Q4 2024 Boralex Inc Earnings Call
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Speaker Change: Good morning, ladies and gentlemen, and welcome to the Boralex fourth quarter and fiscal 2020 full financial results Conference call.
Speaker Change: Please note that all lines are in listen only mode. Following the presentation. We will conduct a question and answer session in which financial analyst shareholders and investors will be invited to all of the questions by pressing star one and one of the telephone.
Speaker Change: Please also note that this conference call is being recorded for webcast participants you can also ask questions during the cold.
Speaker Change: But they will be answered by email after the cold.
Speaker Change: Finally media Representatives are invited to contact company level Chia senior adviser of public affairs, and external communications that will relax her contact information is provided at the end of the quarterly press release.
Speaker Change: I would now like to turn the conference over to Mr. Stefan Malone, Vice President Investor Relations for <unk>. Please go ahead.
Well. Thank you operator measurable go so good morning, everyone welcome to Biotics fourth quarter and year end results conference call. So joining me today on the call.
Mr. Guilmette: Our president and Chief Executive Officer, we're going to get them at our executive Vice President and Chief Financial Officer, and other members of our management and finance teams. So Mr. Die cast will begin with comments about market conditions and the highlights of the quarter afterwards, Mr. Guilmette will carry on with financial highlights and then we will be able to.
Speaker Change: To answer your questions.
Speaker Change: As you know during this call we will discuss historical as well as forward looking information when talking about the future. There are very few of risk factors that I've been listed in our different filings with securities regulators, which can materially change our estimated results for these documents are all available for consultation at SEDAR plus dossier.
Speaker Change: And our webcast presentation document the disclosed results are presented both on a consolidated basis and on a combined basis when talking about the results. We generally refer to combined numbers and when referring to cash flow and balance sheet. We generally refer to consolidated numbers. So please note that combined is a non-GAAP financial.
Speaker Change: And does not have standardized meaning under the IRS.
Accordingly, combined may not be comparable to similarly named measures used by other companies. So far more detail C. D. None I FRS and other financial measures section in the MD&A. So the press release, the MD&A consolidated financial statements and a copy of today's presentation are all posted antibiotics website.
Speaker Change: But Alex Dot com on Dirty investors things.
Speaker Change: If you wish to if you wish to.
Speaker Change: To receive a copy of these documents please contact me.
Speaker Change: So Mr. <unk> will now start with his comments. Please go ahead, Patrick Thank you Stefan and good morning, everyone.
Speaker Change: For me to present, our results and achievements for the fourth quarter and fiscal year 2024.
Speaker Change: An environment with a lot of noise. We stayed focused on the execution of our plan in the past year, creating value in our four key geographies, Canada U K U S and France.
Speaker Change: We have developed strong expertise and competitive advantages in this region and we were.
We'll continue to capitalize on our project pipeline to produce cost competitive renewable energy at rate of returns in line with our objectives and market expectations.
Speaker Change: We closed a record $1 2 billion Canadian in long term financing, including breached loans for federal investment tax credit in Canada for our projects under construction.
Speaker Change: We continue to optimize all aspects of our business and we maintain a very solid financial position.
Speaker Change: Recent acquisitions of public companies by private investors show that the value of renewable companies remained strong driven by increasing demand for electricity in many regions.
Speaker Change: Okay.
Speaker Change: In terms of financial performance overall for the fiscal for fiscal year 'twenty 'twenty four combined production was 2% lower than in 2023 and eighth person below anticipated production.
Speaker Change: When conditions in France, and to a lesser extent in Canada have been weaker than expected for a good part of the year.
Our diversification in the U S helped us in 2024 with wind conditions in this region being higher than expected.
Speaker Change: As a result, our financial performance in 2024, it is below our expectations with a combined operating income of $267 million and a combined EBITDA of 670 million down one person from 2012.
Speaker Change: <unk> three <unk>.
Speaker Change: Renewal will cover later in more details our fourth quarter results.
Speaker Change: During the year 'twenty 'twenty four we made good progress on the construction of a rare limekiln project in Scotland and now we're at a point project in Quebec.
Speaker Change: I am very pleased to announce that line Kim is connected to the grid after a small delay from the grid operator in Scotland.
Speaker Change: Project, He's no successfully going through the testing phase and should be fully commissioned beginning of April.
The commencement of operations at our first wind farm in Scotland marks a significant milestone probiotics.
Speaker Change: I would like to acknowledge our team's efforts and accomplishments over the past years.
Speaker Change: Starting in 2025, we will benefit from increased revenue and cash flow diversification.
Speaker Change: During the last quarter of 2024, we also closed the acquisition of a 50 person participation in crushing the Hawk extension project.
Speaker Change: 145 megawatt wind project under development in the adjacent 50 megawatt battery project located in Scotland.
Speaker Change: Our UK team already has an extensive experience in this area and he's looking forward to bring crashing down hawk through the remaining stages of development.
Speaker Change: Finally, we are preparing ourselves to submit bids in the E. R. Seven RFP later this year.
Speaker Change: Regarding the construction of our <unk> project in Quebec, we have faced some difficulties onsite with one of our rig contractor, which combined with arch winter condition delayed the <unk> by a few months.
Speaker Change: The experience Anable S. This experience enable us to reinforce our project management and controls for upcoming project.
Speaker Change: In particular, our Danish Street proof wind project for which commissioning is scheduled in 2026 will benefit from our learnings.
Speaker Change: <unk> entered the construction phase with the start of onsite work for roads, leading to the base of the turbines.
Speaker Change: In Ontario.
