BLX Boralex Inc

Boralex Inc. (“Boralex” or the “Company”) (TSX: BLX) is pleased to report increased earnings, significant progress on certain projects under construction or at the ready-to-build stage, and the addition of new projects to its pipeline in the third quarter of 2023.

“The increase in earnings for the quarter is mainly attributable to the contribution of the wind assets acquired in the United States for the North American sector and the wind and solar farms commissioned in France for the European sector. The European sector also benefited from favorable production for comparable wind assets. These elements more than offset the pressure on earnings from particularly unfavourable wind conditions in Canada,” said Patrick Decostre, President and Chief Executive Officer of Boralex. “The third quarter was also marked by the progress made on three major projects under construction or at the ready-to-build stage: the Apuiat wind farm in Quebec, the two storage projects in Ontario and the Limekiln wind farm in Scotland. Those projects have high expected returns surpassing our threshold and are progressing on schedule.”

Commenting on what lies ahead for Boralex in the coming quarters, Mr. Decostre added: "We remain very confident in the future of our industry and our ability to grow our business in our target markets, where demand is stronger than ever, thanks in particular to governments' commitment to reducing their carbon footprint and the competitiveness of renewable energies over other forms of energy production. Our discipline and agility have enabled us to adapt quickly to the challenges faced by the industry as a whole in recent months. We are still adding many projects to our pipeline and they are maintaining high returns, with the prices of the most recent power purchase agreements significantly up and reflecting the current supply situation and financing costs.”

1		EBITDA(A) is a total of segment measures.For more details, see the Non-IFRS and other financial measures section of this press release.
2		Combined, Cash Flow from operations, Discretionary Cash Flows and available cash resources and authorized financing facilities are non-GAAP financial measures and do not have a standardized definition under IFRS. Therefore, 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.
3		Figures in brackets indicate results on a Combined basis as opposed to a Consolidated basis.

3rd quarter highlights

Three-month periods ended September 30

	Consolidated									Combined 1
(in millions of Canadian dollars, unless otherwise specified) (unaudited)		2023		2022		Change				2023		2022		Change
						$		%						$		%
Power production (GWh)2		1,110		1,019		91		9		1,522		1,159		363		31
Revenues from energy sales and feed-in premium		171		101		70		70		194		116		78		67
Operating income		13		(31	)	44		>100		29		(25	)	54		>100
EBITDA(A)3		91		50		41		82		113		63		50		82
Net earnings (loss)		(2	)	(56	)	54		96		(2	)	(56	)	54		96
Net earnings attributable to shareholders of Boralex		(3	)	(44	)	41		94		(3	)	(44	)	41		94
Per share - basic and diluted	($0.03		)	($0.44	)	$0.41		93		($0.03	)	($0.44	)	$0.41		93
Net cash flows related to operating activities		1		90		(89	)	(99	)	—		—		—		—
Cash flows from operations1		67		40		27		67		—		—		—		—
Discretionary cash flows1		21		1		20		>100		—		—		—		—

In the third quarter of 2023, Boralex produced 1,110 GWh (1,522 GWh) of electricity, 9% (31%) more than the 1,019 GWh (1,159 GWh) produced in the same quarter of 2022. The increase on a Consolidated basis is attributable to the commissioning of wind and solar farms and the good performance of comparable wind sites in France. The increase on a Combined basis is primarily due to the integration of the wind farms acquired in the United States in late 2022 as well as from elements contributing to the increase on a Consolidated basis. The diversification of the Corporation's activities both by region and by technology enabled Boralex to partly compensate for the highly unfavourable wind conditions in Canada during the quarter. Boralex thus ended the quarter with total production 9% (7%) below anticipated production4.

For the three-month period ended September 30, 2023, revenues from energy sales and feed-in premiums totalled $171 million ($194 million), 70% (67%) more than in the third quarter of 2022. EBITDA(A)3 amounted to $91 million ($113 million), up 82% (82%) compared to the third quarter of 2022. It should be noted that EBITDA(A) for the third quarter of 2022 included an amount of $28 million attributable to certain contracts for which Boralex had to record a provision following the enactment of the 2022 Supplementary Budget Act in France. Operating income amounted to $13 million ($29 million), which compares to an operating loss of $31 million ($25 million) for the same quarter of 2022. The net loss for the quarter was $2 million, a $54 million improvement compared to the net loss of $56 million for the same quarter of 2022.

