Bo­ralex loses $40-mil­lion in Q3

Bo­ralex Inc. lost $40-mil­lion on rev­enue of $79-mil­lion in the third quar­ter of 2018. This com­pares with a loss of $26-mil­lion on rev­enue of $74-mil­lion in Q3 of 2017.

Stockwatch Daily - - FRONT PAGE - Mr. Pa­trick Le­maire re­ports

FOR THE first nine months of 2018, Bo­ralex Inc. had EBITDA(A) (earn­ings be­fore in­ter­est, taxes, de­pre­ci­a­tion and amor­ti­za­tion, ad­justed to in­clude other items) of $200-mil­lion ($233-mil­lion), up 9 per cent (8 per cent) from $183-mil­lion ($215-mil­lion) for the com­par­a­tive pe­riod of 2017. EBITDA(A) for the three-month pe­riod ended Sept. 30, 2018, was com­pa­ra­ble with that of the cor­re­spond­ing quar­ter of 2017, that is, $39-mil­lion ($51-mil­lion in 2018 and $50-mil­lion in 2017). The con­tri­bu­tion of fa­cil­i­ties ac­quired and com­mis­sioned over the past 12 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 U.S. hy­dro­elec­tric power sta­tions and a rise in de­vel­op­ment costs.

“The en­tire Bo­ralex team is hard at work to en­sure con­ti­nu­ity on the path to growth while in­te­grat­ing the most re­cent ac­qui­si­tions and max­i­miz ing syn ergie s in the day-to-day man­age­ment of op­er­a­tions,” stated Pa­trick Le­maire, pres­i­dent and chief ex­ec­u­tive of­fi­cer of Bo­ralex.

“We re­main fo­cused on our strat­egy, which will al­low us to gen­er­ate sub­stan­tial economies of scale in the fu­ture. Re­cently, we suc­cess­fully com­pleted the ac­qui­si­tion of In­ven­ergy’s in­ter­ests in five wind farms in Canada as well as the Kal­lista sites in France. In ad­di­tion to th­ese ac­qui­si­tions, which added nearly 25 per cent to our in­stalled ca­pac­ity since the be­gin­ning of the year, we re­cently com­mis­sioned, on sched­ule, the 33-megawatt In­ter Deux Bos wind farm in France. We also in­tend to com­mis­sion six new fa­cil­i­ties in Canada and France for a to­tal of 97 MW by the end of the year. We’re very proud of th­ese achieve­ments which will un­doubt­edly im­prove our po­si­tion­ing as a lead­ing op­er­a­tor in both Canada and France.”

Bo­ralex gen­er­ated rev­enues from en­ergy sales of $79-mil­lion ($93-mil­lion) in the third quar­ter of 2018, up 6 per cent (9 per cent) com­pared with the same pe­riod in 2017. EBITDA(A) for the quar­ter to­talled $39-mil­lion ($51-mil­lion), which is iden­ti­cal to the re­sult of $39-mil­lion ($50-mil­lion) for the same quar­ter of 2017.

The cor­po­ra­tion re­ported a net loss at­trib­ut­able to share­hold­ers amount­ing to $34-mil­lion ($34-mil­lion) or 43 cents (43 cents) per share (ba­sic and di­luted) for the third quar­ter of 2018, com­pared with a net loss at­trib­ut­able to share­hold­ers of $17-mil­lion ($17-mil­lion) or 23 cents (23 cents) per share (ba­sic and di­luted) for the same pe­riod a year ear­lier.

The in­crease in net loss be­tween the two pe­ri­ods re­sulted pri­mar­ily from a lower pro­duc­tion vol­ume at ex­ist­ing fa­cil­i­ties plus the in­creases of $16-mil­lion in amor­ti­za­tion ex­pense, $1-mil­lion in ac­qui­si­tion costs and $3-mil­lion in fi­nanc­ing costs.

Out­look

Fol­low­ing the re­cent ac­qui­si­tions and the com­mis­sion­ing of In­ter Deux Bos wind farm, the cor­po­ra­tion has sub­stan­tially ex­panded its op­er­at­ing base. The in­stalled ca­pac­ity un­der Bo­ralex’s con­trol has now reached 1,853 MW, up 397 MW or 27 per cent since the be­gin­ning of the year. Tak­ing into ac­count the fa­cil­i­ties to be com­mis­sioned by 2020 as set out in the growth path for a to­tal of 214 MW, Bo­ralex should achieve an in­stalled ca­pac­ity of nearly 2,065 MW at the end of 2020, ex­clud­ing any other op­por­tu­ni­ties that could arise.

To con­tinue on the growth path, Bo­ralex has in par­tic­u­lar a port­fo­lio of po­ten­tial

projects rep­re­sent­ing over 1,000 MW in Eu­rope alone. The cor­po­ra­tion will ac­tively par­tic­i­pate in the ten­der­ing sys­tem, which an­tic­i­pates the award­ing of con­tracts of a cu­mu­la­tive in­stalled ca­pac­ity of on­shore wind power to­talling 3,000 MW by June, 2020, of which 2,400 MW is yet to be awarded, and which will ben­e­fit from 20-year con­tracts.

In light of all the above, man­age­ment main­tains its an­nu­al­ized EBITDA(A) tar­get of $390-mil­lion to $410-mil­lion un­der IFRS ($480-mil­lion to $500-mil­lion on a com­bined ba­sis) at the end of 2020.

We seek Safe Har­bor.

Erika Flo­res con­densed this news re­lease (erikaf@stockwatch.com).

Ger­main Benoit, Alain Ducharme, Marie Giguere, Ed­ward James Ker­naghan, Pa­trick Le­maire, Richard Le­maire, Yves Rheault, Alain Rheaume, Michelle Samson-Doel, Pierre Sec­ca­rec­cia, Dany St-Pierre

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