Boralex sees 9% production increase in Q3 2025 but faces EBITDA decline; strong project pipeline fosters optimistic long-term outlook.

OPERATOR - (00:01:04)

Bonjour, mesdames et messieurs. Je remets maintenant la parole à Colleen de Siouxmont, Directrice des Relations Investisseurs de Boralex. Good morning ladies and gentlemen and welcome to Boralex third quarter 2025 financial results conference call. Note that all lines are in a listen only mode. Following the presentation, we will conduct a question and answer session in which financial analysts, shareholders and investors will be invited to ask their questions by pressing Star one and one their telephone and wait for the to be announced or by using the Q and A box on the webcast. Also note that the call is being recorded for webcast participants. 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 Venture, Senior Advisor, Public affairs and External Communications at Boralex. Her contact information is provided at the end of the quarterly press release. I would now like to turn the conference over to Colleen de Siouxmont, Director Investor Relations for Boralex. Please go ahead.

Colleen de Siouxmont - Director Investor Relations - (00:03:12)

Thank you Operator and good morning everyone. Welcome to Boralex 3rd Quarter Results Conference call. On today's call, Patrick De Cotis, our President and Chief Executive Officer, will provide an update of our business. Afterwards, Stephane Milo, our interim Executive Vice President and Chief Financial Officer, will present the financial highlights of the quarter. Then we will be available to answer your questions. During this call we will discuss historical as well as forward looking information. When talking about the future, there are a variety of risk factors that have been listed in our different filings which can materially change our estimated results. These documents are all available for consultations on Sedar. Mr. De Cotis will now start with his comments. Please go ahead Patrick.

Patrick De Cot - President and Chief Executive Officer - (00:04:05)

Thank you Colleen 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. The total combined production for the third quarter increased by 9% compared to the same period of 2024, primarily driven by the contribution of newly commissioned sites in Europe. 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, the situation completely changed in the third quarter. Conditions in France, while still below expectations, were more favorable than in North America combined. EBITDA was 108 million, down 1 million compared to Q3 2024. 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 continue to make progress across our development project portfolio, adding 395 megawatt of new project. Additionally, for Covington solar project in the United States reached the secured stage, adding 250 megawatt ac to our growth path. This quarter is also marked by a significant headway in construction and commissioning of major projects in Canada. We now have 3.4 gigawatt of assets in operation in our four key geographies and 558 megawatt of projects under the construction and ready to build stage. In particular, the commissioning of the Apuiat wind farm co developed with the INU communities is a key strategic milestone for Boralex. Apuiat is the first wind farm on the Ctenord 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, Apuiat illustrates our vision of sustainable growth and our deep commitment to the energy transition. We would like to thank our team for their resilience, adaptability and focus that were key to deliver this landmark project. During this quarter we also continued to make progress with the construction of our project in Canada. In Ontario, the construction of the two battery storage projects Hagersville and Tilbury is advancing as planned with commissioning scheduled by the end of the year. We were thrilled to share that Hagersville was recognized by the Canadian Renewable Energy Association CANRIA with the innovative Canadian Clean Power Project of the Year Award. This recognition reflects our commitment to to innovation and active contribution to the energy transition. It is part of a series of acknowledgments that highlight our dedication to sustainable development which remains at the core of our business strategy. The Danage Sud 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 energy needs. The upcoming plan Digestion Integre des Resources Energetique expected in April, will provide a detailed assessment of these needs and could introduce more ambitious targets, potentially requiring Hydro Quebec to revise its capacity expansion plans upwards. At the federal level, the latest budget introduced a 15% clean electricity investment tax credit equivalent to the 30% clean technology investment tax credit already available, further enhancing the investment landscape for future projects. In Ontario, the ISO launched its long term 2 RFP LT2 to support new energy and storage capacity. Boralex submitted a proposal during the October energy window and is now advancing preparations for the second phase, the December capacity window for further strengthening our position in this key growth market in the United States. Nyserda launched its 2025 renewable energy solicitation with final results expected in February 2026. 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 with strong growth ambitions over the coming years. The AR7 procurement round is currently open with submission deadlines scheduled between November and January. Our UK team is actively preparing to submit competitive bids in France. Boralex participated in the onshore wind call for tender last July and we are pleased to announce that we were awarded two projects totaling 125megawatts, placing us first in cumulative capacity. Across the tender, 42 projects were awarded out of 90 submission at an average tariff of 86.6 Euro per megawatt hour. This result confirmed our strong position in the French onshore wind market and highlights our ability to deliver ambitious project under competitive conditions. Contract awarded to Boralex will benefit from above the average prices, confirming the excellence of our bidding teams. I will now briefly review the main variances in our development project portfolio and growthpath. The decrease in our development project portfolio was mainly due to the transition of Ford 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 395megawatt of wind and solar project in the early and mid stage. In total, our portfolio of early mid and advent stages project now consists of project totaling more than 7 gigawatt of wind, solar and battery storage project in the third quarter. Our gross path represents a capacity of 1,030 megawatts reflecting a net increase of 147 megawatt compared to the previous quarter. The transition to the secured stage of Ford Covington solar project in the United States partially offsets the commissioning of Apuiat in Canada. In addition, the Grand Champ repowering wind project in France with a total planned capacity of 14 megawatt move from the secured stage to the construction or ready to build stage during this quarter. This completes my part of the presentation. I will now hand over to Stephane who will provide a more detailed overview of our financial results. I will be back later for the Q and A session.