1		Combined, Cash Flow from operations and Discretionary Cash Flows are non-GAAP financial measures and do not have a standardized definition under IFRS. Therefore, 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.
2		Power production includes the production for which Boralex received financial compensation following power generation limitations imposed by its customers since management uses this measure to evaluate the Corporation’s performance. This adjustment facilitates the correlation between power production and revenues from energy sales and feed-in premium.
3		EBITDA(A) is a total of sector measures. For more details, see the Non-IFRS financial measures and other financial measures section of this press release.
4		Anticipated production is an additional financial measure, For more details see the Non-IFRS financial measures and other financial measures section of this press.

Nine-month periods ended September 30

	Consolidated								Combined1
(in millions of Canadian dollars, unless otherwise specified)		2023		2022	Change				2023		2022		Change
					$		%						$		%
Power production (GWh)2		4,159		3,998	161		4		5,670		4,486		1,184		26
Revenues from energy sales and feed-in premium		679		496	183		37		759		549		210		38
Operating income		128		105	23		22		192		133		59		45
EBITDA(A)3		381		344	37		11		448		379		69		18
Net earnings		75		15	60		>100		75		15		60		>100
Net earnings attributable to shareholders of Boralex		59		16	43		>100		59		16		43		>100
Per share - basic and diluted		$0.57		$0.16	$0.41		>100		$0.57		$0.16		$0.41		>100
Net cash flows related to operating activities		389		324	65		20		—		—		—		—
Cash flows from operations1		284		262	22		8		—		—		—		—
	As atSept. 30		As atDec. 31		Change			As atSept. 30		As atDec. 31			Change
					$		%						$		%
Total assets		6,557		6,539	18		—		7,215		7,188		27		—
Debt - principal balance		3,313		3,346	(33	)	(1	)	3,727		3,674		53		1
Total project debt		2,820		3,007	(187	)	(6	)	3,234		3,335		(101	)	(3	)
Total corporate debt		493		339	154		45		492		339		153		45

For the nine-month period ended September 30, 2023, Boralex produced 4,159 GWh (5,670 GWh) of power, which represents an increase of 4% (26%) compared to the 3,998 GWh (4,486 GWh) produced in the same period in 2022. Revenues from energy sales and feed-in premiums for the nine-month period ended September 30, 2023, amounted to $679 million ($759 million), up $183 million ($210 million) or 37% (38%) from the same period in 2022.

EBITDA(A) was $381 million ($448 million), up $37 million ($69 million) or 11% (18%) from the same period last year. Operating income totalled $128 million ($192 million),up $23 million (up $59 million) from the same period in 2022. Overall, for the nine- month period ended September 30, 2023, Boralex posted net earnings of $75 million ($75 million) compared to net earnings of $15 million ($15 million) for the same period in 2022.

Outlook

Boralex’s 2025 Strategic Plan is built around the same four strategic directions as the plan launched in 2019 – growth, diversification, customers and optimization – and six corporate targets. The details of the plan, which also sets out Boralex’s corporate social responsibility strategy, are found in the Company’s annual report. Highlights of the main achievements for the quarter ended September 30, 2023, in relation to the 2025 Strategic Plan can be found in the 2023 Interim Report 3, available in the Investors section of the Boralex website.

In the coming quarters, Boralex will continue to work on its various initiatives under the strategic plan, including project development, analysis of acquisition targets and optimization of power sales and operating costs.

Finally, to pursue its organic growth, the Company has a pipeline of projects at various stages of development defined on the basis of clearly identified criteria, totalling 6.4 GW of wind, solar and energy storage projects.

Dividend declaration

The Company’s Board of Directors has authorized and announced a quarterly dividend of $0.1650 per common share. This dividend will be paid on December 15, 2023, to shareholders of record at the close of business on November 30, 2023. Boralex designates this dividend as an “eligible dividend” pursuant to paragraph 89 (14) of the Income Tax Act (Canada) and all provincial legislation applicable to eligible dividends.

1		Combined and Cash Flow from operations are non-GAAP financial measures and do not have a standardized definition under IFRS. Therefore, 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.
2		Power production includes the production for which Boralex received financial compensation following power generation limitations imposed by its customers since management uses this measure to evaluate the Corporation’s performance. This adjustment facilitates the correlation between power production and revenues from energy sales and feed-in premium.
3		EBITDA(A) is a total of sector measures. For more details, see the Non-IFRS financial measures and other financial measures section of this press release.

