBITDA for 2008 was the same as in 2007.
Addressing Boralex's future prospects, Mr. Lemaire said that "Boralex is in an excellent position to pursue its growth. Given the current economic context, Boralex will be very prudent in its choice of investment projects. Moreover, due to the nature of our operations and our capital structure, we believe that the current situation could lead to business opportunities that we will be prepared to act on." Furthermore, this summer Boralex plans to start up Phase I (installed capacity of 40 MW) of its wind farm in southern Ontario. Mr. Lemaire added that "Boralex will also draw on its extensive experience as an operator to maximize the operating profits of its power stations."
Lastly, Boralex is working toward the conclusion of a power sale contract for its Fort Fairfield wood-residue power station for the period after March 1, 2009.
About Boralex
Boralex is a major private electricity producer whose core business is the development and operation of power stations that run on renewable energy. Employing more than 300 people, the Corporation owns and operates 21 power stations with a combined installed capacity of 351 MW in Quebec, the northeastern United States and France. The Corporation also has 226 MW of contracted capacity for future production sites. Boralex is distinguished by its leading expertise and long experience in three types of power generation - wind, hydroelectric and thermal. The Boralex shares trade on the Toronto stock exchange under the ticker symbol BLX. 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 summarized financial statements included in this press release also contain certain financial measurements that are not recognized as Generally Accepted Accounting Principles (GAAP).
To assess the operating performance of its assets and reporting segments, the Corporation uses Earnings before interest, taxes, depreciation and amortization (EBITDA), Cash flows from operations and Net earnings before specific items as performance measurements. These measures are not defined under GAAP and do not have a standardized meaning prescribed by GAAP. Therefore, they may not be comparable to similar measures presented by other enterprises. EBITDA and Net earnings before specific items are defined in the summarized financial statements included with this press release. Cash flows from operations corresponds to cash flow from operating activities before changes in non-cash working capital balances as disclosed in the consolidated statements of cash flows attached in this press release.
Notice to shareholders
The interim financial statements as at December 31, 2008 and 2007 have not been reviewed by our auditors PricewaterhouseCoopers LLP. The financial statements are the responsability of the Management of Boralex Inc. They have been reviewed and approved by its Board of Directors, as recommended by its Audit Committee.
The following financial informations were extracted from the interim consolidated financial statements of Boralex Inc. The complete interim financial statements were prepared conformingly with the Canadian generally accepted accounting principles (GAAP). They are available on the Boralex's website (www.boralex.com) and filed with SEDAR.
Consolidated Financial Statements
Consolidated Balance Sheets
(in thousands of dollars)
(unaudited)
As at As at
December 31, December 31,
2008 2007
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Assets
Current assets
Cash and cash equivalents 69,195 79,195
Accounts receivable 48,812 39,200
Future income taxes 238 2,394
Inventories 8,833 8,002
Prepaid expenses 2,106 2,171
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129,184 130,962
Investment 69,348 67,321
Property, plant and equipment 330,443 258,712
Electricity sales contracts 26,402 18,527
Other assets 68,121 39,209
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623,498 514,731
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Liabilities
Current liabilities
Accounts payable and accrued liabilities 22,113 20,869
Income taxes payable 1,716 1,481
Other liabilities 5,718 -
Current portion of long-term debt 29,410 26,786
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58,957 49,136
Long-term debt 158,035 148,747
Future income taxes 39,616 23,430
Fair value of derivative financial instruments 3,000 1,400
Other liabilities - 6,642
Non-controlling interests 805 607
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260,413 229,962
Shareholders' equity
Capital stock 222,694 221,557
Contributed surplus 3,069 1,974
Retained earnings 135,783 115,669
Accumulated other comprehensive loss 1,539 (54,431)
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363,085 284,769
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623,498 514,731
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Consolidated Statements of Earnings
(in thousands of dollars,
except per-share amounts
and number of shares)
(unaudited)
For the For the
three-month periods twelve-month periods
ended December 31, ended December 31,
2008 2007 2008 2007
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Revenue from energy sales 54,316 45,907 197,246 163,338
Renewable energy tax
credits 3,400 2,500 12,463 12,033
Operating costs 41,683 28,173 138,327 110,965
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16,033 20,234 71,382 64,406
Share in earnings of
the Fund 1,607 1,293 7,826 6,830
Management revenue from
the Fund 1,352 1,393 5,395 5,601
Other revenue 1,691 278 2,850 1,946
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20,683 23,198 87,453 78,783
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Other expenses
Management and operation
of the Fund 1,014 1,103 4,065 4,510
Administration costs 4,065 3,420 14,479 12,989
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5,079 4,523 18,544 17,499
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Operating earnings before
