Boralex's Resilience: Navigating Weather Challenges and Pursuing Growth

Boralex Inc. (TSX: BLX), a leading renewable energy provider, recently reported its third-quarter financial results, showcasing the company's ability to navigate adverse weather conditions and maintain its growth trajectory. Despite challenging weather patterns, Boralex demonstrated resilience by actively pursuing development and diversification activities, ultimately reporting operating income of $7 million.

Adverse weather conditions in Canada and France significantly impacted Boralex's production and financial performance in Q3 2024. Production was down 3% (1% on a combined basis) from Q3 2023, with total production 14% (11% below anticipated production due to adverse wind conditions and increased curtailments at certain wind farms. This led to a $3 million decrease in EBITDA(A) and a $6 million decrease in operating income compared to Q3 2023. Despite this, Boralex's strategic initiatives, such as the electricity selling price optimization strategy and newly commissioned sites in France, partially offset the production decline.

Boralex's third-quarter results showed a $3 million decrease in EBITDA(A) due to a 3% drop in production. However, this decrease was partially offset by the contribution of newly commissioned sites in France and the positive impact of the electricity selling price optimization strategy. These factors contributed to a $2 million increase in EBITDA(A) compared to the same period last year.

In Q3 2024, Boralex experienced a significant change in net cash flow related to operating activities, with outflows of $184 million compared to inflows of $1 million in the same period last year. This shift can be attributed to the payment of the inframarginal revenue cap tax and the feed-in premium in France, which are non-cash working capital items. These payments led to a decrease in discretionary cash flows, from $16 million in Q3 2023 to $7 million in Q3 2024. Despite this, Boralex maintained a strong balance sheet with $288 million in cash and cash equivalents, representing $608 million of available cash resources and authorized financing.

Boralex's ongoing development and construction activities in Q3 2024 significantly contributed to its growth and diversification efforts. The company made substantial progress on several key projects, including the Apuiat wind farm in Québec (100 MW, Boralex's share) and the Limekiln wind farm in Scotland (106 MW), both scheduled for commissioning later in the year. Additionally, Boralex started construction on the Hagersville (300 MW) and Tilbury (80 MW) storage projects in Ontario, set for commissioning in Q4 2025. These projects, along with the development of the Des Neiges Sud wind project in Québec (133 MW) and the Oxford storage project in Ontario (125 MW), both slated for commissioning in 2026, demonstrate Boralex's commitment to expanding its renewable energy portfolio and diversifying its geographical presence.

In conclusion, Boralex's third-quarter results highlight the company's ability to navigate challenging weather conditions and maintain its growth trajectory. By actively pursuing development and diversification activities, Boralex was able to partially offset the impact of adverse weather conditions on its production and financial performance. The company's strong balance sheet and ongoing projects demonstrate its commitment to long-term growth and sustainability in the renewable energy sector.