Speaker Change: Construction of our two battery storage project acres Vale and Tilbury are advancing as planned with commissioning scheduled by the end of this year.
Speaker Change: We announced the financing of both projects during the last quarter of the year on very good.
Speaker Change: Terms, including bridge loan to finance the investment tax credits.
Speaker Change: To which the project are eligible.
Speaker Change: Finally on the development side 2024 was.
Speaker Change: Very good year for behind X or portfolio of projects under development and gross baths is no totaling over eight gigawatt in our growth potential markets.
Speaker Change: One two gigawatt increase over 2023.
Speaker Change: I would like now to cover market conditions by region.
Speaker Change: Starting with the United States, where there is a lot of uncertainty.
Speaker Change: Potential policy changes.
Speaker Change: So far the executive orders that were signed by the New U S administration have no direct impact on our operations and we don't expect major changes in law.
Speaker Change: That would affect our activities, but we remain vigilant.
Speaker Change: As electricity demand in the United States is increasing mainly driven by growth in U S manufacturing and the expansion of data centers. We believe overall that this situation could even bring opportunities and that we need to stay focused on our.
Speaker Change: Long term strategy.
Speaker Change: In Canada <unk>.
Speaker Change: Back in Ontario remains strong potential growth market for biologics.
Speaker Change: We are in discussions with hydro, Quebec about partnerships for large project as well as RSP to come for smaller projects.
Speaker Change: We are well position in this market with strong local expertise and good relationships with first nations and communities.
Speaker Change: Our three times 400 megawatt projects in partnership with Hydro, Quebec and the next East then issued shareholders in D&S West are very good example of whole hydro, Quebec would like to develop large project going forward.
Speaker Change: In Ontario, the government has increased the target for additional capacity from five gigawatt to seven five gigawatt by 2034 to meet shoring.
Speaker Change: Demand.
Speaker Change: In 2024 with the selection of the Oxford storage project, we consolidated our position as the leading developer in the battery storage technology and I'll tell you. Our team. There is no building a pipeline of wind project to be ready for the upcoming.
Speaker Change: Rounds of Rfps.
In Europe.
Speaker Change: The Labour party's election in the U K is very promising.
Speaker Change: For the renewable energy sector. The government objectives over the next five years is to double the onshore wind capacity from 14 to 28 gigawatt and increased battery storage installed capacity by five times from 5% to 25% can you get out.
Speaker Change: But along with significant investments in the modernization and expansion of the electrical grid.
Speaker Change: I will know rapidly cover the main variances in our portfolio.
Speaker Change: In 2020 for the pipeline of development project increased by over 1.1 gigawatt totaling seven gigawatt the.
Speaker Change: Pipeline change was there was a resolution of the addition of wind solar and storage projects in Europe and North America.
Speaker Change: The early stage for roughly one eight gigawatt.
Speaker Change: And the transition.
Speaker Change: <unk> project to the mid <unk> advanced and secured stage in Europe, and North America.
Speaker Change: The gross pass now consist of nerdy, one gigawatt of wind solar and battery storage project.
Speaker Change: The evolution of the gross baths, mainly include included the transition of two storage project and one wind project in North America, two under construction or ready to build stage.
Speaker Change: The commissioning of three wind project and one solar project in Europe for 84 megawatts.
Speaker Change: I have already.
Speaker Change: What about our major achievements in line with our strategic directions, and long term objectives, but you can find additional details in the slides of the webcast and in our MD&A.
Speaker Change: This completes my part I will know that Bruno cover the financial portion in more detail and we'd be back later for the question period Reno. Thank.
Bruno: Thank you Patrick good morning, everyone.
Speaker Change: I'll start with the financial highlights of the quarter.
Speaker Change: Total combined production was down 11% compared to the same quarter last year, and 12% lower than anticipated due to unfavorable weather conditions in France and to a lesser extent in Canada, when comparing to anticipated production.
Speaker Change: As a result, our combined EBITDA amounted to $191 million down 38 million and.
Speaker Change: <unk> consolidated <unk> amounted to $47 million down $44 million compared to the fourth quarter of 2023.
Speaker Change: I will now review the progress made in the past four years in light of our 2025 corporate objectives.
Speaker Change: First our installed capacity went from 2.2 gigawatt in 2020 232 Gigawatts at the end of 2024.
Speaker Change: 2020 for operating income and EBITDA.
Speaker Change: Alright comparable to 2023 levels.
Speaker Change: Our reinvestment ratio is in line with our 50% to 70% target at.
Speaker Change: 57%.
Speaker Change: We are more than ever focused on the disciplined execution of our plan in this growth environment as we are making good progress on organic growth with over.
Speaker Change: 0.7, gigawatts of capacity under construction.
Speaker Change: The current gap to meet our 2025 targets is mainly attributable to M&A assumptions embedded in our targets for which we have so far.
Speaker Change: <unk> found the appropriate targets and we will only do if it meets our investment guidelines in other words, we will continue to grow with discipline.
Speaker Change: Total debt increased in 2000 $24 billion to $4 billion with project debt now representing 89%.
Speaker Change: I would like to congratulate our finance team for securing.
$1.2 billion in financing in 2024.
Speaker Change: This achievement highlights our capability to close sophisticated financings on optimal terms, providing enhanced financial.
Speaker Change: Financial flexibility to achieve our objectives.
Speaker Change: I will now provide more detailed information on our financial results for the fourth quarter starting with production.
Speaker Change: In North America, sorry, I missed production.
Speaker Change: In North America.
Speaker Change: Total combined production for the quarter was 3% higher than the same quarter last year, but 5% lower than anticipated.
