Boralex vigorously pursues its growth and diversification strategy in the second quarter

Highlights

• 89% growth in consolidated operating income and 15% growth in EBITDA(A)¹ in the second quarter of 2022
  • Operating income of $45 million ($53 million)² for Q2-2022, up 89% (61%) from $24 million ($33 million) in 2021.
  • EBITDA(A) of $121 million ($133 million) for Q2-2022, up 15% (14%) from $106 million ($117 million) in 2021.
  • Increases mainly attributable to high electricity sales prices on certain feed-in premium contracts in France for which a legislative project to share with the French State the revenues generated beyond the contract prices is under discussion in Parliament
• 177 MW of wind and solar projects and 26 MW of storage projects added to the project portfolio
  • Commissioning of 3 wind farms adding 31 MW of capacity in France.
  • 22 MW of wind projects and 49 MW of solar projects added from organic growth.
  • 82 MW of wind projects, 24 MW of solar projects and 26 MW of storage projects added from the Infinergy acquisition in the United Kingdom on July 4.
• 540 MW of solar projects and 77 MW of storage selected in the New York State call for tender
• Capital structure optimization and increase in sales volume at market price
  • Early repayment of a $98 million project loan, of the $272 million used on the corporate credit facility, and of the $34 million US note (US$27 million). Favorable annualized effect of $19 million on discretionary cash flow.
  • Boralex has more than $900 million in available cash and authorized financing⁴ to continue implementing its plan for growth.
  • Early termination of 3 power purchase agreements representing a total of 58 MW at the end of July. The electricity will be sold on the market from the effective date of termination.
• Increase in cash flows
  • Cash flow from operations⁴ of $86 million for Q2-2022, up $20 million from Q2-2021.
  • Net cash flow related to operating activities of $97 million for Q2-2022, up $13 million from Q2-2021.
  • Discretionary cash flow⁴ of $13 million, a $20 million improvement from Q2-2021.
• Production 2% (2%) lower than in Q2-2021 and 6% (6%) below anticipated production³
  • Wind: down 5% (5%) from Q2-2021 and 6% (5%) below anticipated production.
  • Hydroelectric: 20% higher than in Q2-2021 and 8% below anticipated production.
  • Solar: in line with Q2-2021, and 4% below anticipated production.

MONTREAL, Aug. 03, 2022 (GLOBE NEWSWIRE) -- Boralex Inc. (“Boralex” or the “Company”) (TSX: BLX) is pleased to report an increase in operating income and continued progress on certain development projects during the second quarter of 2022.

“For a second consecutive quarter, we made significant progress in our growth strategy by advancing several ongoing projects and adding new projects to our portfolio, now representing nearly 4 GW of power. New York State selected Boralex for 540 MW of solar projects and 77 MW of storage projects. In addition, we have 177 MW of wind and solar projects from the Infinergy acquisition in the United Kingdom and organic growth,” said Patrick Decostre, Boralex’s President and Chief Executive Officer.

¹ EBITDA(A) is a total of sector measures. For more details, see the Non-IFRS financial measures section in this press release.
² The figures in brackets indicated the results according to the Combined⁵, compared to those obtained according to the Consolidated.
³ Anticipated Production is an additional financial measures. For more details, see the Non-IFRS financial measures and other financial measures section of this press release.
⁴ Combined, Cash Flow from operations, Discretionary Cash Flows and Available cash and authorized financing are non-GAAP financial measures and do not have a standardized definition under IFRS. Therefore, these measures may not be comparable to similar measures used by other companies. For more details, see the Non-IFRS financial measures and other financial measures section of this press release.

“As mentioned in the previous quarter, several European countries have been grappling with significant supply challenges and high electricity prices. France is also dealing with historically low nuclear power generation levels, which is widening the price gap with neighboring European countries. Land-based solar and wind farms can be commissioned quickly and at low cost in these markets. We are increasing our efforts and discussions with the various levels of government to accelerate our development and offer sustainable renewable energy supply solutions in the affected regions and those targeted for our growth in Europe. However, this acceleration must be done in a win-win setting for the countries and producers who invest while inflationary conditions result in a higher level of overall risk.” added Mr. Decostre.