amortization 15,604 18,675 68,909 61,284
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Amortization 6,312 5,484 24,533 21,627
Foreign exchange loss
(gain) (834) (73) (1,437) 531
Financial instruments 49 752 143 (5,491)
Financing costs 3,836 2,782 13,807 14,685
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9,363 8,945 37,046 31,352
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Earnings before income
taxes 6,241 9,730 31,863 29,932
Income tax expense 1,825 3,783 11,321 8,457
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4,416 5,947 20,542 21,475
Non-controlling interests (34) (34) (146) 70
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Net earnings 4,382 5,913 20,396 21,545
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Net earnings per Class A
share (basic)
(in dollars) 0.12 0.16 0.54 0.63
Net earnings per Class A
share (diluted)
(in dollars) 0.12 0.15 0.54 0.62
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Weighted average number
of Class A shares
outstanding (basic) 37,740,921 37,454,625 37,739,840 34,403,033
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Consolidated Statements of Retained Earnings
(in thousands of dollars)
(unaudited)
For the
twelve-month periods
ended December 31,
2008 2007
-------------------------------------------------------------------------
Balance - beginning of period 115,669 97,649
Share issuance expenses, net of related taxes - (3,525)
Share redemption premium (282) -
Net earnings for the period 20,396 21,545
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Balance - end of period 135,783 115,669
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Consolidated Statements of Comprehensive Income
(in thousands of dollars)
(unaudited)
For the For the
three-month periods twelve-month periods
ended December 31, ended December 31,
2008 2007 2008 2007
-------------------------------------------------------------------------
Net earnings for the
period 4,382 5,913 20,396 21,545
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Other comprehensive
income (loss):
Translation adjustments
Unrealized foreign
exchange gains
(losses) on
translation of
financial
statements of
self-sustaining
foreign operations 30,571 (483) 41,046 (24,395)
Unrealized foreign
exchange gains
related to the
reduction of
net investment
in self-sustaining
foreign operations (1,285) - (1,285) -
Share of cumulative
translation
adjustments of the
Fund 3,429 161 4,297 (2,670)
Taxes (784) (722) (1,012) 519
Cash flow hedges
Change in fair value
of financial
instruments 12,890 884 23,541 2,828
Hedging items
realized and
recognized in
net earnings (6,654) (255) (5,484) (1,959)
Hedging items
realized and
recognized in
balance sheet - - (673) -
Termination of
hedging
relationships - - - (5,874)
Taxes (893) (202) (4,460) 1,602
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37,274 (617) 55,970 (29,949)
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Comprehensive income
(loss) for the period 41,656 5,296 76,366 (8,404)
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Consolidated Statements of Cash Flows
(in thousands of dollars)
(unaudited)
For the For the
three-month periods twelve-month periods
ended December 31, ended December 31,
2008 2007 2008 2007
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Operating activities
Net earnings 4,382 5,913 20,396 21,545
Distributions received
from the Fund 2,409 3,098 10,326 12,391
Adjustments for non-cash
items
Share in earnings of
the Fund (1,607) (1,293) (7,826) (6,830)
Amortization 6,312 5,484 24,533 21,627
Amortization of deferred
financing costs and
monetization program
expenses 784 737 2,928 2,795
Renewable energy tax
credits (1,588) (1,099) (4,583) (4,460)
Future income taxes 1,331 2,390 9,406 8,348
Financial instruments 49 752 143 (5,491)
Other (935) 34 (49) 1,623
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11,137 16,016 55,274 51,548
Change in non-cash
working capital balances 6,287 (9,995) (1,005) (16,491)
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17,424 6,021 54,269 35,057
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Investing activities
Business acquisitions - - (5,781) -
Purchase of property,
plant and equipment (11,293) (5,586) (44,577) (22,478)
Change in debt servicing
reserves 49 (41) 21 6,175
Development projects (517) (1,994) (5,617) (4,609)
Other (2,208) (154) (3,748) (2,595)
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(13,969) (7,775) (59,702) (23,507)
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Financing activities
Decrease in bank loans
and advances (448) - - -
Increase in long-term debt 126 - 126 151,437
Payments on long-term debt (1,602) (1,468) (19,258) (198,454)
Monetization program and
related expenses - - - (1,632)
Financing costs - (52) - (593)
Share repurchase (665) - (859) -
Net proceeds from share
issuance - - 1,714 105,307
Other 30 - 36 (50)
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(2,559) (1,520) (18,241) 56,015
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Translation adjustment on
cash and cash equivalents 9,588 585 13,674 (2,269)
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Net change in cash and
cash equivalents 10,484 (2,689) (10,000) 65,296
Cash and cash equivalents
- beginning of period 58,711 81,884 79,195 13,899
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Cash and cash equivalents
- end of period 69,195 79,195 69,195 79,195
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SUPPLEMENTAL INFORMATION
Cash and cash equivalents
paid for:
Interests 2,543 2,406 9,816 11,522
Income taxes 462 59 1,783 1,065
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Segmented Information
(tabular amounts in thousands of dollars, unless otherwise specified)
(unaudited)
The Corporation's power stations are grouped under 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
type of power station.