Speaker Change: Production from wind assets in North America was 9% higher compared to the same quarter last year, but 2% lower than anticipated.
Speaker Change: Yeah.
Speaker Change: <unk> for the hydro sector was 30% lower than last year, and 23% lower than anticipated due to unfavorable weather conditions in both Canada and the U S.
Speaker Change: Production from solar assets in the United States was 4% higher than the same quarter last year, but 13% lower than anticipated.
Speaker Change: In Europe total production was 29% lower compared to the same quarter last year and 23% lower than anticipated.
Speaker Change: Mainly attributable to unfavorable wind conditions and trends.
Speaker Change: Okay.
Speaker Change: As mentioned earlier the decrease in production affected our revenues EBITDA and <unk>, which were compensated in part by the contribution of New Commission sites in France.
Speaker Change: Our commercial strategy optimization.
Speaker Change: In conclusion 2024.
Speaker Change: It was a year of growth for bottlenecks as we continue to develop and execute our projects in our target markets, maintaining a solid balance sheet and good financial flexibility.
Speaker Change: Looking ahead, we are very excited for the year to come starting strong with the commissioning of our projects linking in Scotland and in Quebec, and the construction are of battery storage projects in Ontario.
Speaker Change: We are also looking forward to present, our new strategic plan 2025 to <unk> 30 in the upcoming months.
Speaker Change: We will continue to be ambitious in our growth and diversification strategies, while creating optionality in our capital allocation.
Speaker Change: In addition to securing optimized financing we will be.
Speaker Change: More proactive on asset recycling.
Speaker Change: We are also initiating a share buyback program as we believe our current stock price does not reflect appropriate to proper long term value of our company.
Speaker Change: Thank you for your attention we are now ready to take your questions.
Speaker Change: Thank you as a reminder to ask a question. Please press star one and one on your telephone and wait for your name to be announced until we grow. Your question. Please press star one and one again once again, please press star one on your telephone Eduardo.
Speaker Change: Okay.
Speaker Change: So we'll go your question Please press star one and $1.
Speaker Change: Already to the question to proceed with the question period.
Speaker Change: As a reminder to ask a question. Please press star one and one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one and one again, okay, sorry, everyone on the line or trying to.
Speaker Change: Reach out to the operator seems to be.
Speaker Change: Having a technical problem.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: Just a second we're seeing we're not hearing the operator. So please stay tuned we're trying to resolve this issue.
Yeah.
Speaker Change: What more dws mistook optics.
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Speaker Change: Thanks, I'd like to see the operator, please standby while we continue with the conference call. Thank you.
Thank you and our first question will come from Rupert and mirror from N V F.
Your line is now open.
Speaker Change: Hi, Good morning, everyone can you hear me.
Speaker Change: Hello.
Speaker Change: Okay. Operator are you there.
Speaker Change: Hi, we are ready for the question period, and I'm, sorry, we had a technical issue here. We couldn't hear you. So we are ready for the question period. Okay. Perfect. Thank you and as a reminder to ask a question. Please press star one one.
Speaker Change: And our first question will come from Rupert Mehra from M. D. F. Your line is now open.
Rupert Mehra: Thank you Stefan can you hear me.
Speaker Change: Yes.
Speaker Change: Doing a very good very well.
Speaker Change: Sorry for that.
Speaker Change: No worries.
Speaker Change: You talked about the private equity activity that we saw in Quebec recently.
Speaker Change: I'm wondering does this have any impact on your view.
Speaker Change: Of the competitive landscape in Quebec, and your future opportunities for investment in that province.
Speaker Change: Yes, good morning, Robert what I think the first point is.
Speaker Change: The recent transaction is providing hydro Quebec.
Speaker Change: More independence since there are no longer there will there are no longer shareholders of.
Speaker Change: Forward competitor in their checks.
Ed.
Speaker Change: With the with that the demand is is very very important in Quebec hydro, Quebec needs. The participation of all the players to realize its a its plan on time.
Speaker Change: As I mentioned in my speech I think <unk> is well positioned because we are.
Speaker Change: The only one with experience of partnership and large wind project with hydro, Quebec and in <unk>.
Speaker Change: Under construction.
Speaker Change: And finally, you know the convention will make us better but are.
Speaker Change: We're used to that.
Speaker Change: Very good and a follow up on the private equity valuations of Bruno you highlighted that you could look to accelerate some asset recycling or I'm wondering where do you think are the best opportunities for recycling in <unk> portfolio.
Rupert Mehra: Yeah I Rupert.
Rupert Mehra: There's there's a few and we're looking at looking a few years ahead.
Rupert Mehra: In in.
Rupert Mehra: Making sure that we plan. These in advance says as you as you understand we always look to recycle assets when we've created some some value.
Rupert Mehra: And that we can have a for example financial investors join us as we as we previously did very successfully in France, selling selling down 30%.
Rupert Mehra: And so if you are for example are we.
Rupert Mehra: We've talked about the possibility.
Rupert Mehra: In the execution currently we fat.
Rupert Mehra: We're looking to sell down nor sell completely our our hydro assets.
Rupert Mehra: Which which is something that.
Rupert Mehra: Makes sense from a from a valuation perspective at this time from our perspective.
Rupert Mehra: And Theres a theres additional elements in our portfolio that we're looking at in the future.
Rupert Mehra: When once we've created value when Sweden for example, <unk>.
Rupert Mehra: L T asset and created some value where our teams can that can create value and NAV a partial sell downs. So in some cases, it's going to be complete.