2^nd quarter highlights

Three-month periods ended June 30

	Consolidated							Combined1
(in millions of Canadian dollars, unless otherwise specified) (unaudited)	2022	2021		Change				2022	2021		Change
				$		%					$		%
Power production (GWh)2	1,298	1,323		(25	)	(2	)	1,452	1,485		(33	)	(2	)
Revenues from energy sales and feed-in premium	168	147		21		14		185	164		21		12
Operating Income	45	24		21		89		53	33		20		61
EBITDA(A)3	121	106		15		15		133	117		16		14
Net earnings (loss)	14	(12	)	26		>100		14	(12	)	26		>100
Net earnings attributable to shareholders of Boralex	10	(16	)	26		>100		10	(16	)	26		>100
Per share - basic and diluted	$0.10	($0.16	)	$0.26		>100		$0.10	($0.16	)	$0.26		>100
Net cash flows related to operating activities	97	84		13		16		—	—		—		—
Cash flows from operations1	86	66		20		32		—	—		—		—
Discretionary cash flows1	13	(7	)	20		>100		—	—		—		—

In the second quarter of 2022, Boralex produced 1,298 GWh (1,452 GWh) of power, down 2% (2%) compared to the 1,323 GWh (1,485 GWh) produced in the same quarter of 2021. For the three-month period ended June 30, 2022, revenues from energy sales and feed-in premiums were $168 million ($185 million), up 14% (12%) from Q2-2021, while EBITDA(A) reached $121 million ($133 million), up 15% (14%) from Q2-2021, and operating income was $45 million ($53 million), up 89% (61%) from the same quarter in 2021.

The decrease in production was due to unfavourable wind conditions in France. The increase in income, EBITDA(A) and operating income mainly stems from higher energy sales income for sites benefiting from the feed-in premium due to high market prices in France. The commissioning of new wind and solar farms and increased revenues from power plants selling at market prices also explain part of the increase.

Note that a legislative proposal regarding additional compensation contracts, which provides for revenue sharing between the French government and producers based on a threshold price to be determined annually by ministerial order, is currently under parliamentary review. As a result, the Company may be required to repay a portion of the amounts collected in 2022 if the legislation is passed retroactively.

For the three months ended June 30, 2022, Boralex posted net earnings of $14 million ($14 million) compared to net loss of $12 million ($12 million) for the corresponding period in 2021. The net earnings attributable to Boralex shareholders were $10 million ($10 million) or $0.10 ($0.10) per share (basic and diluted), compared to a net loss of $16 million ($16 million) or $0.16 ($0.16) per share (basic and diluted) for the corresponding period in 2021. The increase in net earnings is attributable to the increase in operating income.

Six-month periods ended June 30

	Consolidated						Combined1
(in millions of Canadian dollars, unless otherwise specified)	2022	2021	Change				2022	2021	Change
			$		%				$		%
Power production (GWh)2	2,979	2,952	27		1		3,327	3,315	12		—
Revenues from energy sales and feed-in premium	395	353	42		12		433	392	41		10
Operating Income	136	102	34		35		158	124	34		28
EBITDA(A)3	294	257	37		15		316	279	37		13
Net earnings	71	28	43		>100		71	32	39		>100
Net earnings attributable to shareholders of Boralex	60	20	40		>100		60	24	36		>100
Per share - basic and diluted	$0.59	$0.18	$0.41		>100		$0.59	$0.23	$0.36		>100
Net cash flows related to operating activities	234	217	17		8		—	—	—		—
Cash flows from operations1	222	181	41		23		—	—	—		—
	As at June 30	As at Dec. 31	Change				As at June 30	As at Dec. 31	Change
			$		%				$		%
Total assets	6,305	5,751	554		10		6,685	6,162	523		8
Debt - principal balance	3,256	3,682	(426	)	(12	)	3,593	4,030	(437	)	(11	)
Total project debt	2,956	3,141	(185)		(6)		3,293	3,489	(196	)	(6)
Total corporate debt	300	541	(241	)	(45	)	300	541	(241	)	(45	)

