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The Ubika Research Cleantech Stock Watchlist
| Boralex Inc (T.BLX) |
| Company Name: |
Boralex Inc |
| HQ Location: |
Kingsey Falls, Quebec |
| Company Website: |
www.boralex.com |
| Shares Outstanding |
37.74 Million |
| Market Cap: |
$392.1 Million |
| 52 Week Range |
$5.00 - $10.98 |
| Average Daily Volume |
38,000 |
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Share Highlight / 1-Year Stock Chart
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Business Overview
Boralex Inc. (Boralex) is a private electricity producer whose core business is the development and operation of power stations that run on renewable energy. It owns and operates 21 power stations with a total installed capacity of 351 megawatts (MW) in Canada, in the Northeastern United States and in France. Boralex operates seven wind farms, including 68 wind generators, with a total installed capacity of 108 megawatts. In addition, it is developing major wind power projects in Canada, including Seigneurie de Beaupre wind farms in Quebec and Thames River wind farm in Ontario. Boralex has seven thermal power stations, with a total installed capacity of 218 MW. The Company has six thermal power stations located in the United States with a combined installed capacity of 204 MW and also operates a 14 MW natural gas cogeneration power station in France. Boralex also manages ten power stations in Quebec and the Northeastern United Sates with a total installed capacity of 190 MW.+ More info
What is interesting?
- Boralex makes money primarily by selling the renewable power it produces. The biggest percentage of revenue currently is from selling wood residual thermal power. Boralex has so far been able to finance new power projects without significant equity dilution. It has a proven track record of finding financing partners which is a key success factor in the development of renewable power projects. Fastest growth in revenue is expected in wind power.
- One of the few profitable cleantech companies with real revenues. The revenues for 2009 fell by 6.8 % compared to 2008, mainly due to cheaper electricity prices. Even in a difficult year like 2009, the company was profitable.
- Company derives most of the revenue from electricity sales and over 60 % percent of production capacity is covered by long term contracts.
- Company has expertise and experience in multiple sectors of the renewable energy sector; Wind, Hydro and wood-residue and natural gas thermal power plants. This offers investors diversification and makes the company less dependent on one field.
- BLX formed strategic partnership with cube infrastructure fund (CUBE), which acquired 16 % of BLX’s European assets to raise capital and accelerate its development in the renewable energy segment in Europe.
- With projects under development for almost 300 MW of which 100 MW is to be commissioned in fiscal 2010, the company is in good position for future growth.
- BLX’s expertise and knowhow it acquired in France by developing and running wind farms can be successfully used in the US, Canada and other European countries. The company is planning to do the same and to increase its installed capacity in wind from current 108 MW to 500 MW in 5 years.
- With many governments offering incentives to develop and run renewable power plants, BLX is in good position to take advantage and solidify its position as a leader in renewable energy power plant development and maintenance.
- The company is taking advantage of the green energy act incentives in Ontario. Ontario is now among the most attractive jurisdictions in North America for renewable power. By the end of 2010 the company is expected to have 90MW of wind power in Ontario through the Thames river wind farm. The company has tied up the financing for this project.
- Capitalizing on its expertise and experience in the development and operation of hydroelectric power stations, BLX is planning to expand its total installed capacity to 150 MW within three to five years in hydro power.
Risks
- Business is capital intensive and project execution risk is always present in executing new power projects.
- Due to the long time period required to develop and operate a power plant, the company is always in need of cash to invest for which the company has to tap capital markets or take on debt. The margins and growth is dependent on the ability to finance new projects at advantageous financing rates.
- Up till now only 50 % of the installed capacity from wood residual power plants qualifies for US Renewable certificate (REC) programs, With high financial benefits and subsidies on stake, the company has to quickly upgrade its existing plants to ensure it qualifies for REC benefits. This will take time and investments.
- By its very nature renewable power economics is tied up to government incentives and subsidies. This can change with time as is seen now in Germany and Spain which reduced incentives for renewable power impacting the valuation of companies exposed to those markets.
Note: This Clean Tech stock watchlist is brought to you by SmallCapPower analyst "Raj Ravindran"
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