Q3 2025 Boralex Inc Earnings Call

Speaker #2: Bonjour , Madame . La conférence téléphonique portant sur les résultat financier du troisieme trimestre et de l'exercice de de Boralex Inc. . Toutes les lignes sont un modele de monts et la fin de la présentation .

Speaker #2: IL y aura une période de questions réponse au cours de laquelle les analysts , financiers , actionnaires et investisseurs seront invités a leur question on tapon sur étoile .

Speaker #2: Si vous telephone ou on utilisant la boite de questions réponses sur le web , peut également conférences enregistré pour les participants a la web diffusion , vous pouvez également des questions de la conférence , mais si réponses apres la pelle , en fait , des représentants des médias qui ont des questions sont invités a contactée directement .

Speaker #2: Kamil ventures , conseiller principal affair publique et communications externe Boralex Inc. au SDK a la fin du communiqué , trimestriel passer la parole a Coline Desurmont , directrice des relations investisseurs de Boralex Inc. .

Speaker #2: Good morning , ladies and gentlemen , and welcome to Boralex Inc. third quarter 2020 Financial Results conference call . Note that all lines are in a listen only mode .

Speaker #2: Following the presentation , we will conduct a question and answer session in which financial analyst , shareholders and investors will be invited to ask their questions by pressing star one and one .

Speaker #2: Their telephone and wait for the name to be announced , or by using the Q&A box on the webcast . Also note that the call is being recorded for webcast participants .

Speaker #2: You can also ask questions during the conference , but they will be answered by email after the call . Finally , media representatives are invited to contact Camilla Ventures senior Advisor , Public Affairs and External Communications at Boralex Inc. .

Speaker #2: Her contact information is provided at the end of the Quarterly press release . I would now like to turn the conference over to Coline Desurmont director , Investor Relations for Boralex Inc. .

Speaker #2: Please go ahead .

Speaker #3: Thank you . Operator , and good morning , everyone . Welcome to third quarter's results conference call on today's call , Patrick Decostre .

Speaker #3: Our President and Chief Executive Officer will provide an update of our business . Afterwards , Stphane Milot our interim Executive Vice President and Chief Financial Officer will present the financial highlights of the quarter .

Speaker #3: Then we will be available to answer your questions . During this call , we will discuss historical as well as forward looking information .

Speaker #3: When talking about the future , there are a variety of risk factors that have been listed in our filings which can materially change our estimated results .

Speaker #3: These documents are all available for consultations and Sedar . Mr. Duckworth will now start with his comments . Please go ahead . Patrick .

Speaker #4: Thank you Colin , and good morning everyone , and thank you for joining us today . It's a pleasure for me to present our results and achievements for the third quarter of 2025 .

Speaker #4: The total combined production for the third quarter increased by 9% compared to the same period of 2020 . For primarily driven by the contribution of newly commissioned sites in Europe .

Speaker #4: The third quarter clearly reflects the benefits of our diversification by technology and region , while wind conditions in North America had been compensating for unfavorable conditions in France since the beginning of the year .

Speaker #4: The situation completely changed in the third quarter . Conditions in France , while still below expectations , were more favorable than in North America combined .

Speaker #4: MDA was 108 million , down 1 million compared to Q3 2020 . For the increase in production was not sufficient to offset the negative impact of lower prices of short term power purchase agreements in France during this quarter , we continued to make progress across our development project portfolio , adding 395MW of new projects .

Speaker #4: Additionally , forward convictions for convicted solar projects in the United States reached the secured stage , adding 250MW AC to our growth path this quarter is also marked by a significant headway in construction and commissioning of major projects in Canada .

Speaker #4: We now have 3.4GW of assets in operation in our four key geographies and 558MW of projects under the construction and ready to build stage in particular , the commissioning of the windfarm co-developed with the Innu communities , is a key strategic milestone for Boralex Inc. .

Speaker #4: Upwith is the first wind farm in the Côte-Nord region and a powerful symbol of the revival of Quebec wind energy. As we wrap up our 2025 strategic plan and look ahead to 2030, Upwith illustrates our vision of sustainable growth and our deep commitment to the energy transition.