For the six-month period ended June 30, 2022, Boralex produced 2,979 GWh (3,327 GWh) of power, up 1% (stable) compared to the 2,952 GWh (3,315 GWh) produced in the same period in 2021. For the six-month period ended June 30, 2022, revenues from energy sales and feed-in premiums amounted to $395 million ($433 million), up $42 million ($41 million) or 12% (10%) from the same period in 2021, while EBITDA(A) was $294 million ($316 million), $37 million ($37 million) or 15% (13%) higher than the same period last year. Operating income totalled $136 million ($158 million), up $34 million ($34 million) over the same period in 2021. The increase in income, EBITDA(A) and operating income mainly stems from higher energy sales for sites benefiting from the feed-in premium due to high market prices in France. The commissioning of new wind and solar farms and increased revenues from power plants selling at market prices also explain part of the increase.

As mentioned in the quarterly results section, a legislative proposal regarding additional compensation contracts, which provides for revenue sharing between the French government and producers based on a threshold price to be determined annually by ministerial order, is currently under parliamentary review. As a result, the Company may be required to repay a portion of the amounts collected in 2022 if the legislation is passed retroactively.

Overall, for the six-month period ended June 30, 2022, Boralex posted net earnings of $71 million ($71 million) compared to net earnings of $28 million ($32 million) for the corresponding period in 2021. The net earnings attributable to Boralex shareholders were $60 million ($60 million) or $0.59 (0.59 $) per share (base and diluted), compared to $20 million ($24 million) or $0.18 ($0.23) per share (base and diluted) for the same period in 2021. This increase is mainly due to an increase in operating income.

Outlook

On June 17, 2021, Boralex's management unveiled an updated strategic plan that will guide efforts to achieve its new corporate targets for 2025. Boralex's 2025 Strategic Plan is built around the four strategic directions of the plan launched in 2019—growth, diversification, customers and optimization—and six corporate targets. The details of this plan, which also incorporates Boralex’s CSR strategy, are included in the Corporation’s annual report.

Highlights of the main achievements of the quarter ended June 30, 2022 in relation to the 2025 Strategic Plan can be found in the 2022 Interim Report 2 available in the Investors section of Boralex's website.

In the coming quarters, Boralex will continue to work on its various initiatives under this plan, including project development and the analysis of acquisition targets, and the optimization of power sales contract management.

¹ Combined, Cash Flow from operations and Discretionary Cash Flows are non-GAAP financial measures and do not have a standardized definition under IFRS. Therefore, these measures may not be comparable to similar measures used by other companies. For more details, see the Non-IFRS financial measures and other financial measures section of this press release.
² Power production includes the production for which Boralex received financial compensation following power generation limitations imposed by its clients since management uses this measure to evaluate the Corporation’s performance. This adjustment facilitates the correlation between power production and revenues from energy sales and feed-in premium.
³ EBITDA(A) is a total of sector measures. For more details, see the Non-IFRS financial measures and other financial measures section of this press release.

To pursue its organic growth, the Corporation has a pipeline of projects at various stages of development defined on the basis of clearly identified criteria, totalling 3,889 MW in wind and solar projects and 203 MW in energy storage projects, as well as a 706 MW Growth Path in wind and solar projects and 3 MW in storage projects.

Dividend declaration

The Company’s Board of Directors has authorized and announced a quarterly dividend of $0.1650 per common share. This dividend will be paid on September 16, 2022, to shareholders of record at the close of business on August 31, 2022. Boralex designates this dividend as an “eligible dividend” pursuant to paragraph 89(14) of the Income Tax Act (Canada) and all provincial legislation applicable to eligible dividends.

About Boralex

At Boralex, we have been providing affordable renewable energy accessible to everyone for over 30 years. As a leader in the Canadian market and France’s largest independent producer of onshore wind power, we also have facilities in the United States and development projects in the United Kingdom. Over the past five years, our installed capacity has more than doubled to 2.5 GW. We are developing a portfolio of close to 4 GW in wind and solar projects and over 200 MW in storage projects, guided by our values and our corporate social responsibility (CSR) approach. Through profitable and sustainable growth, Boralex is actively participating in the fight against global warming. Thanks to our fearlessness, our discipline, our expertise and our diversity, we continue to be an industry leader. Boralex’s shares are listed on the Toronto Stock Exchange under the ticker symbol BLX.