Stephane Milo - Interim Executive Vice President and Chief Financial Officer - (00:13:04)

Stephane thank you Patrick and good morning everyone. So thanks for being on the call with us. I understand there are a lot of companies reporting today, so a very busy day for all of you. As mentioned by Patrick, the regional 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. Total combined production was up 9% compared to the same quarter last year, mostly driven by the impact of newly commissioned facilities in Europe. 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, 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. 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. Discretionary cash flows amounted to 9 million, down 7 million compared to the third quarter of 2024. I will now provide a more detailed overview of our quarterly production. Production for wind assets in North America was 8% higher compared to the same quarter last year. However, production came in 16% below expectations, mainly due to lower contribution from Canadian wind farms and the delayed commissioning of the Apuiat projects. 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, total production was 19% higher compared to the same quarter last year, but 9% lower than anticipated anticipated mainly due to unfavorable condition in France and a longer than expected outage at a Limekiln wind farm in August to undertake planned work on the transition line. Regarding our balance sheet, available liquidity and authorized financing total $811 million as of September 30, an increase of $288 million compared to the December 31 of last year. 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. Finally, on the CSR front, as we advance our 2030 strategic plan, sustainability remains central to our operation, from workplace culture to community engagement. So this third quarter we made tangible progress across our strategic pillars including project development commissioning and partnership in a dynamic market environment. Our teams continue to execute with discipline and determination. We submitted wind projects under Ontario's LT2 Request for Proposal in October and are actively preparing for upcoming procurement rounds in the uk, Ontario and New York. 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. This completes my part. I will now hand it to the operator for the question period. Thank you.

OPERATOR - (00:17:29)

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. To withdraw your question, please press Star one and one again. Once again, please press Star one and one on your telephone and wait for your name to be announced. If you wish to ask a question via the webcast, please type them in the question box and click Submit. Thank you. We are now going to proceed with our first question and the questions come from the line of Baltage Sisu from National bank of Canada. Please ask a question.

Baltage Sisu - (00:18:05)

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

Patrick De Cot - President and Chief Executive Officer - (00:18:31)

Yeah, essentially all the decrease and 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 a certain percentage of our generation, expected generation with a certain percentage as close as we are to the real time, say okay, so two years in advance or three years in advance we start contracting and then this percentage increase. So we are catching the right price and not speculating on the price. So that is one side for the in operation. What we have too 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. So for example, one of the two projects that we just got awarded is the ALI reporting with an increase from 39 to 104 megawatt project with a great price for the next 20 years. So this is part of also of our strategy in France and considering the limited amount of new project authorization, the repowering strategy is a great strategy that we will continue to have in France to increase the revenue and secure them on the long term. Fair enough.

OPERATOR - (00:20:30)

If I could add. Go ahead, Baltage.

Baltage Sisu - (00:20:34)

Sorry. So I just wanted to add, I think France still has a goal of embedding, I think, 10 gigawatts of onshore wind capacity through 2028. So just given the context of 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 Borax looking at more repowering opportunities in that regard, would that be a fair assumption to see?

Patrick De Cot - President and Chief Executive Officer - (00:21:00)

Yeah. And on top of this, it is clear that there was some instability in the French government the last year. And now we have, you know, beginning of the week when the Prime Minister and the Minister of Energy declared the award of the last tender, they confirm that the next subject on their file is on their desk is the Programation plus Reneuele de Ligne. So it is the planification of the energy and this is needed for renewable industry, but also for the nuclear industry. So there is a lot of pressure in France to release these documents and that is expected in the next weeks or months. He mentioned during the fall. So the fall is not long. And also, as you know, it's taking a bit longer now to, you know, COD project in France. So it's sure that we have a very strong pipeline. But, you know, the year 2026, 2027 are, I would say, lower than what we would, we would like them to be in terms of addition of capacity, but it's ramping up, ramping up after. So there's two things there we will work for sure on efficiency improvement during that period. And also we believe that the situation in France could eventually lead to potential transaction. We'll be looking at this market carefully, knowing that, however, that as we've talked in the past, that UK and US are two areas where we want really to focus in terms of M and A. But France could become an interesting region if the market remains tough.