Speaker #4: We would like to thank our team for their resilience , adaptability and focus that they were that were key to deliver this landmark project during this quarter .

Speaker #4: We also continued to make progress with the construction of our projects in Canada . In Ontario , the construction of the two battery storage project , Hagersville and Tilbury is advancing as planned with commissioning scheduled by the end of the year .

Speaker #4: We were thrilled to share that Hagersville was recognized by the Canadian Renewable Energy Association . Can Ria , with the innovative Canadian Clean Project Power project of the year Award .

Speaker #4: This recognition reflects our commitment to innovation and active contribution to the energy transition . It is part of a series of acknowledgment that highlight our dedication to sustainable development , which remains at the core of our business strategy .

Speaker #4: The Danish project is also progressing well as we have started building the wind turbines foundation at the site in recent weeks . Turning to market updates , Quebec continues to show strong momentum in renewable energy development amid rising pressure to meet growing needs .

Speaker #4: Energy needs , the upcoming plan de Integrated Resource , Energetic expected in April , will provide a detailed assessment of these needs and could introduce more ambitious targets , potentially requiring Hydro-Québec to revise its capacity expansion plans upwards at the federal level .

Speaker #4: The latest budget introduced a 15% clean electricity investment tax credit , equivalent to the 30% clean technology Investment Tax credit . Already already available , further enhancing the investment landscape for future projects in Ontario .

Speaker #4: The ISO launched its long term two RFP , LTE two , to support new energy and storage capacity . Boralex Inc. submitted a proposal during the October Energy window and is now advancing preparations for the second phase .

Speaker #4: The December capacity window , further strengthening our position in these key growth markets in the United States . Nicer launched its 2025 Renewable Energy Solicitation with final results expected in February 2026 .

Speaker #4: Boralex is preparing to submit bids supporting its expansion in this market in the United Kingdom , the United Kingdom remains a strategic market for Boralex Inc. , with strong growth ambitions over the coming years .

Speaker #4: The AR seven procurement round is currently open with submission deadlines scheduled between November and January . Our U.K. team is actively preparing to submit competitive bids in France .

Speaker #4: Borealis participated in the onshore wind call for tender last July , and we are pleased to announce that we were awarded two projects totaling 125 megawatt , placing us first in cumulative capacity across the tender .

Speaker #4: 42 projects were awarded out of 90 submissions at an average tariff of €86.6 per megawatt hour . This result confirmed our strong position in the French onshore wind market and highlights our ability to deliver ambitious projects under competitive conditions .

Speaker #4: The contract awarded to Boralex will benefit from above-average prices, confirming the excellence of our bidding teams. I will now briefly review the main variances in our development project portfolio and growth path.

Speaker #4: The decrease in our development project portfolio was mainly due to the transition of forward Covington Solar project to the secure stage . The disposal of a portfolio of small solar projects in France and the revision of the installed capacity of a battery project in Ontario partially offset by the addition of three 95MW of wind and solar projects in the early and mid stage .

Speaker #4: In total , our portfolio of early , mid and advanced stages project No . Consists of projects totaling more than seven gigawatts of wind , solar and battery storage projects .

Speaker #4: In the third quarter , our gross battery presents a capacity of 1030MW , reflecting a net increase of 147MW compared to the previous quarter .

Speaker #4: The transition to the secured stage of Fort Covington solar project in the United States partially offsets the commissioning of appetite in Canada in addition , the Grand Court repowering wind project in France , with a total planned capacity of 14MW , move from the secured stage to the construction already to build stage .

Speaker #4: During this quarter . This completes my part of the presentation . I will now handover to Stephane , who who will provide a more detailed overview of our financial results .

Speaker #4: I will be back later for the Q&A session . Stephane .

Speaker #5: Thank you Patrick and good morning everyone . So thanks for being on the call with us . Our understand there are a lot of companies reporting today , so very busy , busy day for all of you .

Speaker #5: As mentioned by Patrick , the contribution to the production and overall result changed in the third quarter compared to the trend we had observed in the first half of the year .

Speaker #5: Total combined production was up 9% compared to the same quarter last year , mostly driven by the impact of newly commissioning commissioned facilities in Europe .

Speaker #5: It is important to consider that production in the third quarter of 2024 was weaker than expected , which explains why the year over year comparison looks good .

