In a context of strong demand for the renewable energy industry, Boralex management ensures that it will be able to find the necessary financing for the development of its projects.
The renewable energy producer said its portfolio of projects under construction reached 6.8 gigawatts (GW) as of December 31. Nearly 400 megawatts (MW) were added in the last three months of the year. The company is also awaiting the results of calls for tenders in New York State and Ontario.
“The projects are spread out over time, so we will not have difficulty financing them,” assures the president and CEO of the energy producer, Patrick Decostre, during a conference call on Friday, aimed at discuss quarterly results.
“If we continue to be successful [pour remporter des contrats]we will have to find ways to finance these projects, probably with a recovery of capital by selling minority stakes as we did in France,” he specifies.
The head of finance, Bruno Guilmette, specifies that Boralex had sufficient capital for the next year. The company had $547 million in available cash and authorized financing as of December 31. This is $155 million more than the previous quarter.
Mr. Guilmette emphasizes that several options are available to the Quebec company, including debt linked to a particular project, tax credits from the federal government, the sale of assets or the formation of partnerships for certain projects.
“The market is very receptive,” says the finance chief. We have good relationships with lenders. We are able to choose the best financing options. »
He notes that Boralex generates cash flows and that these are reinvested in the development of projects. “We set ourselves the objective of reinvesting between 50% and 75%. This quarter, 62% of cash flow generated from operations is reinvested in the business. »
Mr. Decostre mentioned that demand was very strong in the markets where Boralex focuses its attention, namely Quebec, Ontario, New York State, France and the United Kingdom. “We have a lot of work in these jurisdictions. »
Strong international demand also reduces competition in Canada while international companies already have their hands full in the United States and Europe.
“If you look at Germany, they were issuing permits for 1 GW per year, now it’s 5 GW per year. If you are a German company, you do not have to come to Quebec or Ontario because you already have a lot to do in Germany, France, the United Kingdom or the United States. »
Analyst Brent Stadler, of Desjardins Capital Markets, believes that Boralex “is in a good position to finance its growth.” He estimates that the company will be able to generate approximately $120 million in cash flow in 2024 to reinvest in project development.
Analyst Sean Steuart of TD Securities points out that Boralex has submitted its application for the equivalent of 765 megawatts (MW) of projects in New York State and Ontario. “This supports our opinion that Boralex is in a good position to fuel its portfolio of projects in development. »
Results above expectations
Boralex reported better-than-expected fourth-quarter results as the company increased its electricity production by 12% to 1,814 gigawatt hours (GWh).
The producer posted a net profit of $58 million, compared to a loss of $7 million in the same period last year. Revenues, for their part, decreased by 2% to $315 million.
Its combined adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), a metric that analysts covering Boralex follow more closely, reached $229 million. Before the results were released, analysts expected EBITDA to be $196 million, according to a compilation from RBC Capital Markets.
Boralex shares lost 34 cents, or 1.14%, to $29.49 on the Toronto Stock Exchange in the afternoon.