Rupert Mehra: Complete sell in some cases, it's gonna be partial sell downs.
Speaker Change: Okay very good I'll leave it there and get back in the queue. Thank you.
Thank you. Thank you.
Speaker Change: Thank you we are not going to proceed with our next question.
Speaker Change: The question has come from the line of Sean Stewart from TD Cowen. Please ask your question. Your line is opened.
Sean Stewart: Thanks, Good morning, everyone.
Sean Stewart: Bruno wondering if you can comment on your overall comfort with available liquidity.
Sean Stewart: And I appreciate that this can be augmented by asset recycling, but.
Sean Stewart: When youre looking at the development pipeline over the next couple of years, and I guess buyback ambitions with Eon CIB in place now.
Sean Stewart: Comfort with the current funding position relative to those demands on capital over the next couple of years.
Speaker Change: Yeah, Hey, Sean Thank you.
Speaker Change: We're very comfortable with the with the financial flexibility that we have today with over 500 million 523 of essential.
Speaker Change: Availability.
Speaker Change: Looking forward a year or two.
Speaker Change: We're very comfortable when we are when we execute our plan.
Speaker Change: We've included some and been successful so far and in bridge financing some of the Itc's.
Speaker Change: That will be a further rich financings for dose itc's.
Speaker Change: So where we're quite comfortable for that looking forward.
Speaker Change: 12 to 24 months and our ability to to use.
Speaker Change: To fund our growth.
Speaker Change: As I always say that doesn't include M&A, because M&A is unpredictable and size and timing.
Speaker Change: But certainly for for that growth pipeline, or we're quite comfortable with that position and that.
Speaker Change: That are the asset recycling.
Speaker Change: Valuation.
Speaker Change: I think you've you've seen evidence dish this week.
Speaker Change: And that private investors are looking at the long term value of these types of assets and are seeing a cigna.
Speaker Change: Significant additional value than the public markets is currently showing in our stock price.
Speaker Change: Yeah.
Speaker Change: So we're confident the following additional value.
Speaker Change: Understood and can you speak to.
Speaker Change: Perception of underlying value and the share price right now and it's 10% buyback youre putting in place here.
Speaker Change: Perceived value in your shares versus opportunities for organic growth with that sort of spread looks like.
Speaker Change: Yes, I think it's a I mean, it's it's a capital allocation decision.
Speaker Change: The share buyback program is a tool that was missing in our toolbox.
Speaker Change: We'll continue to invest and my answer I think points to that are we have a financial flexibility to too.
Speaker Change: Also invest in our program and do the share buyback program.
Speaker Change: In and when we feel it's appropriate because we currently believe that our stock price is undervalued.
Speaker Change: And we want to use.
Speaker Change: That program to.
Speaker Change: To give the right signal to the market that we're very confident in our in our growth but.
Speaker Change: It's a it's a disciplined capital allocation so as we see a good return on buying back some of our shares and we also.
Speaker Change: Have had a deep pipeline of projects on which we see also very good returns. So we will continue to invest significantly in our projects.
Speaker Change: The share buyback program is just an additional tool that we'll use.
Speaker Change: Efficiently.
Speaker Change: Okay understood. That's all I have for now thanks.
Speaker Change: Thank you.
Speaker Change: Now going to proceed with our next question.
Speaker Change: The question has come from the line of Nicola Boy check from <unk> Securities. Please ask your question.
Nicola Boy: Thanks, Good morning, guys.
Nicola Boy: On the accurate construction issues and the harsh winter delays could you spend a little bit on what happened there and why.
Nicola Boy: <unk> will benefit from whatever learnings, you're taking from that project.
Nicola Boy: Yes.
Nicola Boy: Good morning Nicola.
Nicola Boy: Essentially.
Nicola Boy: There was a delay.
Nicola Boy: Yeah.
222 for the erection of the turbine and the Finalization of the mix, what we call the mechanical completion.
Nicola Boy: And then you have this is a period, where you have cost running because you have cranes on site and people on site.
Nicola Boy: We have as I mentioned, we have.
Nicola Boy: Difficulties with one contractor so we put other support from our internal team and also external support and that things are going better now we have 31 turbines erected on 34.
Nicola Boy: We are finalizing mechanical completion.
Nicola Boy: That's that's why we are so so so you know that we experience in pain in Quebec, a very very tough winter was deep snow and freezing rain in December.
Nicola Boy: So that that last for the last three months.
Nicola Boy: So that's where we are and we know that how to finalize the think.
Nicola Boy: The team is looking to that the second point on your question is.
Nicola Boy: How do we estimate and go.
Nicola Boy: Deeply into the risk of the project before and the evaluation of the different risk that can happen in the project, we did that but.
Nicola Boy: But we could do better and that's what we are doing for the other project.
Nicola Boy: <unk>.
Nicola Boy: Typically but also all the other project that we have presently.
Speaker Change: Okay understood. Thanks.
Nicola Boy: Awesome.
Speaker Change: Previously in the past about M&A, possibly contributing to some of the gap that you might have in the organic capacity looking to add relative to the 2025 target and hopefully having 4500 4400 megawatts of operating capacity you guys have anything in your sites right now.
Speaker Change: Especially given that you might decide some hydro assets to hold back or make a material acquisition.
Speaker Change: Yeah, I don't want to be too specific on on targets, but generally you've seen that so we are active in the U K on the M&A front.
Speaker Change: Growing that business and that market more.
Speaker Change: More quickly.
Speaker Change: So geographically that's a key that's a key market, where we're looking at to do more M&A.
Speaker Change: The U S could be it could be a target.