Speaker #5: While when we compare to the anticipated production of the third quarter of 2025 , the production is 13% lower . This decrease was due to unfavorable weather conditions in North America for wind and hydro , and to a lesser extent for wind in Europe .

Speaker #5: Our combined EBITDA amounted to $108 million , down $1 million , primarily due to the impact of lower prices of short term contracts in France , partially offset by the commissioning of new assets .

Speaker #5: Discretionary cash flows amounted to 9 million , down 7 million compared to the third quarter of 2024 . I will now provide a more detailed review of our quarterly production production for wind assets in North America was 8% higher compared to the same quarter last year .

Speaker #5: However , production came in 16% below expectations , mainly due to lower contribution from Canadian wind farms and the delayed commissioning of the projects .

Speaker #5: Production from hydro assets was 15% lower than last year , and 16% lower than anticipated , mainly due to unfavorable weather conditions in the United States , production from solar assets in the United States was 3% higher than the same quarter last year , but 9% lower than anticipated in Europe .

Speaker #5: Total production was 19% higher compared to the same quarter last year , but 9% lower than anticipated , mainly due to unfavorable conditions in France and a longer than expected outage at a lime kiln .

Speaker #5: In August, we undertook planned work on the transmission line related to the wind farm. Regarding our balance sheet, we have available liquidity and authorized financing totaling $811 million as of September 30th, an increase of $288 million compared to December 31st of last year.

Speaker #5: Total debt increased to 4.4 billion , with project debt accounting for 87% of the total during the quarter , we continued to advance our financing strategy in support of our growth initiatives and capital diversification in France , we have repaid our construction facility following the previously announced incremental tranche of $164 million added in July under the term loan of two wind farm portfolios .

Speaker #5: Finally , on the CSR front , as we advance our 2030 strategic plan , sustainability remains central to our operation from workplace culture to community engagement .

Speaker #5: So this third quarter , we made tangible progress at across our strategic pillars . Pillars . Sorry , including project development , commissioning and partnership in a dynamic market environment .

Speaker #5: Our teams continue to execute with discipline and determination . We submitted wind projects under Ontario Lt2 request for proposal in October , and our actively preparing for upcoming procurement rounds in the UK , Ontario and New York .

Speaker #5: With a strong development project portfolio , growing demand across our markets and solid financial flexibility , we are well positioned to deliver on our strategic objective and create long term value for investors .

Speaker #5: This completes my part . I will now hand it to the operator for the question period . Thank you .

Speaker #2: 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 .

Speaker #2: To withdraw your question, please press star 1 and 1 again. Once again, please press star 1 and 1 on your telephone and wait for your name to be announced.

Speaker #2: If you wish to ask a question via the webcast , please type them in the question box and click submit . Thank you .

Speaker #2: We are now going to proceed with our first question. And the questions come from the line of Portage Sizhu from National Bank of Canada.

Speaker #2: Please ask a question .

Speaker #6: Hey , good morning and thanks for taking my questions . So just on the front strategy , could you provide any incremental updates or share your current view thinking regarding the French strategy , particularly in relation to contracts rolling off and your views around recontracting repowering or potential sell downs , which is notable in light of the announcement from from yesterday .

Speaker #7: Yeah .

Speaker #4: Essentially the the you know , all all the the the the the decrease at the end of the contract that we signed in 2022 was known and scheduled and then we have a clear path and strategy to say we want to contract the price going forward .

Speaker #4: A certain percentage of our generation expected generation with a certain percentage as close as we are to the to the , the real time , say , okay , so two years in advance or three years in advance , we start contracting and then this percentage increase .

Speaker #4: So we are catching the right price and not speculating on the price . So that is one one side for the in operation .

Speaker #4: What we have to and you have noticed that we have a reporting strategy that we had before in 2020 and 2021 that we put on the shelf a little bit during the high price period and the high price window , and now we have that again .

Speaker #4: So , for example , one of the two projects that we just got awarded is the Ali reporting with an increase from 39 to a 104 megawatt project with a great price for the next 20 years .

Speaker #4: So this is part of also of our strategy in France . And considering the limited amount of new projects authorization , the reporting strategy is a great strategy that we will continue to to have in France to increase the revenue and secure them on the long term .

