BUSINESS

Boralex revenue, second-quarter profit hurt by weak water flows in the U.S.

08/08/2012 02:24 EDT | Updated 10/08/2012 05:12 EDT
MONTREAL - Alternative energy producer Boralex Inc. said revenue from energy sales fell 12 per cent to $38.9 million during the seasonally-weak second quarter.

The lower revenue was due to the sale of a thermal electric power plant and a reduced contribution from sales of hydroelectricity, partially offset from improvements at the company's wind and solar operations.

Boralex (TSX:BLX) lost $6.16 million or 16 cents per share for the period ended June 30, compared with a loss of $5.6 million or 14 cents per share a year earlier.

Adjusting for one-time items, it lost $5.5 million or 15 cents per share, compared with $3.7 million or 10 cents per share in the second quarter of 2011.

The Quebec-based company said the quarter was mainly affected by "sluggish water flow conditions in the United States" which trimmed $3.6 million in earnings.

However, it benefited from strong performance of its wind power segment, particularly in France which was helped by a third straight quarter of more favourable wind conditions.

The wind power segment's pre-tax operating income (EBITDA) increased by nine per cent, which partially offset lower profits in its other operating segments.

Pierre Lacroix of Desjardins Capital Markets said the results were slightly below expectations but the long-term outlook remains strong.

Adjusted EBITDA of $19.7 million was below the $21.7 million forecast by analysts. The 16 cents per share loss from continuing operations was double what was expected and slightly worse than last year.

Thermal segment EBITDA was down $900,000 on lower sales from Senneterre and higher gas costs at Kingsey Falls, Que..

"We do not see any longer term implications from the quarterly results; we continue to focus on Boralex’s strong growth profile in the renewable power infrastructure space, punctuated by its recent capacity acquisitions in France, construction projects in Canada and longer term potential prospects in the Quebec wind power market," he wrote in a report.

Boralex operates an asset base with an installed capacity of more than 500 megawatts in Canada, the Northeastern United States and France. It hopes to add more than 550 MW of power independently and with Canadian and European partners by the end of 2015.

On the Toronto Stock Exchange, its shares gained two cents at $8.72 in afternoon trading.