MONTREAL, Feb. 23 /PRNewswire-FirstCall/ - The 133% increase in the wind power asset portfolio and the acquisition of Boralex Power Income Fund (the "Fund") were the key developments in 2010 for Boralex Inc. ("Boralex" or the "Corporation"), pointing to a good performance in fiscal 2011. These items saw the Corporation record its all-time best fourth-quarter earnings before interest, taxes, depreciation and amortization ("EBITDA").
(in millions of dollars, except per unit amounts)
-------------------------------------------------------------------------
Three-month periods ended Twelve-month periods ended
---------------------------------------------------------
December 31, December 31, December 31, December 31,
2010 2009 2010 2009
Revenues from
energy sales 73.0 46.1 202.9 184.8
EBITDA 30.2 12.0 64.0 57.3
Net earnings 0.5 14.7 23.1 24.4
Per share
(basic and
diluted) $0.01 $0.39 $0.61 $0.65
Cash flows from
operations 13.2 11.3 37.0 47.4
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The integration of the Fund's power stations and the commissioning of over 140 MW of wind power during fiscal 2010 significantly increased the Corporation's annual power generation, totalling 2,044,784 MWh in 2010 compared with 1,574,874 MWh in 2009. This growth was also reflected in revenues from energy sales, which rose to $202.9 million in 2010 from $184.8 million in 2009.
In the fourth quarter of 2010, Boralex finalized the full acquisition of the Fund by executing the business combination agreement for the two entities on November 1, 2010. The swift integration of these assets and their immediate contribution to Boralex's year-end results underscore the complementary nature of these newly combined asset portfolios. Boralex recognized $64.0 million in EBITDA for fiscal 2010-of which $30.2 million was recorded solely in the fourth quarter of 2010-compared with $57.3 million for fiscal 2009. The Fund's assets contributed $15.1 million to EBITDA in the fourth quarter of fiscal 2010. Year over year, EBITDA nearly tripled in the fourth quarter of 2010, lifting Boralex to its best-ever fourth-quarter operating results.
The acquisition of the Fund entailed a host of benefits for Boralex, particularly an increase to 73% of installed capacity covered by long-term contracts from 63%, which will translate into greater stability in profit margins and cash flows. In addition, the acquisition of the Fund had a particularly strong impact on the hydroelectric power segment, whose contribution to Boralex's consolidated revenues rose to 12.9% in 2010 from 5.6% in 2009, while its share of consolidated EBITDA increased to 22.4% in 2010 from 7.4% in 2009-clear signs of the breadth and profitability of the hydroelectric assets acquired from the Fund. The contribution to the Corporation's operating results from this segment, which tripled in size with the acquisition, is expected to generate higher throughout in fiscal 2011.
Fiscal 2010 also saw significant growth in the wind power segment. In 2010, 143.5 MW in new capacity was brought online, more than doubling the segment's installed capacity. The contribution of these new assets will be fully reflected in the Corporation's financial results in fiscal 2011. Another notable event in 2010 was the acquisition by Boralex and its partners of rights for 119 MW in new wind power projects slated for commissioning in 2014 and 2015. The Corporation's fourth-quarter results show how Boralex is reaping the benefits of its expansion strategy in the wind power segment, which notably accounted for the Corporation's largest share of EBITDA in fiscal 2010, totalling $36.3 million in 2010 compared with $26.8 million in 2009.
The Corporation's wood-residue thermal power stations reported revenues from energy sales and EBITDA for fiscal 2010 of $105.4 million and $23.5 million, respectively, compared with $123.4 million and $40.0 million, respectively, for 2009. These declines resulted in part from the adverse impact of the termination of the U.S. tax credits program, lower market prices for electricity, foreign currency fluctuations and a drop in REC prices. The renewal of the power sales contract at the Fort Fairfield power station and the implementation of a new sorting system for old bark piles at the Senneterre power station are expected to have a positive impact in fiscal 2011. "Management remains cautious about the thermal power segment's outlook for 2011, but we're confident the segment has attractive potential over the longer term," stated President and CEO Patrick Lemaire.
For the year ended December 31, 2010, Boralex reported net earnings totalling $23.1 million or $0.61 per share (basic and diluted) compared with $24.4 million or $0.65 per share (basic and diluted) for 2009.