Speaker Change: And certainly in the medium term.
Speaker Change: And.
Speaker Change: That steps.
Speaker Change: Where we're looking at different types of assets.
Speaker Change: But also.
Speaker Change: Our teams and the types of strategies to complement what we already have in our in those markets. So we want to grow these markets.
Speaker Change: More more quickly.
Speaker Change: By adding for example that teams are in the U S or.
Speaker Change: Or some some assets in the U K for example.
Speaker Change: Thanks, Brent and the last from me just on the investment grade credit rating I know you've been seeking that for a while and I. Appreciate the challenges in receiving that is there any update on when that might come and given the delay.
Speaker Change: Have there been any financial.
Speaker Change: Objectives, you've been looking to do that you haven't been able to because you're waiting for that and therefore things you would want to do right away as soon as you get it.
Speaker Change: I'd say, it's interesting question. So we've we've.
Essentially elected.
Speaker Change: And.
Speaker Change: But certainly a quite some time in the on the rating.
Speaker Change: The decision I would I would say.
Speaker Change: Because we've we've decided to delay delay.
Speaker Change: At after having some discussions.
Speaker Change: Because it was.
Speaker Change: Certainly putting a constraint on our on our growth and the ability to allocate our capital in the most efficient way.
Speaker Change: So.
Speaker Change: And to answer your question.
Speaker Change: We have not seen any limitation.
Speaker Change: A limitation in our financing.
Speaker Change: By not having the credit trading.
Speaker Change: So to me the importance of their credit trading is to get.
Speaker Change: To to get more eventually more benefits.
Speaker Change: But those benefits we already have today.
Speaker Change: With the balance sheet recognition by a financial partner.
Speaker Change: Financial partners we.
Speaker Change: We can we've seen you've seen the results of our $1 2 billion financings in 2024.
Speaker Change: At very good terms, so we continue to be able and and for example on the battery storage financings of Swiss cheese, where dental largest financings of of storage in Canada.
Speaker Change: So you certainly you've seen that we're able to to continue to fund our growth without the investment grade rating to investment grade was putting constraint and will continue to reach for that but probably delayed at by.
Speaker Change: By two or three years.
Speaker Change: Okay understood. Thank you guys.
Speaker Change: Okay.
We are now going to proceed with our next question.
Speaker Change: And the next question comes from the line of Maag ELV from CIBC. Please ask your question.
Speaker Change: Yeah. Thanks, good morning Arun.
Speaker Change: I just wonder if oxymoron.
Speaker Change: Our asset recycling commentary.
Speaker Change: How would you say those views have evolved over the last couple of quarters in terms of how firm of a plan you want to put in front of investors liquidity.
Speaker Change: Is there potential for sort of mcarthur rotation target like some other renewable companies put out there to try to show confidence to the market around different funding options and runway for growth for the next couple of years.
Mike: Well, Mike that I'd make first.
Speaker Change: Certainly we will consider that in our presentation as we said.
An investor day upcoming in the next next few months.
Speaker Change: We certainly have a clear plan of that criteria.
Speaker Change: When we want to sell down assets the valuations that we see in those assets.
Speaker Change: Whether as I said, it would be a partial divestitures or complete divestitures.
And we can certainly gives you more color on that in the at the Investor Day.
Speaker Change: We have strong confidence in and the additional value that we can extract from from some of our assets at the goods at the right timing.
Speaker Change: And will that will put that on there.
Speaker Change: And a key punch list for the for the Investor Day.
Speaker Change: For example in the on the Hydro assets would you have already had some sort of indicative sense from either potential buyers around valuations on those assets I'm just understand how much confidence at this point you could put forward in terms of around where you think proceeds could come in over the next couple of years.
Speaker Change: Yeah, we have we've had well weekend Shirley and I'm sure you can as well look at look at comps.
Speaker Change: At recent transactions.
Speaker Change: Hydro assets are a are in demand.
Speaker Change: And as.
Speaker Change: As I said, we felt we started a process.
Speaker Change: Early at this point early indications, but.
Speaker Change: We're quite confident in the AR and the possibly too.
Speaker Change: Two two.
Speaker Change: Obtain significant value out of those assets.
Speaker Change: Sounds good.
Speaker Change: Next question for maybe both of you actually.
Speaker Change: Just in terms of the announcement this week and kind of sit there now there's of your side theres not that many other public companies out there you know the question around scale comes up when you think about minority asset sales or different types of partnerships is there anything else. He starts to change your view in terms of what you would maybe want from a partner from from auction.
Speaker Change: The Audi around different things and there'll be different things on procurement. So just curious in terms of your.
Speaker Change: Spreading asset sales across a number of partnerships versus starting to think about maybe more of a strategic alignment one partner going forward.
Mark: Yeah, Hi, Mark.
Speaker Change: The first thing.
Speaker Change: The transaction reflects the strong value of renewable energy companies and the fact that the stock are too low in the sector presently.
Speaker Change: The demand is high.
Speaker Change: The possible.
Speaker Change: So the return are interesting.
Speaker Change: And the private investors core sophisticated.
Speaker Change: Understand these value that was the case with VIP in France that is the case in this in this situation.
Speaker Change: And in other situation during the last 24 months.
Speaker Change: So does that change.
Speaker Change: For us significantly the answer is we are always evaluating the right way to reduce our cost of capital being.
Speaker Change: Nimble to do the project have the financing we are aligned.
Speaker Change: As management also to do the best for the shareholders of the company and for the client and the partner so so theres different options.
Speaker Change: Of partnership.
Speaker Change: And.
Speaker Change: Would not see notes with.