Baltage Sisu - (00:23:19)

Great. That's great color and just another one for me here, if I may. So it's great to see the 250 megawatt Port Covington solar project advance to the secured stage in the us. Could you share any updates on the other project, the 200 megawatts for two rivers and how discussions are progressing there?

Patrick De Cot - President and Chief Executive Officer - (00:23:38)

Yeah, they are really going ahead next. It's the fact that on the cut of the quarter for conviction, make it probably next month, next quarter, sorry, Two Rivers will do it again. So we're really working close to close on this project and, and consider them to Take a financial and final investment decision beginning of next year. The team are working hard on that.

Baltage Sisu - (00:24:09)

Great, thanks for the COVID and I'll leave it there. Thank you.

Patrick De Cot - President and Chief Executive Officer - (00:24:13)

Thank you. Thank you.

OPERATOR - (00:24:14)

Thanks Batesh. We are now going to proceed with our next question and the questions come from the line of Nelson Ning from RBC Capital Markets. Please ask your question.

Nelson Ning - (00:24:29)

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 wind projects will be repowered to the size of 104megawatts. So that's pretty big for a wind project in France. I think they're usually a lot smaller. Is the, are the size of your developments in France increasing or is this more of a one off size?

Patrick De Cot - President and Chief Executive Officer - (00:25:03)

Thank you, Nelson. 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. So it's a repowering and extension of the project. We are changing. We are today distribution connected. We will be transmission connected. So it's a place where there is room for referring and extension. But it's clear that we're working since years to increase the size of the project. And that's why for example, we have sold some small solar project and we're always looking to increase the size of the project. So this is something that is on our side too.

Nelson Ning - (00:25:51)

Thanks. And then just switching gears a bit. So you announced that you've entered into a five year contract for the 50 megawatt Milo Wind project in New Mexico. I think when you bought the portfolio in New Mexico and Texas, a few other projects were either merchant or going to be merchant in a few years 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 market? I presume power prices have moved higher or demand has moved higher given there's a lot of data center talk in that region.

Patrick De Cot - President and Chief Executive Officer - (00:26:46)

Yeah, you're right. And we have some inbounds on customers and potential partners on this project too. So the team is working like anywhere in Boralex to optimize the asset value. And so this is the case in, in New Mexico and ercot, generally speaking.

Nelson Ning - (00:27:13)

Okay, great, thanks. I'll leave it there.

Patrick De Cot - President and Chief Executive Officer - (00:27:16)

Thank you. Thank you, Nehsad.

OPERATOR - (00:27:20)

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. 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. We are now going to proceed with our next question and the questions come from the line of Mark Jarvi from cibc. Please ask a question.

Mark Jarvi - (00:27:46)

Thanks. 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 Boralex on these gigawatt scale wind cooperative projects?

Patrick De Cot - President and Chief Executive Officer - (00:28:04)

Yeah, essentially we are, you know, there is some say, rumors in the market that it could be. It could be soon, but we will see what Hydro Quebec and the government will decide going further. It's sure that there is some interesting factors somewhere which are the fact that the export will start in New York next April. I think the export to Massachusetts will start in December. So all this will increase the demand somewhere in Quebec. So we're doing our job as much as possible to be prepared to be the good partner of ADREW Quebec on this project. And we're also preparing us if there is RFP for 350 and under RFP that Hydro Quebec will do the classical procurement process. We are also ready to bid project there. So we are working on this.

Mark Jarvi - (00:29:16)

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?

Patrick De Cot - President and Chief Executive Officer - (00:29:30)

Yeah, I think 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, 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. 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. So we should be prepared for both. Okay.

Mark Jarvi - (00:30:07)

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. 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?

Patrick De Cot - President and Chief Executive Officer - (00:30:30)

Yeah, this is something we are monitoring, but we're not seeing that as a big risk presently. Okay, thanks. Thank you.

OPERATOR - (00:30:48)

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.

UNKNOWN - (00:30:58)

Good. Maybe a point before we. Oh, is there another question?

OPERATOR - (00:31:05)

No, we have no question.

UNKNOWN - (00:31:06)

Operator. Okay.

Stephane Milo - Interim Executive Vice President and Chief Financial Officer - (00:31:08)

Maybe a point before Karin doing the closing remarks, I just want to remind everyone that we there's going to be a price effect in Europe for the fourth quarter, but also there's going to be contribution, you know, from COD site, Hagersville, Tillsbury and Apuiat. So just sit there. It's going to be positive and a negative outside of the normal weather conditions. And as always, December, well, Q4 is a strong period for us. So we hope that weather will be on our side for this quarter. Thank you. Well, thank you Stefan and thanks everyone for your attention. Our next conference call to announce fourth quarter results will be held on Friday, February 27, 2026 at 11:00am Have a nice day everyone and a nice weekend.

OPERATOR - (00:32:10)

Thank you. This concludes today's conference call. Thank you all for participating. You may now disconnect your lines. Thank you.