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 to assess the operating performance of its segments.
Earnings for each segment are presented on the same basis as those of the
Corporation.
The following table reconciles EBITDA with net earnings:
For the For the
three-month periods twelve-month periods
ended December 31, ended December 31,
2008 2007 2008 2007
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Net earnings 4,382 5,913 20,396 21,545
Non-controlling interests 34 34 146 (70)
Income tax expense 1,825 3,783 11,321 8,457
Financing costs 3,836 2,782 13,807 14,685
Financial instruments 49 752 143 (5,491)
Foreign exchange loss
(gain) (834) (73) (1,437) 531
Amortization 6,312 5,484 24,533 21,627
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Consolidated EBITDA 15,604 18,675 68,909 61,284
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To analyze its results, Boralex uses another non-GAAP performance measure,
namely "net earnings excluding specific items." This measure, which may not be
comparable to similarly named measures reported by other companies since it is
a non-GAAP measure, is mainly used to evaluate results excluding specific
items. The measure also makes 2008 results comparable with those of 2007. The
items excluded are those that Boralex deems unlikey to recur in coming years.
The following table reconciles this measure with net earnings according to
GAAP:
For the For the
three-month periods twelve-month periods
ended December 31, ended December 31,
2008 2007 2008 2007
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Net earnings - calculated
according to GAAP 4,382 5,913 20,396 21,545
Cumulative recognition of
Livermore RECs in Q4-2007 - (4,600) - -
Gain on termination of
hedging relationships - - - (5,875)
Taxes - 1,840 - 1,881
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Net earnings excluding
specific items 4,382 3,153 20,396 17,551
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Information by operating segment
For the For the
three-month periods twelve-month periods
ended December 31, ended December 31,
2008 2007 2008 2007
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PRODUCTION (in MWh)
Wind power stations 56,683 60,592 220,500 208,710
Hydroelectric power
stations 34,833 31,887 132,057 106,762
Wood-residue thermal
power stations 295,213 275,059 1,232,907 1,190,265
Natural gas thermal
power stations 15,260 16,219 37,829 38,421
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401,989 383,757 1,623,293 1,544,158
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REVENUE FROM ENERGY SALES
Wind power stations 7,942 8,554 30,543 27,730
Hydroelectric power
stations 2,844 2,524 11,753 9,139
Wood-residue thermal
power stations 37,040 29,973 135,897 111,861
Natural gas thermal
power station 6,490 4,857 19,053 14,609
Corporate and eliminations - (1) - (1)
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54,316 45,907 197,246 163,338
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EBITDA
Wind power stations 6,059 7,021 24,041 22,826
Hydroelectric power
stations 1,647 1,651 7,919 5,435
Wood-residue thermal
power stations 9,064 10,674 40,488 33,052
Natural gas thermal
power station 1,378 717 2,338 2,272
Corporate and eliminations (2,544) (1,388) (5,877) (2,301)
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15,604 18,675 68,909 61,284
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PURCHASE OF PROPERTY,
PLANT AND EQUIPMENT
Wind power stations 9,352 3,250 31,485 16,644
Hydroelectric power
stations 33 355 89 1,172
Wood-residue thermal
power stations 1,291 1,893 8,527 4,233
Natural gas thermal
power station 12 - 81 25
Corporate and eliminations 605 88 4,395 404
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11,293 5,586 44,577 22,478
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As at As at
December 31, December 31,
2008 2007
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ASSETS
Wind power stations 243,374 196,814
Hydroelectric power stations 23,019 12,427
Wood-residue thermal power stations 183,881 130,728
Natural gas thermal power station 17,216 16,132
Corporate and eliminations 156,008 158,630
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623,498 514,731
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