Speaker Change: Our global option also.
Speaker Change: Okay alright. Thanks.
Speaker Change: We are now going to print thank you ward.
Speaker Change: We are now going to proceed with our next question.
Speaker Change: The questions come from the line of Nelson <unk> from RBC capital markets. Please ask your question.
Great. Thanks first question is just more of a clarification on the NCI V. So you obviously haven't been too active on buybacks in the past.
D C R and CIB as being something that you all.
Speaker Change: Definitely use and you set an internal target to purchase repurchase a certain number of shares or is this.
Speaker Change: More of a I.
I guess, an option, where you could potentially buy back some shares.
Speaker Change: If the shares stay at the current level, our fall below a level.
Nelson: Hi, Nelson. Thank you can we can certainly say, yes to both I'd say, it's an option that we will definitely use.
Speaker Change: So.
Speaker Change: And we're not this is this is not something theoretical this is something that we're putting in place and as I said, we are we believe that our stock price is undervalued we'll.
Speaker Change: We'll continue to execute our plan.
Speaker Change: To make sure that we demonstrate to the market that are there different evaluation.
Speaker Change: Creation that we can do through our.
Speaker Change: Our growth plan and are and will continue to do that and execute.
Speaker Change: But also a liberal use that additional tool, which can provide a good return to our shareholders.
Speaker Change: Okay, Great. That's clear and then second question is relating to the growth path. So there are.
Speaker Change: I think 243 megawatts in the secured projects.
Speaker Change: How much of that do you guys see falling into 2026 or are they mostly.
Speaker Change: 2027.
Speaker Change: The projects I think that the big one there is denied sharla charlevoix.
Speaker Change: Is that more of a 2027 project.
Dinesh: Yes, Dinesh Hi, Nelson Dinesh Olive wise is a 'twenty 'twenty seven project and we expect that.
Speaker Change: And the other one that I mentioned, which is called Danish west will be a 2020 age crude checked.
Speaker Change: Okay Andi, Oxford, the Oxford project is also which is not secured yet but near to be secured is a 125 megawatt battery storage and <unk> is also a 'twenty 'twenty seven project.
Speaker Change: And then we have the mainline Athabasca project also would proceed.
Speaker Change: And time and.
Speaker Change: And after that is going to be the UK. Eventually if if we get something out of that next RFP, but this has longer terms, yes, it's not it's nothing that growth path right now.
Speaker Change: Okay. So 27 and 28 are.
Speaker Change: Filling up nicely.
Speaker Change: And then just one other question I had was on project costs, obviously for accurate you had some.
Speaker Change: Construction delays and some cost issues, but.
Speaker Change: From a I guess average cost per megawatt perspective, I think <unk> is about $3 8 million per megawatt from a construction perspective than as a.
Speaker Change: <unk> project is.
Speaker Change: Closer to I think it's like 2.4 million per megawatt.
Obviously, they are located in different parts of Quebec, but have you just seen at have you recently seen the cost of projects come down significantly or or is it just that the project, there's large economies of scale over there.
Speaker Change: Well certainly certainly the pit project is in a in a different region. So I think as as you pointed out.
Speaker Change: More difficult conditions.
Speaker Change: And.
Speaker Change: With.
Speaker Change: We've had.
Speaker Change: As Patrick mentioned, we've had some.
Speaker Change: Timing and weather a difficult conditions, so that will make it a bit more expensive than the than the average project.
Dinesh: Dinesh season.
Dinesh: <unk> is an extension in a region, where we are.
Dinesh: Or are we already have some assets. So I think that that makes a difference there's a transport shish colton.
Dinesh: More remote region.
Dinesh: More.
Dinesh: It increases our <unk> costs, and our transportation costs among others.
Dinesh: Okay that makes sense and then just last one I'm sure everyone loves to talk about tariffs.
Dinesh: So the the two Ontario projects, our Hagerstown and Pillsbury that are expected to be completed at the end of this year.
Speaker Change: Are all the battery I I guess first of all are you sourcing batteries in the U S. A and if so are they already on site and do you need to source anything else from the U S.
Dinesh: And can you just comment about.
Dinesh: And a potential risks.
Dinesh: Paris being in effect.
Dinesh: And on the acres in silvery project.
We made all the analysis on the tariff risk kids, it's a tesla batteries, but they are already onsite, indeed or near to come so so very.
Dinesh: Very very very limited potential impact vary.
Dinesh: Negligible.
Dinesh: We're doing that on all the project that we have and there is as you know for all companies a lot of noise around this but we're looking we're doing with our risk management team lots of different scenario to see how we can.
Dinesh: Protect us.
Dinesh: There is tariff or and or retaliation and everything you can imagine.
Dinesh: We're doing this is job specific deal on the project under construction, but also the project that will come to with the next months.
Dinesh: Yeah.
Dinesh: Okay, great. Thank you I'll leave it there.
Dinesh: <unk>.
Speaker Change: We are now going to proceed with our next question.
Dinesh: Yeah.
Speaker Change: The questions come from the line of Robert Hope from Scotiabank. Please ask your question. Your line is open.
Robert Hope: Good morning, everyone. Just one question for me.
Speaker Change: So you highlighted the product the discrepancy between the private and public valuations out there.
Speaker Change: But I guess more specifically, how our development pipelines being valued versus operating assets and if there is a discount on U S development pipelines here does this provide an opportunity to accelerate your growth in that region, whether it's on the wind and solar side.
Rob: Hey, good morning, Rob.
Rob: Clearly in my in I think you know that the.