About Boralex

At Boralex, we have been providing affordable renewable energy accessible to everyone for over 30 years. As a leader in the Canadian market and France’s largest independent producer of onshore wind power, we also have facilities in the United States and development projects in the United Kingdom. Over the past five years, our installed capacity has more than doubled to over 3 GW. We are developing a portfolio of projects in development and construction of close to 6.4 GW in wind, solar and storage projects, guided by our values and our corporate social responsibility (CSR) approach. Through profitable and sustainable growth, Boralex is actively participating in the fight against global warming. Thanks to our fearlessness, our discipline, our expertise and our diversity, we continue to be an industry leader. Boralex’s shares are listed on the Toronto Stock Exchange under the ticker symbol BLX.

For more information, visit www.boralex.com or www.sedarplus.ca. Follow us on Facebook, LinkedIn and Twitter.

Non-IFRS measuresPerformance measures

In order to assess the performance of its assets and reporting segments, Boralex uses performance measures. Management believes that these measures are widely accepted financial indicators used by investors to assess the operational performance of a company and its ability to generate cash through operations. The non-IFRS and other financial measures also provide investors with insight into the Corporation’s decision making as the Corporation uses these non-IFRS financial measures to make financial, strategic and operating decisions. The non-IFRS and other financial measures should not be considered as substitutes for IFRS measures.

These non-IFRS financial measures are derived primarily from the audited consolidated financial statements, but do not have a standardized meaning under IFRS; accordingly, they may not be comparable to similarly named measures used by other companies. Non-IFRS and other financial measures are not audited. They have important limitations as analytical tools and investors are cautioned not to consider them in isolation or place undue reliance on ratios or percentages calculated using these non-IFRS financial measures.

Non-IFRS financial measures
Specific financialmeasure	Use	Composition	Most directlycomparable IFRSmeasure
Financial data - Combined (all disclosed financial data)	To assess the operating performance and the ability of a company to generate cash from its operations.The Interests represent significant investments by Boralex.	Results from the combination of the financial information of Boralex Inc. under IFRS and the share of the financial information of the Interests.Interests in the Joint Ventures and associates, Share in earnings (losses) of the Joint Ventures and associates and Distributions received from the Joint Ventures and associates are then replaced with Boralex’s respective share in the financial statements of the Interests (revenues, expenses, assets, liabilities, etc.)	Respective financial data - Consolidated
Cash flows from operations	To assess the cash generated by the Company's operations and its ability to finance its expansion from these funds.	Net cash flows related to operating activities before changes in non-cash items related to operating activities.	Net cash flows related to operating activities
Discretionary cash flows	To assess the cash generated from operations and the amount available for future development or to be paid as dividends to common shareholders while preserving the long-term value of the business.	Net cash flows related to operating activities before "change in non-cash items related to operating activities,” less (i) distributions paid to non-controlling shareholders, (ii) additions to property, plant and equipment (maintenance of operations), (iii) repayments on non-current debt (projects) and repayments to tax equity investors; (iv) principal payments related to lease liabilities; (v) adjustments for non- operational items; plus (vi) development costs (from the statement of earnings).	Net cash flows related to operating activities
	Corporate objectives for 2025 from the strategic plan.

Non-IFRS financial measures
Specific financialmeasure	Use	Composition	Most directlycomparable IFRSmeasure
Available cash and cash equivalents	To assess the cash and cash equivalents available, as at balance sheet date, to fund the Corporation's growth.	Represents cash and cash equivalents, as stated on the balance sheet, from which known short-term cash requirements are excluded.	Cash and cash equivalents
Available cash resources and authorized financing	To assess the total cash resources available, as at balance sheet date, to fund the Corporation's growth.	Results from the combination of credit facilities available to fund growth and the available cash and cash equivalents.	Cash and cash equivalents

Other financial measures - Total of segments measure
Specific financial measure	Most directly comparable IFRS measure
EBITDA(A)	Operating income

Other financial measures - Supplementary Financial Measures
Specific financial measure	Composition
Anticipated production	Production that the Company anticipates for the oldest sites based on adjusted historical averages, commissioning and planned shutdowns and, for other sites, based on the production studies carried out.
Credit facilities available for growth	The credit facilities available for growth include the unused tranche of the parent company's credit facility, apart from the accordion clause, as well as the unused tranche of the construction facility.