Speaker #6: Fairness .

Speaker #5: If I could add , go ahead . Yeah .

Speaker #6: Sorry . So I just wanted to add , I think France still has a goal of embedding . I think ten gigawatts of onshore wind capacity through 2028 .

Speaker #6: So just given the contracts are rolling off and to Patrick's comment that it's more beneficial to repower just given the land and such that we could probably see Ball.x looking at more repowering opportunities in that regard , would that be a fair assumption to to see ?

Speaker #4: Yeah, and on top of this, you know, it is clear that there was some, would say instability in the French government.

Speaker #4: The last , the last year . And now we have , you know , beginning of the week when the , the , the Prime Minister and the minister of , of Energy .

Speaker #4: Declared the award of , of the last tender , they confirm that the next subject on their file is on their desk is the programmation .

Speaker #4: So it is the the the planification of the energy . And this is needed for renewable industry , but also for the nuclear industry .

Speaker #4: So there is a lot of pressure in France to release this documents . And , and that is expected in the next weeks or months .

Speaker #4: He mentioned during the fall . So the fall is not long .

Speaker #5: And also but it's it's as you know , it's taking a bit longer now to , you know , the project in France .

Speaker #5: So it's sure that we have a very strong pipeline . But , you know , the year 2026 , 2027 are , I would say , lower than , than than what we would we would like them to be in terms of , you know , addition of capacity .

Speaker #5: But it's ramping up , ramping up , ramping up after . So there's two things there . We will work for sure on efficiency improvement during that period .

Speaker #5: And also we believe that the situation in France could could eventually lead to potential , you know , transaction will be , you know , looking at this market carefully , knowing that however , that , you know , as we've talked in the past , that UK and US , you know , are ready two areas where we want really to focus in terms of M&A , but France is could become , you know , an interesting , you know , region if , if the market is remains tough .

Speaker #6: Great . That's great color and just another one for me here . If I may . So it's great to see the 250 megawatt forthcoming solar project , advanced to the secured stage in the US .

Speaker #6: Could you share any updates on the other project, the 200 MW for Two Rivers, and how discussions are progressing there?

Speaker #4: Yeah , there are really next going ahead , next . It's a fact that on the cut of the quarter for Covington , make it probably next month .

Speaker #4: Next quarter sorry of two rivers will do it again . So so it's we're really working close to close on this project . And and consider them to to to to take a financial and final investment decision beginning of next year .

Speaker #4: The team are working hard on that . .

Speaker #6: Great . Thanks for the cover and I'll leave it there . Thank you .

Speaker #4: Thank you , thank you .

Speaker #5: Thank you Bhavesh .

Speaker #2: We are now going to proceed with our next question . And the questions come from the line of Nelson Ning from RBC Capital Markets .

Speaker #2: Please ask your question .

Speaker #8: Great . Thanks and good morning , everyone . I had a quick follow up on your French project commentary . So I think , Patrick , you mentioned that one of your win projects will be repowered to the size of 104MW .

Speaker #8: So that's pretty big for a wind project in France . I think they're usually a lot smaller , like our like is the are the size of your developments in France increasing or is this more of a one off size ?

Speaker #7: Yeah .

Speaker #4: Thank you . It's a good question . In 2005 , Ali was the largest site in France for all the market , and it seems that it will continue .

Speaker #4: So so so it's a it's a repowering and extension of the project . We are changing . You know , we were we are today distribution connected .

Speaker #4: We will be transmission connected . So so it's a it's a place where there is a room for reporting an extension . But it's clear that we're working since years to increase the size of the project .

Speaker #4: And that's why , for example , we have sold some small solar projects and we're always looking to increase the size of the project .

Speaker #4: So this is something that is that is on our side to .

Speaker #8: Thanks . And then just switching gears a bit . So you announced that you've entered into a five year contract with the for the 50 megawatt Milo Wind project in New Mexico .

Speaker #8: I think when you bought the portfolio in New Mexico and Texas, a few other projects were either merchant or going to be merchants in a few years.