For more information, go to www.boralex.com or www.sedar.com. Follow us on Facebook, LinkedIn and Twitter.

Non-IFRS measures

Performance measures

In order to assess the performance of its assets and reporting segments, Boralex uses performance measures. Management believes that these measures are widely accepted financial indicators used by investors to assess the operational performance of a company and its ability to generate cash through operations. The non-IFRS and other financial measures also provide investors with insight into the Corporation’s decision making as the Corporation uses these non-IFRS financial measures to make financial, strategic and operating decisions. The non-IFRS and other financial measures should not be considered as a substitute for IFRS measures.

These non-IFRS financial measures are derived primarily from the audited consolidated financial statements, but do not have a standardized meaning under IFRS; accordingly, they may not be comparable to similarly named measures used by other companies. Non-IFRS and other financial measures are not audited. They have important limitations as analytical tools and investors are cautioned not to consider them in isolation or place undue reliance on ratios or percentages calculated using these non-IFRS financial measures.

Non-IFRS financial measures
Specific financial measure	Use	Composition	Most directly comparable IFRS measure
Financial data - Combined (all disclosed financial data)	To assess the operating performance and the ability of a company to generate cash from its operations. The Interests represent significant investments by Boralex.	Results from the combination of the financial information of Boralex Inc. under IFRS and the share of the financial information of the Interests. Interests in the Joint Ventures and associates, Share in earnings (losses) of the Joint Ventures and associates and Distributions received from the Joint Ventures and associates are then replaced with Boralex’s respective share (ranging from 50% to 59.96%) in the financial statements of the Interests (revenues, expenses, assets, liabilities, etc.)	Respective financial data - Consolidated
Cash flows from operations	To assess the cash generated by the Company's operations and its ability to finance its expansion from these funds.	Net cash flows related to operating activities before changes in non-cash items related to operating activities.	Net cash flows related to operating activities
Discretionary cash flows	To assess the cash generated from operations and the amount available for future development or to be paid as dividends to common shareholders while preserving the long- term value of the business. Corporate objectives for 2025from the strategic plan.	Net cash flows related to operating activities before "change in non-cash items related to operating activities,” less (i) distributions paid to non-controlling shareholders, (ii) additions to property, plant and equipment (maintenance of operations), (iii) repayments on non-current debt (projects) and repayments to tax equity investors; (iv) principal payments related to lease liabilities; (v) adjustments for non-operational items; plus (vi) development costs (from the statement of earnings).	Net cash flows related to operating activities

Non-IFRS financial measures
Specific financial measure	Use	Composition	Most directly comparable IFRS measure
Available cash and cash equivalents	To assess the cash and cash equivalents available, as at balance sheet date, to fund the Corporation's growth.	Represents cash and cash equivalents, as stated on the balance sheet, from which known short-term cash requirements are excluded.	Cash and cash equivalents
Available cash resources and authorized financing facilities	To assess the total cash resources available, as at balance sheet date, to fund the Corporation's growth.	Results from the combination of credit facilities available to fund growth and the available cash and cash equivalents.	Cash and cash equivalents

Other financial measures - Total of segments measure
Specific financial measure	Most directly comparable IFRS measure
EBITDA(A)	Operating income

Other financial measures - Supplementary Financial Measures
Specific financial measure	Composition
Anticipated production	Production that the Company anticipates for the oldest sites based on adjusted historical averages, commissioning and planned shutdowns and, for other sites, based on the production studies carried out.
Credit facilities available for growth	The credit facilities available for growth include the unused tranche of the parent company's credit facility, apart from the accordion clause, as well as the unused tranche of the construction facility.

