Release Date: May 14, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Boralex Inc (BRLXF, Financial) successfully commissioned the Limekiln wind farm in Scotland, marking its first operating asset in the United Kingdom, which is a promising market for the company.
- The company has over 3.2 gigawatts of assets in operation and 660 megawatts of projects in construction and ready-to-build phases, with commercial operations planned for 2025 and 2026.
- Boralex Inc (BRLXF) is making strong progress on its growth and diversification strategies, particularly in Canada and the UK, with several projects under construction.
- The company has a robust pipeline of nearly 7.1 gigawatts of wind, solar, and storage projects in early, mid, and advanced stages.
- Boralex Inc (BRLXF) maintains a solid balance sheet with $504 million in available cash resources and authorized financing, providing financial flexibility to support growth.
Negative Points
- Total combined production was down 1% compared to the same quarter last year and 11% lower than anticipated due to unfavorable weather conditions in France.
- EBITDA decreased by $19 million compared to Q1 2024, primarily due to lower wind resources in France and less favorable power prices in short-term contracts.
- The Apuiat project in Canada experienced higher costs due to difficulties with the BOP supplier contractor and adverse winter conditions, leading to cost overruns.
- Ongoing uncertainty in the United States regarding potential policy changes and tariffs has led to economic volatility, impacting near-term operations.
- Some advanced stage projects were discontinued due to delays in obtaining authorizations and mismatches between available and permitted turbine sizes, affecting the project pipeline.
Q & A Highlights
Q: Can you explain the cost increases at the Apuiat project and how you feel about costs for the rest of your construction pipeline?
A: The cost increases at Apuiat were driven by difficulties with the BOP supplier contractor, which delayed the project during winter, leading to higher costs. We also faced a tough winter in Quebec. For other projects, such as Hagersville and Tilbury, costs are on track, and we do not expect increases. We have optimized our processes to mitigate future risks.
Q: How do you view the proposed Texas legislation requiring backup generation for renewable projects, and what are your contingency plans?
A: We are monitoring the situation closely. The industry is making representations to mitigate the impact. The legislation would start in 2027, and we are assessing its potential effects on our projects.
Q: Can you provide more details on the discontinuation of some advanced-stage projects?
A: Some projects were discontinued due to long delays in obtaining authorizations in France, difficulties with leases, and mismatches between available and permitted turbine sizes. These factors led to the projects not meeting our investment criteria.
Q: What is the status of your solar projects in New York, and how do you plan to handle potential changes in tariffs or domestic content requirements?
A: We are waiting for NYSERDA's final announcement. We have safe-harbored some equipment to mitigate risks. We are also working on securing local supply chains for solar panels and preparing for potential changes in legislation.
Q: How are you addressing supply chain challenges, particularly for solar panels and turbines?
A: The main challenges are with transformers and circuit breakers due to global investment in transmission systems. We are working closely with suppliers to manage these issues. For solar panels, we are seeing increased demand for domestic production in the US, and we are aligning our supply chain accordingly.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