Rob: The pipeline today and the stock price is there is no value on it that's clear.
Rob: Just to read all you and your all your colleagues does the first point. The second point is there is clearly opportunities.
Rob: In different market, we did with Greek crew some transaction in the UK. There is certainly opportunities in the U S and we're looking to that like we did was in senior G. Three years ago.
Rob: And we have all the partners are still there. We we we consolidated the company Dear similar size of team and project Tat firm could be of interest for us in the important point is in which state.
Rob: In which states and.
Rob: Level of developing Dr. But certainly there is interest in when you look to devaluation of Av against sophisticated investor that we obtained in France.
Rob: I know it was three years ago, but the pipeline and the value of the team was high. So this is speaking about the helix, but there is on the other side opportunities today with people for.
Rob: In Australia, where we where they need a <unk>.
Rob: Larger player to have them to bring their project to two final investment decision and see what the idea.
Rob: So as it's a key it's one of the differences between public and private markets at the moment.
Rob: Cost of capital and the valuation of aspects in addition to upgrading.
Rob: <unk> assets.
Rob: Is is.
Rob: More positive and valued in the end by the private investors.
Rob: And the private investors have quite a large sums of money to invest in the renewable sector.
Rob: Okay.
Rob: Thank you.
Rob: Welcome. Thank you.
Rob: We are now going to proceed with our next question.
Speaker Change: And the question comes from the line of Ben Jimmy Fallon from BMO. Please ask your question. Your line is open.
Alright. Thanks.
Speaker Change: I wanted to go back to your comment around impractical.
Speaker Change: Asset sales and.
Speaker Change: And maybe I missed it Eric.
Speaker Change: Our prepared remarks.
Speaker Change: Are you.
Speaker Change: Are you pushing this more.
Speaker Change: So a funding need.
Speaker Change: Need that Youre anticipating.
Speaker Change: Years ahead or is this just a simple <unk>.
Speaker Change: <unk> exercised that youre moving forward with.
Speaker Change: The you mean.
Speaker Change: The asset recycling.
Speaker Change: Is your question well I'll try to answer and let me know if that my answer is.
Speaker Change: Okay.
Speaker Change: Asset recycling for us as part of the both the financial and the.
Speaker Change: The general strategy I E.
Speaker Change: Having partners in some assets.
Speaker Change: That's capital to our our growth program because partners are not only buying something but they're also providing additional capital for growth like it like in France, where VIP contribute 30% of capital too to the growth of our platform there.
So it's part of the strategy overall, but it's also a financial tool and it's also.
Speaker Change: Currently and has been for a while and arbitrage opportunity.
Speaker Change: So it's we it's important to for us to select the right partners, because we want to be with them for the long term. So our partners are important.
Speaker Change: Devaluation that it provides and the cash is also important I don't know if that answers your question.
Speaker Change: Yes, no a designated extend on that.
Speaker Change: On your backlog.
Speaker Change: Right now.
Speaker Change: The thought process that you can fund that with Itc's in free cash flow.
Speaker Change: Is there a wedge there for asset sales to fill the gap.
Speaker Change: That's new or is the prior guidance is intact and this is just additional.
Speaker Change: Liquidity that you kind of move forward with.
Speaker Change: It's part of the it's part of the financing of the overall growth program is as you know where our growth is accelerating we are we have a large ship larger pipeline, we're seeing more growth opportunities in our markets as Patrick described.
Speaker Change: So to us it's a good way to essentially for for to demonstrate to shareholders.
Speaker Change: And that we're funding at the lowest cost of capital.
Speaker Change: Instead of issuing equity we're finding additional funds from partners at valuations that are accretive to our current shareholders.
Speaker Change: Okay I got you.
Speaker Change: And then just some of the comments here around the news this week and it looks like here you go.
Speaker Change: The benefit from that.
Speaker Change: In other ways more south hydro assets and other assets that you see.
Speaker Change: But when you think about the public versus private debate.
Right now as you think about your business.
Speaker Change: Or to hear your future going forward.
Speaker Change: Is there really a strong case, even stay public at all because.
Speaker Change: Because when I look at the private I'll try and editors checks a lot of the boxes now.
Speaker Change: Now in terms of your.
Speaker Change: Our need for capital your growth going forward like what is what is the huge benefit of being public at this point in time.
Speaker Change: And maybe you could just talk generically two of that is more helpful.
Speaker Change: Yes.
Speaker Change: As you May know I've been on the private side than on the CFO of a publicly listed companies I know of both worlds.
Speaker Change: And both both the types of vehicles have their pluses and minuses.
Speaker Change: Having a having a diversified base of shareholders in an organized market like the public markets.
Speaker Change: It creates a bit more volatility as we've talked about but certainly it's a continuous way too.
Speaker Change: Access a market, which is potentially deeper at the end and just having one shareholder.
Speaker Change: So we are listed company and as we mentioned, we find ways to tap into the private market valuations at the same time.
Speaker Change: I think the benefits also of being a publicly listed company. So there's pluses and minuses, but where we are a listed company.
Speaker Change: Sure.
Speaker Change: Okay got it yes, it is at that balancing approach.
Speaker Change: Just one last one Patrick mentioned diversification, helping you.
That makes sense.
The most of the wind right now and you saw hydro become more win.
Speaker Change: Can you still achieve that through geographical diversification as has the data suggests that that gives you that or.
Speaker Change: Sure the data is actually contradicting the diversification approach.
Speaker Change: No.
Speaker Change: Really with the with the wind in different area you can see it in the vs versus U S, sorry versus Canada versus France to last quarters.