CombinedThe following tables reconcile Consolidated financial data with data presented on a Combined basis:

	2023						2022
(in millions of Canadian dollars) (unaudited)	Consolidated		Reconciliation(1)		Combined		Consolidated		Reconciliation(1)		Combined
Three-month periods ended September 30:
Power production (GWh)(2)	1,110		412		1,522		1,019		140		1,159
Revenues from energy sales and feed-in premium	171		23		194		101		15		116
Operating income	13		16		29		(31	)	6		(25	)
EBITDA(A)	91		22		113		50		13		63
Net earnings	(2	)	—		(2	)	(56	)	—		(56	)

Nine-month periods ended September 30:
Power production (GWh)(2)	4,159		1,511		5,670		3,998		488		4,486
Revenues from energy sales and feed-in premiums	679		80		759		496		53		549
Operating income	128		64		192		105		28		133
EBITDA(A)	381		67		448		344		35		379
Net earnings	75		—		75		15		—		15

	As at September 30, 2023						As at December 31, 2022
Total assets	6,557		658		7,215		6,539		649		7,188
Debt - Principal balance	3,313		414		3,727		3,346		328		3,674

(1)		Includes the respective contribution of joint ventures and associates as a percentage of Boralex's interest less adjustments to reverse recognition of these interests under IFRS. This contribution is attributable to wind power sites in North America segment and includes corporate expenses of $1 million in EBITDA(A) for the nine- month period ended September 30, 2023 ($2 million as at September 30, 2022).
(2)		Includes financial compensation following electricity production limitations imposed by customers.

EBITDA(A)

EBITDA(A) is a total of segment financial measures and represents earnings before interest, taxes, depreciation and amortization, adjusted to exclude other items such as acquisition costs, other loss (gains), net loss (gain) on financial instruments and foreign exchange loss (gain), the last two items being included under Other.

EBITDA(A) is used to assess the performance of the Corporation's reporting segments.

EBITDA(A) is reconciled to the most comparable IFRS measure, namely, operating income, in the following table:

	2023						2022						Change2023 vs 2022
(in millions of Canadian dollars) (unaudited)	Consolidated		Reconciliation(1)		Combined		Consolidated		Reconciliation(1)		Combined		Consolidated		Combined
Three-month periods ended September 30:
EBITDA(A)	91		22		113		50		13		63		41		50
Amortization	(73	)	(14	)	(87	)	(84	)	(6	)	(90	)	11		3
Other gains	—		3		3		2		—		2		(2	)	1
Share in earnings (loss) of joint ventures and Associates	(2	)	2		—		3		(3	)	—		(5	)	—
Change in fair value of a derivative included in the share of the joint ventures	(3	)	3		—		(2	)	2		—		(1	)	—
Operating income	13		16		29		(31	)	6		(25	)	44		54
Nine-month periods ended September 30:
EBITDA(A)	381		67		448		344		35		379		37		69
Amortization	(218	)	(41	)	(259	)	(228	)	(18	)	(246	)	10		(13	)
Impairment	—		—		—		(3	)	(1	)	(4	)	3		4
Other gains	—		3		3		2		2		4		(2	)	(1	)
Share in earnings of joint ventures and associates	(47	)	47		—		(31	)	31		—		(16	)	—
Change in fair value of a derivative included in the share of the joint ventures	12		(12	)	—		21		(21	)	—		(9	)	—
Operating income	128		64		192		105		28		133		23		59

(1)

Includes the respective contribution of joint ventures and associates as a percentage of Boralex's interest less adjustments to reverse recognition of these interests under IFRS.

Cash flow from operations and discretionary cash flows

The Corporation computes the cash flow from operations and discretionary cash flows as follows:        

	Consolidated
	Three-month periods ended				Twelve-month periods ended
(in millions of Canadian dollars) (unaudited)	September 30,2023		September 30,2022		September 30,2023		December 31,2022
Net cash flows related to operating activities	1		90		578		513
Change in non-cash items relating to operating activities	66		(50	)	(153	)	(110	)
Cash flows from operations	67		40		425		403
Repayments on non-current debt (projects)(1)	(44	)	(38	)	(229	)	(212	)
Adjustment for non-operating items(2)	3		3		3		7
	26		5		199		198
Principal payments related to lease liabilities	(3	)	(2	)	(17	)	(15	)
Distributions paid to non-controlling shareholders(3)	(9	)	(6	)	(43	)	(37	)
Additions to property, plant and equipment (maintenance of operations)	(1	)	(5	)	(11	)	(12	)
Development costs (from statement of earnings)	8		9		37		33
Discretionary cash flows	21		1		165		167

(1)		Excluding VAT bridge financing, early debt repayments and repayments under the construction facility - Boralex Energy Investments portfolio.
(2)		For the twelve-month period ended September 30, 2023, favourable adjustment of $2 million consisting mainly of acquisition, integration and transaction costs. For the year ended December 31, 2022, favourable adjustment of $7 million consisting mainly of acquisition and transaction costs.
(3)		Comprises distributions paid to non-controlling shareholders as well as the portion of discretionary cash flows attributable to the non-controlling shareholder of Boralex Europe Sàrl.