"Boralex is poised to reap the benefits of its new assets in 2011, as operating results reflect the full contribution of the wind power stations commissioned in 2010 and the Fund's power stations. Fiscal 2011 will see the addition of a new operating segment for Boralex with the commissioning in May of its first solar power station, whose construction is proceeding on schedule," added Mr. Lemaire. As a result of the development and acquisition of new assets in 2010, Boralex doubled the installed capacity of its energy portfolio, now totalling 700 MW, in addition to a development project pipeline with partners, exceeding 400 MW. As a result, the strategic goal of 1,000 MW in operation and development has nearly been met.
About Boralex
Boralex is a power producer whose core business involves developing and operating renewable energy power stations with a total installed capacity of 700 MW in Canada, the Northeastern United States and France. Boralex is also committed under power development projects both independently and with European and Canadian partners to add approximately 400 MW of power. With nearly 350 employees, Boralex is known for its diversified expertise and in-depth experience in three power generation segments - wind, hydroelectric and thermal - and will add a fourth segment to its energy portfolio with the upcoming commissioning of its first solar power station. Boralex's shares and convertible debentures are listed on the Toronto Stock Exchange under the ticker symbols BLX and BLX.DB, respectively. More information is available at www.boralex.com or www.sedar.com.
Some statements in this press release, including those 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 general impact of economic conditions, raw material price increases and availability, currency fluctuations, fluctuations in electricity selling prices, the Corporation's financing capacity, and adverse changes in general market and industry conditions, as well as other factors listed in the Corporation's filings with various securities commissions.
The summarized financial statements included in this press release also contain certain financial measures that are not in accordance with Canadian generally accepted accounting principles ("GAAP"). To assess the operating performance of its assets and reporting segments, the Corporation uses earnings before interest, taxes and amortization ("EBITDA") and cash flows from operations as performance measures. These are non-GAAP measures and have no standard definition under GAAP. These measures may be different from similarly-titled measures used by other companies. EBITDA corresponds to "Operating income" as reported in Boralex's consolidated statement of earnings. Cash flows from operations are equal to cash flows related to operating activities before change in working capital as reported in the consolidated statement of cash flows accompanying this press release.
Consolidated Balance Sheets
As at As at
December 31, December 31,
(in thousands of dollars) (unaudited) 2010 2009
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Assets
Current assets
Cash and cash equivalents 92,650 37,821
Restricted cash 15,924 -
Accounts receivable 60,420 39,632
Available-for-sale financial asset 21,508 -
Future income taxes - 422
Inventories 9,179 8,726
Prepaid expenses 2,516 2,537
Fair value of derivative financial instruments 769 -
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202,966 89,138
Investment - 55,446
Property, plant and equipment 810,700 413,539
Energy sales contracts 100,673 49,023
Goodwill 70,721 -
Other long-term assets 47,699 56,621
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1,232,759 663,767
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Liabilities
Current liabilities
Bank loans and advances 195 12,291
Accounts payable and accrued liabilities 58,815 28,913
Income taxes payable 3,209 283
Fair value of derivative financial instruments 183 -
Current portion of long-term debt 34,033 24,273
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96,435 65,760
Long-term debt 479,546 206,116
Convertible debentures 220,824 -
Long-term lease accruals 2,981 -
Future income taxes 47,437 37,185
Fair value of derivative financial instruments 10,834 7,645
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858,057 316,706
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Equity attributable to shareholders
Capital stock 222,853 222,694
Equity component of convertible debentures 19,537 -
Contributed surplus 5,527 4,295
Retained earnings 184,690 159,900
Accumulated other comprehensive loss (66,799) (46,859)
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365,808 340,030
Non-controlling interests 8,894 7,031
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Total equity 374,702 347,061
-------------------------------------------------------------------------