Speaker Change: Was already well diversified the UK investments you know today, we are I was mentioning that lampkins under commissioning were already producing.
Speaker Change: More than 60 megawatts nine killed because integrated operation, where we are just allowed to do this but it means that there is a lot of win there and it's it will be.
Speaker Change: Diversification from the French wind in the Kenyan Duane so so that's one point the storage is a very important diversification and finally.
Speaker Change: We are in.
Speaker Change: We have a strong <unk>.
Speaker Change: <unk> in New York, and it's all new.
Speaker Change: Solar and this will be another diversification disappointed on.
Speaker Change: On the hydro.
It will be since there is no development in hydro if you look forward to 'twenty three it will become smaller and smaller in the revenue and the casualty EBITDA to cash flow and so the diversification advantage of hydro will be smaller and that's the reason why coming.
Speaker Change: Back to the.
Speaker Change: The benefit of asset recycling is that we can crystallize this value with someone who will be interested to buy these assets and so we get the value, but that we can invest in other things going forward.
Speaker Change: Sure.
Speaker Change: Okay got it thank you very much.
Speaker Change: Thank you.
Speaker Change: Thank you as a final reminder to ask a question. Please press star one and one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one and one again, if you wish to ask a question via the webcast. Please type them into the question box and click submit.
Speaker Change: We are now going to proceed with our next question.
Rupert Mehra: Our question comes from the line of Rupert <unk> from MBS. Please ask your question.
Speaker Change: Hi.
Speaker Change: I was hoping to get an update on your strategy in France. It looks like the pricing there is still pretty strong for you, but I know you have some.
Speaker Change: Short term contracts there that you'll have to think about re contracting soon how's the strategy evolving and can you give us an update on where you're at with your.
Speaker Change: With your contract portfolio and how that might change over the next few quarters.
Yes. There is there is different thing to first is there is the the first impact on.
Speaker Change: The very short term the 18 months, which were exempt of price gap that has an impact because that was the.
Speaker Change: Very beneficiary.
Speaker Change: Last the last 24 months for us so that will come to an end abuse Lee on the other side. There is still strong demand from corporation.
Speaker Change: We have signed to contract in the fall and we have some other options.
Speaker Change: That's that are coming on this side for long term contract and you assets for existing assets, which we're doing also is diversifying the DFT curve there is different.
Speaker Change: TVT or utility kind big big Big reseller of electricity that are interested to buy or electricity at a lower side, it's better to have.
Speaker Change: More than one large buyer, which we have done in the in the 'twenty to 'twenty two when we signed was Expo.
Speaker Change: There is obviously for existing asset the option of Repowering that is depending on the price that we can get from.
Speaker Change: Brownfield PPE versus new Repowering and we have.
Speaker Change: In the last tender you have seen that we have obtained.
Speaker Change: The contract for the extension of a side was also another contract for the Repowering of the site and.
Speaker Change: The return of the reporting are very high because there is lots of things that are already paid into situations. So so we are looking to the different options and the there is there is a lots of options because in Europe.
Speaker Change: Lots of companies, if as BTR target the wants to reduce their scope to it as <unk> and so they have a lot of interest for our.
Speaker Change: Product.
Speaker Change: One more thing too to note also of interest in France is that the budget 2025 was finally adopted.
Speaker Change: And there is no.
Speaker Change: No cap.
Speaker Change: Price cap is not extended in 2025 and no change.
Speaker Change: Yeah.
Speaker Change: For for the.
Speaker Change: This year, so it'll be knowing back neck.
Speaker Change: Negatively from that perspective.
Speaker Change: Yes.
Speaker Change: So a couple of follow ups first of all.
Speaker Change: How how is the spread between the say the the price you might get from a corporate versus the government auction price. How is that looking is it getting more attractive and more short term here, what's the impact on.
Speaker Change: Your portfolio into the next quarter given the.
Speaker Change: The price dynamic that you see.
Speaker Change: Yeah, it's a very sensitive to answer this question as you can imagine so so.
Speaker Change: There is a there.
Speaker Change: There is an interest from corporation, which are driven by reducing their scope two and sometimes also by marketing the.
Speaker Change: Value that the finding in these so so so it's very difficult to commend.
Speaker Change: And sorry, what I think is.
Speaker Change: Are.
Speaker Change: You have to see the government backed contract.
Speaker Change: Yes.
Speaker Change: A very interesting option. If you look to the last price they were very good price coming back to the mid eighties in euro.
Speaker Change: And in the reflects is that if we sign a corporate PPA.
Speaker Change: It's because we have a better option by signing a corporate PPA for a specific project.
Speaker Change: So that's where I can leave it.
Speaker Change: Okay. That's.
Speaker Change: Very good.
Thank you. Thank you.
Thanks, a lot to Rupert.
Speaker Change: This now concludes our question and answer session. As we have no further questions I will now hand back to Mr. Miller for closing remarks.
Speaker Change: Well, thanks, operator, and thank you everyone for your attention.
Speaker Change: If you have any additional questions you know where to find me 514 to one three ones are off our five I'll make sure we quickly answer your questions.
Speaker Change: Colleen is also with me answering all your questions. So our next call to announce first quarter results will be on Wednesday may 14 at 930, a M, which is usually the case when we ask the AGM the same day.
Speaker Change: So we will send you the invite in advance anyway for that specific day. So I have a nice day, everyone nice weekend and enjoy.
Speaker Change: The nice weather that will come I guess [laughter]. Thank you.
Speaker Change: This concludes today's conference call. Thank you all for participating you may now disconnect your lines. Thank you.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: Yeah.