Boralex Inc. Cl A ((TSE:BLX)) has held its Q4 earnings call. Read on for the main highlights of the call.
Boralex Inc. Cl A’s latest earnings call presented a mixed sentiment, highlighting both strategic financial maneuvers and operational hurdles. The company showcased a significant increase in project financing and strategic positioning in growth markets. However, these positive developments were counterbalanced by lower-than-expected financial performance and production, primarily due to adverse weather conditions and construction delays.
Record Long-Term Financing
Boralex achieved a milestone by closing a record CAD1.2 billion in long-term financing. This includes bridged loans for federal investment tax credit in Canada, specifically for projects currently under construction. This financial achievement underscores Boralex’s commitment to securing robust funding for its ongoing and future projects.
Project Expansion and Diversification
The company made notable strides in expanding its project portfolio, which now totals over 8 gigawatts—a 1.2 gigawatt increase from 2023. Key projects such as Limekiln in Scotland, which is now connected to the grid, and the Apuiat project in Quebec, highlight Boralex’s efforts in diversification and expansion.
New Strategic Plan and Share Buyback Program
Boralex is set to unveil a new strategic plan for 2025 to 2030, reflecting its forward-thinking approach. Additionally, the company has initiated a share buyback program, indicating its belief that its stock is currently undervalued and aiming to enhance shareholder value.
Strong Market Positioning
With a solid footing in Canada, Boralex boasts strong local expertise and relationships with First Nations and communities. The company also sees significant growth opportunities in Europe and the US, reinforcing its strong market positioning.
Reduced Financial Performance
Despite strategic advancements, Boralex reported a 2% decrease in combined production compared to 2023, and an 8% drop from anticipated production levels. Financial performance in 2024 fell short of expectations, with a combined operating income of CAD267 million and combined EBITDA of CAD670 million, marking a 1% decline from the previous year.
Weather-Related Challenges
Adverse weather conditions in France and Canada led to a total combined production decrease of 11% compared to the same quarter last year, and 12% lower than anticipated. These challenges significantly impacted Boralex’s operational performance.
Construction Delays
The Apuiat project in Quebec faced construction delays due to contractor issues and harsh winter conditions. These setbacks highlight the operational challenges Boralex is navigating in its project execution.
Forward-Looking Guidance
Looking ahead, Boralex remains focused on strategic growth, with plans to present a new strategic plan for 2025 to 2030. The company aims to maintain a solid financial position, with project debt at 89% of total debt. Boralex is also exploring asset recycling and a share buyback program to enhance shareholder value, alongside submitting bids in the AR7 RFP.
In summary, Boralex’s earnings call reflected a blend of strategic financial achievements and operational challenges. While the company is making significant strides in project financing and market positioning, it faces hurdles in production and construction. Investors will be keen to see how Boralex navigates these challenges while pursuing its ambitious strategic growth plans.