Available cash and cash equivalents and available cash resources and authorized financing

The Corporation defines available cash and cash equivalents as well as available cash resources and authorized financing as follows:

	Consolidated
(in millions of Canadian dollars) (unaudited)	As at September 30		As at December 31
	2023		2022
Cash and cash equivalents	476		361
Cash and cash equivalents held by entities subject to project debt agreements(1)	(405	)	(279	)
Bank overdraft	(8	)	(12	)
Available cash and cash equivalents	63		70
Credit facilities available for growth	329		424
Available cash resources and authorized financing	392		494

(1)

This cash can be used for the operations of the respective projects, but is subject to restrictions for non-project related purposes under the credit agreements.

Disclaimer regarding forward-looking statementsCertain statements contained in this release, including those related to results and performance for future periods, installed capacity targets, EBITDA(A) and discretionary cash flows, the Corporation's strategic plan, business model and growth strategy, organic growth and growth through mergers and acquisitions, obtaining an investment grade credit rating, payment of a quarterly dividend, the Corporation’s financial targets, the partnership with Énergir and Hydro-Québec for the elaboration of three 400 MW projects for which the development will depend on Hydro-Québec's changing needs, the portfolio of renewable energy projects, the Corporation’s Growth Path and its Corporate Social Responsibility (CSR) objectives are forward-looking statements based on current forecasts, as defined by securities legislation. Positive or negative verbs such as “will,” “would,” “forecast,” “anticipate,” “expect,” “plan,” “project,” “continue,” “intend,” “assess,” “estimate” or “believe,” or expressions such as “toward,” “about,” “approximately,” “to be of the opinion,” “potential” or similar words or the negative thereof or other comparable terminology, are used to identify such statements.

Forward-looking statements are based on major assumptions, including those about the Corporation’s return on its projects, as projected by management with respect to wind and other factors, opportunities that may be available in the various sectors targeted for growth or diversification, assumptions made about EBITDA(A) margins, assumptions made about the sector realities and general economic conditions, competition, exchange rates as well as the availability of funding and partners. In particular, CSR targets are based on a number of assumptions, including, but not limited to, the following key assumptions: implementation of various corporate and business initiatives to reduce direct and indirect GHG emissions; availability of technologies to achieve targets; absence of new business initiatives or acquisitions of companies or technologies that would significantly increase the expected level of performance; no negative impact resulting from clarifications or amendments to international standards or the methodology used to calculate our CSR performance and disclosure; sufficient participation and collaboration of our suppliers in setting their own targets in line with Boralex’s CSR initiatives; the ability to find diverse and competent talent; education and organizational engagement to help achieve our CSR targets. While the Corporation considers these factors and assumptions to be reasonable, based on the information currently available to the Corporation, they may prove to be inaccurate.

Boralex wishes to clarify that, by their very nature, forward-looking statements involve risks and uncertainties, and that its results, or the measures it adopts, could be significantly different from those indicated or underlying those statements, or could affect the degree to which a given forward-looking statement is achieved. The main factors that may result in any significant discrepancy between the Corporation’s actual results and the forward-looking financial information or expectations expressed in forward-looking statements include the general impact of economic conditions, fluctuations in various currencies, fluctuations in energy prices, the risk of not renewing PPAs or being unable to sign new corporate PPA, the risk of not being able to capture the US or Canadian investment tax credit, counterparty risk, the Corporation’s financing capacity, cybersecurity risks, competition, changes in general market conditions, industry regulations and amendments thereto, particularly the legislation, regulations and emergency measures that could be implemented for time to time to address high energy prices in Europe, litigation and other regulatory issues related to projects in operation or under development, as well as other factors listed in the Corporation’s filings with the various securities commissions.

Unless otherwise specified by the Corporation, forward-looking statements do not take into account the effect that transactions, non-recurring items or other exceptional items announced or occurring after such statements have been made may have on the Corporation’s activities. There is no guarantee that the results, performance or accomplishments, as expressed or implied in the forward-looking statements, will materialize. Readers are therefore urged not to rely unduly on these forward-looking statements.

Unless required by applicable securities legislation, Boralex’s management assumes no obligation to update or revise forward-looking statements in light of new information, future events or other changes.

Percentage figures are calculated in thousands of dollars.

For more information
MEDIA	INVESTOR RELATIONS
Camille Laventure	Stéphane Milot
Advisor, Public Affairs and External Communications	Vice President, Investor Relations
Boralex Inc.	Boralex Inc.
438-883-8580	514-213-1045
camille.laventure@boralex.com	stephane.milot@boralex.com
Source : Boralex inc.