Speaker #8: I think . Is it Hereford and Longhorn ? Are those facilities still merchant and are there plans to contract them under like medium term contracts and then just finally , could you just talk about the the market , I presume power prices have moved higher or demand has moved higher , given that there's a lot of data center talk in that region ?

Speaker #7: Yeah , that that's .

Speaker #4: You're right . And we have some inbounds on on customers and potential partners on this project too . So , so so the team is working to in like anywhere in Boralex to optimize the asset value .

Speaker #4: And so this is this is the case in , in New Mexico . And Ercot generally speaking .

Speaker #8: Okay . Great . Thanks . I'll leave it there .

Speaker #4: Thank you . Thank you Nelson .

Speaker #2: Thank you . As a reminder to ask a question on the phone , please press star one and one on your telephone and wait for your name to be announced .

Speaker #2: To withdraw your question , please press star one and one again . If you wish to ask a question via the webcast , please type them in the question box and click submit .

Speaker #2: We are now going to proceed with our next question , and the questions come from the line of Mark Jarvie from CIBC . Please ask your question .

Speaker #9: Thanks . Good morning everyone . Patrick , you brought up the Quebec situation . Can you just update us in terms of when you think the next RFPs come and just sort of the status of involvement potentially for Boral on these gigawatt scale wind cooperative projects ?

Speaker #7: Yeah .

Speaker #4: Essentially we are you know , there is some say rumors in the market that that it could be it could be soon . But we will see what Hydro-Quebec and the government will will decide going further , it's sure that there is some on some , some , some interesting factors .

Speaker #4: Somewhere which are the fact that the export will start in New York next April . I think the export into Massachusetts will start in December .

Speaker #4: So all this will increase the the , the , the demand somewhere in Quebec . So , so , so we are we're doing our job as much as possible to be prepared to be to good partner of Quebec on this project .

Speaker #4: And we're also preparing us if there is RFP for 350 and , and under . Our RFP that Hydro-Québec will will do the classical procurement process .

Speaker #4: We are also ready to bid project there . So so we're working on this .

Speaker #9: If you had to say the probability of securing another contract in Quebec , is it more likely on the bilateral negotiations or through the classical RFP process ?

Speaker #7: Yeah , I .

Speaker #4: Think I think I am I am what I'm saying is I am asking the team to work on both scenarios because it's the best way to increase the probability .

Speaker #4: Whichever scenario will come . But I cannot tell you which scenario hydro will decide in terms of first procurement and afterwards . If we will be competitive on both .

Speaker #4: But we're trying to be competitive in both scenarios, and due to all the demand in Quebec, I think potentially both scenarios will come.

Speaker #4: So, so, so we should be prepared for both.

Speaker #9: Okay. And then with the budget earlier this week in Canada, there was mention of potentially introducing domestic content requirements for eligibility for the tax credits.

Speaker #9: Do you see that as a risk, or do you think being a company that's developed in Canada for a long time gives you an edge on that in terms of procurement versus newer entrants to the Canadian market?

Speaker #4: Yeah , this is something we are . You know , you know , monitoring . But but we're not seeing that as a big risk presently .

Speaker #9: Okay . Thanks .

Speaker #2: Thank you . Thank you . We have no further questions on the phone line . So I'll hand back to you for any webcast questions that you may have .

Speaker #5: Good . Maybe a point before we oh , is there another question ?

Speaker #2: No , we have no questions .

Speaker #5: Operator . Okay . Maybe a point before Kevin doing the closing remarks , I just want to remind everyone that we there's going to still be a price effect in Europe for the fourth quarter .

Speaker #5: And but also , there's going to be contribution , you know , from Cod site Hagersville Tilbury and so is there . It's going to be a positive and a negative outside of the normal .

Speaker #5: You know . Weather conditions and and as always December . Well Q4 is a strong period for for us . So we hope that the weather will be on our side for this quarter .

Speaker #5: Thank you .

Speaker #3: Well , thank you , Stefan , and thanks everyone for your attention . Our next conference call to announce will be held on Friday , February 27th , 2026 at 11 a.m.

Speaker #3: . Have a nice day everyone , and a nice weekend .

Speaker #4: Thank you .

Speaker #2: This concludes today's conference call . Thank you all for participating . You may now disconnect . Your lines . Thank you .