Combined

The following tables reconcile Consolidated financial data with data presented on a Combined basis:

	2022			2021
(in millions of Canadian dollars) (unaudited)	Consolidated	Reconciliation(1)	Combined	Consolidated		Reconciliation(1)	Combined
Three-month periods ended June 30:
Power production (GWh)(2)	1,298	154	1,452	1,323		162	1,485
Revenues from energy sales and feed-in premium	168	17	185	147		17	164
Operating Income	45	8	53	24		9	33
EBITDA(A)	121	12	133	106		11	117
Net earnings	14	—	14	(12	)	—	(12	)

Six-month periods ended June 30:
Power production (GWh)(2)	2,979	348	3,327	2,952	363	3,315
Revenues from energy sales and feed-in premium	395	38	433	353	39	392
Operating Income	136	37	158	102	22	124
EBITDA(A)	294	22	316	257	22	279
Net earnings	71	—	71	28	4	32

	As at June 30, 2022			As at December 31, 2021
Total assets	6,305	380	6,685	5,751	411	6,162
Debt - Principal balance	3,256	337	3,593	3,682	348	4,030

(1)	Includes the respective contribution of Joint Ventures and associates as a percentage of Boralex's interest less adjustments to reverse recognition of these interests under IFRS.
(2)	Includes financial compensation following electricity production limitations imposed by clients.

EBITDA(A)

EBITDA(A) is a total of segment financial measures and represents earnings before interest, taxes, depreciation and amortization, adjusted to exclude other items such as acquisition costs, other loss (gains), net loss (gain) on financial instruments and foreign exchange loss (gain), the last two items being included under Other.

Management uses EBITDA(A) to assess the performance of the Corporation's reporting segments.

EBITDA(A) is reconciled to the most comparable IFRS measure, namely, operating income, in the following table:

	2022						2021						Variation 2022 vs 2021
(in millions of Canadian dollars) (unaudited)	Consolidated		Reconciliation(1)		Combined		Consolidated		Reconciliation(1)		Combined		Consolidated		Combined
Three-month periods ended June 30:
Operating income	45		8		53		24		9		33		21		20
Amortization	72		6		78		73		5		78		(1	)	—
Impairment	2		1		3		1		—		1		1		2
Share in earnings of Joint Ventures and Associates	10		(10	)	—		(1	)	1		—		11		—
Change in fair value of a derivative included in the share of the Joint Ventures	(8	)	8		—		4		(4	)	—		(12	)	—
Other gains	—		(1	)	(1	)	5		—		5		(5	)	(6	)
EBITDA(A)	121		12		133		106		11		117		15		16
Six-month periods ended June 30:
Operating income	136		22		158		102		22		124		34		34
Amortization	144		12		156		148		10		158		(4	)	(2	)
Impairment	3		1		4		2		—		2		1		2
Share in earnings of Joint Ventures and Associates	34		(34	)	—		9		(9	)	—		25		—
Excess of the interest over the net assets of Joint Venture SDB I	—		—		—		6		(6	)	—		(6	)	—
Change in fair value of a derivative included in the share of the Joint Ventures	(23	)	23		—		(5	)	5		—		(18	)	—
Other gains	—		(2	)	(2	)	(5	)	—		(5	)	5		3
EBITDA(A)	294		22		316		257		22		279		37		37

(1)	Includes the respective contribution of Joint Ventures and associates as a percentage of Boralex's interest less adjustments to reverse recognition of these interests under IFRS.

Cash flow from operations and discretionary cash flows

The Corporation computes the cash flow from operations and discretionary cash flows as follows:     

	Consolidated
	Three-month periods ended				Three-month periods ended
(in millions of Canadian dollars) (unaudited)	June 30, 2022		June 30, 2021		June 30, 2022		December 31, 2021
Net cash flows related to operating activities	97		84		362		345
Changes in non-cash operating items	(11	)	(18	)	42		18
Cash flows from operations	86		66		404		363
Repayments on non-current debt (projects)(1)	(69	)	(72	)	(218	)	(222	)
Adjustment for non-operating items(2)	4		2		6		8
	21		(4	)	192		149
Principal payments related to lease liabilities	(3	)	(2	)	(16	)	(13	)
Distributions paid to non-controlling shareholders	(10	)	(6	)	(23	)	(20	)
Additions to property, plant and equipment (maintenance of operations)	(3	)	(1	)	(12	)	(8	)
Development costs (from statement of earnings)	8		6		28		24
Discretionary cash flows	13		(7	)	169		132

(1)

Excluding VAT bridge financing and early debt repayments.