1,232,759 663,767
-------------------------------------------------------------------------
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Consolidated Statements of Earnings
(in thousands of
dollars, except
per share amounts For the For the
and number of three-month periods twelve-month periods
shares) ended December 31, ended December 31,
(unaudited) 2010 2009 2010 2009
-------------------------------------------------------------------------
Revenues from
energy sales 73,036 46,149 202,864 184,779
Renewable energy
tax credits - 3,404 - 13,853
Operating costs 37,448 28,119 115,568 122,100
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35,588 21,434 87,296 76,532
Share in earnings
of the Fund - (5,088) (3,251) (2,090)
Management revenues
from the Fund - 1,789 4,437 5,876
Other income 120 286 718 2,061
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35,708 18,421 89,200 82,379
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Other expenses
Management and
operation of
the Fund - 1,348 3,995 4,789
Development 1,583 1,517 4,214 4,729
Administrative 3,884 3,571 17,025 15,536
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5,467 6,436 25,234 25,054
-------------------------------------------------------------------------
Operating income 30,241 11,985 63,966 57,325
Amortization 16,146 6,675 40,658 26,056
Foreign exchange
loss 2,736 1,271 4,298 1,473
Net loss on
financial
instruments 372 929 247 923
Financing costs 11,026 3,497 24,104 13,727
Net gain on deemed
disposal of
investment in
the Fund 948 - (15,130) -
Gain on sale of
subsidiary - - (774) -
Gain on dilution - (13,865) - (13,865)
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31,228 (1,493) 53,403 28,314
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Earnings (loss)
before income
taxes and non-
controlling
interests (987) 13,478 10,563 29,011
Income taxes
(recovery) (1,923) (1,280) (12,738) 4,470
-------------------------------------------------------------------------
Net earnings
including non-
controlling
interests 936 14,758 23,301 24,541
Non-controlling
interests (478) (46) (201) (102)
-------------------------------------------------------------------------
Net earnings
attributable to
shareholders 458 14,712 23,100 24,439
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Net earnings per
Class A share
(basic and diluted) 0.01 0.39 0.61 0.65
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Weighted average
number of
Class A shares
outstanding
(basic) 37,744,869 37,740,921 37,741,916 37,740,921
Weighted average
number of
Class A shares
outstanding
(diluted) 37,843,347 37,865,365 37,860,092 37,836,411
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Consolidated Statements of Retained Earnings
For the
twelve-month periods
ended December 31,
(in thousands of dollars) (unaudited) 2010 2009
-------------------------------------------------------------------------
Balance - beginning of year 159,900 135,461
Net earnings for the year 23,100 24,439
Excess of purchase price paid for
acquisition of non-controlling interests (1,725) -
Excess of proceeds from partial sale of a
subsidiary 3,415 -
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Balance - end of year 184,690 159,900
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Consolidated Statements of Comprehensive Income (Loss)
For the For the
three-month periods twelve-month periods
(in thousands of ended December 31, ended December 31,
dollars) (unaudited) 2010 2009 2010 2009
-------------------------------------------------------------------------
Net earnings for
the year including
non-controlling
interests 936 14,758 23,301 24,541
-------------------------------------------------------------------------
Other comprehensive
income (loss)
Translation
adjustments
Unrealized foreign
exchange loss on
translation of
financial
statements of
self-sustaining
foreign operations (8,956) (6,056) (15,537) (32,389)
Reclassification
to net earnings
of a realized
foreign exchange
loss related to
the reduction of
net investment in
self-sustaining
foreign operations 1,973 1,141 3,604 1,076
Share of cumulative
translation
adjustments of
the Fund - (101) - (2,174)
Taxes (216) 33 (179) 581
Cash flow hedges
Change in fair value
of financial
instruments 2,821 39 (11,028) 7,140
Hedging items
realized and
recognized in
net earnings (1,100) (3,991) (5,554) (22,608)
Hedging items
realized and
recognized in
balance sheet 804 (271) 5,652 (3,884)
Taxes (629) 651 3,829 4,383
Loss on
available-for-sale
financial asset
Unrealized loss on
available-for-sale
financial asset (727) - (727) -
-------------------------------------------------------------------------
(6,030) (8,555) (19,940) (47,875)
-------------------------------------------------------------------------
Comprehensive income
(loss) for the
year including
