Boralex reports operating income of $7 million and actively pursues its development and diversification activities in the third quarter

Press Release

Montreal, Québec, November 14, 2024 — Boralex Inc. (“Boralex” or the “Company”) (TSX: BLX) is pleased to report its results for the third quarter and nine-month period ended September 30, 2024.

Highlights

Third quarter financial results

• EBITDA(A)¹, operating income and net earnings under pressure in Q3-2024 owing to adverse weather conditions

• Production down 3% (1% on a combined¹ basis)² from Q3-2023; total production 14% (11%) below anticipated production¹ due primarily to adverse wind conditions in Canada and France as well as increased curtailments at certain wind farms.

• EBITDA(A) of $87 million ($109 million on a combined basis) in Q3-2024, down $3 million ($4 million) from Q3-2023, with the decrease in production partially offset by the contribution of newly commissioned sites in France and the positive impact of the electricity selling price optimization strategy.

• Operating income of $7 million ($22 million) in Q3-2024, down $6 million ($6 million) from Q3-2023.

• Net earnings down $7 million from Q3-2023.

• Lower net cash flow related to operating activities for the quarter, balance sheet remains strong

• Net cash outflows related to operating activities of $184 million in Q3-2024 compared to inflows of $1 million in Q3-2023, a decrease attributable to the change in non-cash working capital items following the payment from accounts payable of the inframarginal revenue cap tax and the feed-in premium in France.
• Discretionary cash flows¹ of $16 million in Q3-2024, down $7 million from Q3-2023.
• $288 million of cash and cash equivalents included in the $608 million of available cash resources and authorized financing¹ as at September 30, 2024.

Update on development and construction activities

• Under-construction and ready-to-build projects progressing according to plan

• Ongoing turbine assembly at the Apuiat wind farm in Québec (total 200 MW, Boralex’s share 100 MW) and the Limekiln wind farm in Scotland (106 MW), both scheduled for commissioning later this year.

• Start of construction at the Hagersville (300 MW) and Tilbury (80 MW) storage projects in Ontario, scheduled for commissioning in the fourth quarter of 2025.

• Ongoing development of the Des Neiges Sud wind project in Québec (total 400 MW, Boralex’s share 133 MW) and the Oxford storage project in Ontario (125 MW), both scheduled for commissioning in 2026.

• Acquisition of Sallachy, a 50 MW advanced-stage wind project in the United Kingdom

• 391 MW added to the early-stage project pipeline

• 510 MW in wind, solar, and storage capacity added and modified in North America and Europe.

• 119 MW of non-strategic solar projects removed in Scotland.

• Electricity selling price optimization strategy

• Signing of a 15-year corporate PPA with Nestlé France for a facility commissioned in 2024 and two projects included in the Corporation’s project pipeline.

• Signing of a 20-year corporate PPA with Saint-Gobain for two solar power projects and one wind power project included in the Corporation’s project pipeline.

¹ EBITDA(A) is a total of segment measures. Anticipated production is an additional financial measure. “Combined,” “discretionary cash flows” and “available cash resources and authorized financing” are non-GAAP financial measures and do not have a standardized definition under IFRS. Consequently, 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.

• Figures in brackets indicate results on a combined basis as opposed to a consolidated basis.

“We are pleased to report on the substantial developments within our secured project pipeline. Construction is proceeding apace at our Apuiat and Limekiln wind projects in Québec and Scotland, with commissioning of both projects planned for later this year. We have also commenced construction on our Hagersville and Tilbury storage projects in Ontario, which are scheduled for commissioning at the end of 2025. These developments confirm our teams’ ability to successfully execute projects on time in a variety of geographical settings, which bodes well for future projects. Demand in our target markets remains strong and we are well positioned to meet it. In particular, Hydro-Québec’s plan to rapidly develop 10 GW of projects, the Ontario government’s announcement of a 5 GW competitive energy procurement and the announcement of major initiatives linked to an accelerated energy transition in the United Kingdom represent strong growth potential for the Company,” said Patrick Decostre, President and Chief Executive Officer of Boralex.

“This quarter, Boralex recorded a low level of production owing to adverse weather conditions in both Canada and France. In the past few years we have seen the volatility of the resource in our segment grow from quarter to quarter, which makes it more difficult to plan and manage production without however affecting mid to long term annual production forecasts. The fluctuating weather conditions underscore the need to diversify both geographically, notably in the UK and technologically in order to strengthen the resilience of our business and ensure more stable production. We are also working to optimize our revenues by diversifying our electricity selling price optimization strategy, and on that front we are very proud to announce the signature of two corporate power purchase agreements in France with leading industrial players Nestlé and Saint-Gobain,” Mr. Decostre added.

Finally, Boralex continues to excel on the corporate social responsibility front. In the third quarter, the Company announced that it was one of the few companies in the industry to have had its greenhouse gas emission reduction targets validated by the Science Based Targets initiative (SBTi). This recognition shows Boralex’s commitment to achieve carbon neutrality by 2050.

Three-month periods ended September 30

		Consolidated				Combined
(in millions of Canadian dollars, unless otherwise	2024	2023	Change		2024	2023	Change
specified) (unaudited)			$	%			$	%
Power production (GWh)1	1,081	1,110	(29)	(3)	1,508	1,522	(14)	(1)
Revenues from energy sales and
feed-in premium	150	171	(21)	(12)	175	194	(19)	(10)
Operating income	7	13	(6)	(44)	22	28	(6)	(20)
EBITDA(A)	87	90	(3)	(4)	109	113	(4)	(4)
Net loss	(14)	(7)	(7)	>(100)	(14)	(7)	(7)	>(100)
Net loss attributable to
shareholders of Boralex	(14)	(8)	(6)	(92)	(14)	(8)	(6)	(92)
Per share – basic and diluted	($0.13)	($0.07)	($0.06)	(90)	($0.13)	($0.07)	($0.06)	(88)
Net cash flows related to operating
activities	(184)	1	(185)	>(100)	—	—	—	—
Cash flows from operations2	64	67	(3)	(5)	—	—	—	—
Discretionary cash flows	16	23	(7)	(30)	—	—	—	—

In the third quarter of 2024, Boralex produced 1,081 GWh (1,508 GWh) of electricity, 3% (1%) less than the 1,110 GWh (1,522 GWh) produced in the third quarter of 2023. The decrease was mainly attributable to the weather conditions and power curtailments. As a result, Boralex ended the quarter with total production that was 14% (11%) below anticipated production.

Revenues from energy sales and feed-in premiums for the three-month period ended September 30, 2024, amounted to $150 million ($175 million), 12% (10% on a combined basis) lower than in the third quarter of 2023. The decrease was mainly attributable to the lower production. EBITDA(A)¹ amounted to $87 million ($109 million), down 4% (4%) from the third quarter of 2023. The decline in production was partially offset by the contribution of new assets commissioned in France and to a lesser degree by the positive impact of the electricity selling price optimization strategy. Operating income totalled $7 million ($22 million), compared to $13 million ($28 million) for the same quarter of 2023. The Company posted a net loss of $14 million, a decrease of $7 million compared to the $7 million loss recorded for the same quarter of 2023.

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