(2)

For the three-month period ended June 30, 2022, favourable adjustment of $4 million consisting mainly of transactions and acquisition costs. For the twelve-month period ended June 30, 2022, favourable adjustment of $6 million consisting mainly of transactions and acquisition costs. For the twelve-month period ended December 31, 2021, favourable adjustment of $8 million consisting of $5 million of expense payments and assumed liabilities related to acquisitions as well as $3 million for previous financing arrangements or amount not related to operating sites.

Available cash and cash equivalents and available cash resources and authorized credit facilities

The Corporation defines available cash and cash equivalents as well as available cash and authorized financing facilities as follows:

	Consolidated
	As at June 30		As at December 31
(in millions of Canadian dollars) (unaudited)	2022		2021
Cash and cash equivalents	701		256
Cash and cash equivalents earmarked for known short-term requirements	(280	)	(220	)
Available cash and cash equivalents	421		61
Credit facilities available to fund growth	500		339
Available cash resources and authorized financing facilities	921		400

Disclaimer regarding forward-looking statements

Certain statements contained in this release, including those related to results and performance for future periods, installed capacity targets, EBITDA(A) and discretionary cash flows, the Company’s strategic plan, business model and growth strategy, organic growth and growth through mergers and acquisitions, obtaining an investment grade credit rating, payment of a quarterly dividend, the Company’s financial targets, the partnership with Énergir and Hydro-Québec for the elaboration of three 400 MW projects for which the development will depend on Hydro-Québec's changing needs, the portfolio of renewable energy projects, the Company’s Growth Path and its Corporate Social Responsibility (CSR) objectives are forward-looking statements based on current forecasts, as defined by securities legislation. Positive or negative verbs such as “will,” “would,” “forecast,” “anticipate,” “expect,” “plan,” “project,” “continue,” “intend,” “assess,” “estimate” or “believe,” or expressions such as “toward,” “about,” “approximately,” “to be of the opinion,” “potential” or similar words or the negative thereof or other comparable terminology, are used to identify such statements.

Forward-looking statements are based on major assumptions, including those about the Company’s return on its projects, as projected by management with respect to wind and other factors, opportunities that may be available in the various sectors targeted for growth or diversification, assumptions made about EBITDA(A) margins, assumptions made about the sector realities and general economic conditions, competition, exchange rates as well as the availability of funding and partners. While the Company considers these factors and assumptions to be reasonable, based on the information currently available to the Company, they may prove to be inaccurate.

Boralex wishes to clarify that, by their very nature, forward-looking statements involve risks and uncertainties, and that its results, or the measures it adopts, could be significantly different from those indicated or underlying those statements, or could affect the degree to which a given forward-looking statement is achieved. The main factors that may result in any significant discrepancy between the Company’s actual results and the forward-looking financial information or expectations expressed in forward-looking statements include the general impact of economic conditions, fluctuations in various currencies, fluctuations in energy prices, the Company’s financing capacity, competition, changes in general market conditions, industry regulations and amendments thereto, litigation and other regulatory issues related to projects in operation or under development, as well as other factors listed in the Company’s filings with the various securities commissions.

Unless otherwise specified by the Company, forward-looking statements do not take into account the effect that transactions, non-recurring items or other exceptional items announced or occurring after such statements have been made may have on the Company’s activities. There is no guarantee that the results, performance or accomplishments, as expressed or implied in the forward-looking statements, will materialize. Readers are therefore urged not to rely unduly on these forward-looking statements.

Unless required by applicable securities legislation, Boralex’s management assumes no obligation to update or revise forward-looking statements in light of new information, future events or other changes.

Percentage figures are calculated in thousands of dollars.

For more information:
Media	Investor Relations
Camille Laventure	Stéphane Milot
Advisor, Digital Communications	Senior Director, Investor Relations
Boralex Inc.	Boralex Inc.
438-883-8580	514 213-1045
[e-mail]	[e-mail]
Source: Boralex Inc.