non-controlling
interests (5,094) 6,203 3,361 (23,334)
-------------------------------------------------------------------------
Less: Earnings
for the year
attributable to
non-controlling
interest (478) (46) (201) (102)
-------------------------------------------------------------------------
Comprehensive income
(loss) for the year
attributable to
shareholders (5,572) 6,157 3,160 (23,436)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Consolidated Statements of Cash Flows
For the For the
three-month periods twelve-month periods
(in thousands of ended December 31, ended December 31,
dollars) (unaudited) 2010 2009 2010 2009
-------------------------------------------------------------------------
Operating activities
Net earnings 458 14,712 23,100 24,439
Distributions
received from
the Fund - 2,409 4,475 9,638
Adjustments for
non-cash items
Net loss on
financial
instruments 372 719 247 1,253
Share in earnings
of the Fund - 5,088 3,251 2,090
Amortization 16,146 6,675 40,658 26,056
Amortization of
financing costs (250) 719 3,035 2,893
Renewable energy
tax credits 721 (3,165) 1,709 (7,113)
Gain on sale of
subsidiary - - (774) -
Gain on deemed
disposal of
investment in
the Fund - - (21,260) -
Gain on dilution - (16,315) - (16,315)
Imputed interest
on convertible
debentures 325 - 411 -
Future income
taxes (5,347) (51) (20,100) 3,002
Others 753 539 2,198 1,470
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13,178 11,330 36,950 47,413
Change in non-cash
working capital
items 5,998 13,259 5,417 13,373
-------------------------------------------------------------------------
19,176 24,589 42,367 60,786
-------------------------------------------------------------------------
Investing activities
Additions to
property, plant
and equipment (49,171) (24,399) (186,993) (84,532)
Change in
restricted cash 19,098 - (15,924) -
Business acquisitions
- The Fund (32,421) - (71,232) -
- Others - (47,283) (2,142) (53,758)
Proceeds from sale
of a subsidiary - - 878 -
Change in reserve
funds - 150 883 (1,091)
Development projects (1,316) (3,357) (2,046) (10,337)
Purchase of
non-controlling
interest - - (1,751) (968)
Others 530 671 2,736 (6,366)
-------------------------------------------------------------------------
(63,280) (74,218) (275,591) (157,052)
-------------------------------------------------------------------------
Financing activities
Increase (decrease)
in bank loans
and advances 195 (925) (12,096) 12,291
Increase in
long-term debt 3,780 35,158 267,051 68,714
Payments on
long-term debt (6,650) (6,788) (74,407) (27,539)
Net issuance of
convertible
debentures - - 103,945 -
Net proceeds from
share issuance 132 - 132 -
Distributions paid
to unitholders (1,565) - (1,565) -
Increase in
non-controlling
interests - 23,181 5,662 23,181
-------------------------------------------------------------------------
(4,108) 50,626 288,722 76,647
-------------------------------------------------------------------------
Translation
adjustment on
cash and cash
equivalents 130 (814) (669) (11,755)
-------------------------------------------------------------------------
Net change in
cash and cash
equivalents (48,082) 183 54,829 (31,374)
Cash and cash
equivalents -
beginning of year 140,732 37,638 37,821 69,195
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Cash and cash
equivalents -
end of year 92,650 37,821 92,650 37,821
-------------------------------------------------------------------------
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SUPPLEMENTAL INFORMATION
Cash and cash
equivalents paid for:
Interest 10,325 2,526 24,022 9,130
Income taxes 205 - 3,571 1,736
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Segmented Information
(tabular amounts in thousands of dollars, unless otherwise specified)
(unaudited)
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 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,
2010 2009 2010 2009
-------------------------------------------------------------------------
Net earnings
attributable to
shareholders 458 14,712 23,100 24,439
Non-controlling
interests 478 46 201 102
Income taxes
(recovery) (1,923) (1,280) (12,738) 4,470
Gain on dilution - (13,865) - (13,865)
Gain on sale of
subsidiary - - (774) -
Net gain on deemed
disposal of
investment in
the Fund 948 - (15,130) -
Financing costs 11,026 3,497 24,104 13,727
Net loss on
financial
instruments 372 929 247 923
Foreign exchange
loss 2,736 1,271 4,298 1,473
Amortization 16,146 6,675 40,658 26,056
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EBITDA 30,241 11,985 63,966 57,325
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Information by operating segment
For the For the
three-month periods twelve-month periods
ended December 31, ended December 31,
2010 2009 2010 2009
-------------------------------------------------------------------------
PRODUCTION (MWh)
