Release Date: February 28, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Boralex Inc (BRLXF, Financial) closed a record CAD1.2 billion in long-term financing, enhancing financial flexibility.
- The company successfully connected its Limekiln project in Scotland to the grid, marking a significant milestone.
- Boralex Inc (BRLXF) expanded its development portfolio to over 8 gigawatts, a 1.2 gigawatt increase over 2023.
- The company is well-positioned in high-growth markets like Quebec and Ontario, with strong local expertise and partnerships.
- Boralex Inc (BRLXF) announced a share buyback program, indicating confidence in the company's undervalued stock price.
Negative Points
- Combined production for fiscal year 2024 was 2% lower than in 2023 and 8% below anticipated production due to unfavorable weather conditions.
- Financial performance in 2024 was below expectations, with combined EBITDA down 1% from 2023.
- The Apuiat project in Quebec faced construction delays due to harsh winter conditions, impacting timelines.
- Total combined production in the fourth quarter was down 11% compared to the same quarter last year.
- Boralex Inc (BRLXF) has not yet found appropriate M&A targets to meet its 2025 capacity objectives, impacting growth projections.
Q & A Highlights
Q: How does recent private equity activity in Quebec impact Boralex's view of the competitive landscape and future investment opportunities in the province?
A: Patrick Decostre, President and CEO, stated that the recent transactions provide Hydro-Quebec with more independence, as they are no longer shareholders of a competitor. The demand in Quebec is significant, and Hydro-Quebec needs all players to realize its plans. Boralex is well-positioned due to its experience with large wind projects in partnership with Hydro-Quebec and Énergir.
Q: What are the best opportunities for asset recycling in Boralex's portfolio?
A: Bruno Guilmette, CFO, mentioned that Boralex is considering selling its hydro assets due to favorable valuations. The company is also looking at partial sell-downs of other assets where value has been created, similar to previous successful transactions in France.
Q: How comfortable is Boralex with its current liquidity and funding position relative to its development pipeline and share buyback ambitions?
A: Bruno Guilmette, CFO, expressed confidence in Boralex's financial flexibility, with over $523 million in financial availability. The company is comfortable with its ability to fund growth over the next 12 to 24 months, excluding unpredictable M&A activities.
Q: Can you expand on the construction issues and delays faced with the Apuiat project, and how will Des Neiges benefit from these learnings?
A: Patrick Decostre, President and CEO, explained that delays were due to issues with a contractor and harsh winter conditions. Boralex has reinforced project management and controls, which will benefit future projects like Des Neiges.
Q: What is the status of Boralex's pursuit of an investment-grade credit rating, and has the delay impacted any financial objectives?
A: Bruno Guilmette, CFO, stated that the pursuit of a credit rating has been delayed as it was constraining growth and capital allocation. Boralex has not seen limitations in financing without the rating and continues to secure favorable terms for its projects.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