Wind power stations 143,379 79,741 377,392 235,418
Hydroelectric power
stations 220,380 41,017 328,290 145,303
Wood-residue thermal
power stations 310,790 304,399 1,236,930 1,156,652
Natural gas thermal
power stations 71,712 14,859 102,172 37,501
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746,261 440,016 2,044,784 1,574,874
-------------------------------------------------------------------------
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REVENUES FROM ENERGY
SALES
Wind power stations 17,479 10,974 45,924 33,872
Hydroelectric power
stations 18,060 2,948 26,221 10,329
Wood-residue thermal
power stations 24,173 27,031 105,357 123,391
Natural gas thermal
power stations 13,324 5,196 25,362 17,187
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73,036 46,149 202,864 184,779
-------------------------------------------------------------------------
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EBITDA
Wind power stations 14,103 9,085 36,263 26,789
Hydroelectric power
stations 14,401 1,743 18,929 5,538
Wood-residue thermal
power stations 1,904 9,359 23,491 39,995
Natural gas thermal
power stations 4,105 915 6,291 2,155
Corporate and
eliminations (4,272) (9,117) (21,008) (17,152)
-------------------------------------------------------------------------
30,241 11,985 63,966 57,325
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ADDITIONS TO PROPERTY,
PLANT AND EQUIPMENT
Wind power stations 41,625 22,884 175,217 76,761
Hydroelectric power
stations 104 153 2,354 1,184
Wood-residue thermal
power stations 2,599 670 4,990 4,851
Natural gas thermal
power stations (189) - (179) 28
Corporate 5,032 692 4,611 1,708
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49,171 24,399 186,993 84,532
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As at As at
December 31, December 31,
2010 2009
-------------------------------------------------------------------------
TOTAL ASSETS
Wind power stations 538,604 363,644
Hydroelectric power stations 264,481 34,622
Wood-residue thermal power stations 213,842 138,014
Natural gas thermal power stations 40,561 13,600
Corporate 175,271 113,887
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1,232,759 663,767
-------------------------------------------------------------------------
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PROPERTY, PLANT AND EQUIPMENT
Wind power stations 420,675 288,225
Hydroelectric power stations 198,331 25,758
Wood-residue thermal power stations 159,629 84,660
Natural gas thermal power stations 20,834 7,150
Corporate 11,231 7,746
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810,700 413,539
-------------------------------------------------------------------------
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Information by geographic segment
For the For the
three-month periods twelve-month periods
ended December 31, ended December 31,
2010 2009 2010 2009
-------------------------------------------------------------------------
PRODUCTION (MWh)
United States 396,780 336,223 1,393,618 1,274,837
France 107,628 88,972 295,141 267,291
Canada 241,853 14,821 356,025 32,746
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746,261 440,016 2,044,784 1,574,874
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REVENUES FROM ENERGY
SALES
United States 30,969 28,890 116,726 130,780
France 16,883 15,667 47,548 50,556
Canada 25,184 1,592 38,590 3,443
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73,036 46,149 202,864 184,779
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-------------------------------------------------------------------------
EBITDA
United States 11,328 9,891 34,970 43,043
France 9,237 8,202 23,389 24,364
Canada 9,676 (6,108) 5,607 (10,082)
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30,241 11,985 63,966 57,325
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ADDITIONS TO PROPERTY,
PLANT AND EQUIPMENT
United States 656 664 3,775 4,735
France 13,684 7,564 76,141 10,710
Canada 34,831 16,171 107,077 69,087
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49,171 24,399 186,993 84,532
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As at As at
December 31, December 31,
2010 2009
-------------------------------------------------------------------------
TOTAL ASSETS
United States 284,926 179,494
France 310,161 254,142
Canada 637,672 230,131
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1,232,759 663,767
-------------------------------------------------------------------------
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PROPERTY, PLANT AND EQUIPMENT
United States 174,054 89,889
France 224,647 190,797
Canada 411,999 132,853
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810,700 413,539
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SOURCE BORALEX INC.
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