Polaris Renewable Energy Q1 2024 Earnings Call Transcript

Quartr
Provided by Quartr
May 2, 2024

There are 7 speakers on the call.

Operator

Please note this conference is being recorded. I will now turn the conference over to your host, Anton Juk. You may begin.

Speaker 1

Thanks, Mike.

Speaker 2

Good morning, everyone, and welcome to the 2024 Q1 quarterly earnings call for Polaris Renewable Energy. In addition to our press releases issued earlier today, you can find our financial statements and MD and A on both SEDAR Plus and our corporate website at polaris rei.com. Unless noted otherwise, all amounts referred to are denominated in U. S. Dollars.

Speaker 2

As well, I'd like to remind you that comments made during this call may include forward looking statements within the meaning of applicable Canadian securities legislation regarding the future performance of Polaris Renewable Energy and its subsidiaries. These statements are current expectations and as such are subject to a variety of risks and uncertainties that could cause actual results to differ materially from current expectations. These risks and uncertainties include the factors discussed in the company's annual information form for the year ended December 31, 2023. As always, I'm joined this morning by Mark Murnahan, CEO of Polaris. At this time, I'll walk everyone through our financial highlights.

Speaker 2

Power generation. During the 3 months ended March 31, 2024, power production was 213,434 Megawatt Hours compared to 217,613 Megawatt Hours in the 3 months ended last year. For Nicaragua, in the Q1 of 2024, production was 117,972 megawatt hours lower compared to the same period last year at 125,930 Megawatt Hours. Moving on to consolidated production in Peru for the 3 months ended March 31 was also slightly lower at 64,578 megawatt hours than the comparative period last year, which totaled 66,334 Megawatt Hours. At our Dominican Republic Kanoa 1 solar facility, we produced 14,530 Megawatt Hours in the 3 months ended March 31.

Speaker 2

This is lower than the Q1 of 2023 due to lower irradiance. For Ecuador, in the Q1 of 2024, average production of 10,223 megawatt hours was similar to production in the comparative period last year. And then finally in Panama, Vista Jiramosas Solar Park production of 6,130 Megawatt hours was greater than management expectations with no comparative to 2023, given the facility went COD in Q2 2023. Revenue. Revenue was $20,600,000 during the 3 months ended March 31 compared to $20,100,000 in the same period last year.

Speaker 2

Net earnings. Net earnings attributable to owners was $4,300,000 for the quarter compared to $4,700,000 for the same period last year. Adjusted EBITDA. Adjusted EBITDA increased to $15,700,000 for the 3 months ended March 31, compared to $15,300,000 for the same period in 2023. Cash generation.

Speaker 2

Net cash from operating activities for the 3 months ended March 31 of $8,700,000 lower than the $10,100,000 for the same period last year, mainly due to lower cash received from Peru as expected due to recognition of unearned revenue. Net cash used in investing activities for the 3 months ended March 31 was $1,300,000 compared to $3,000,000 in the same period of 2023. While the cash usage in the current quarter relates to the Canola 1 optimization project, cash usage in investing activities in the same period last year disbursements were linked to construction of the binary unit in Nicaragua and the Vista Hermosa Solar Park in Panama. Net cash used in financing activities for the 3 months ended March 31 of $6,500,000 is in line with net cash used in financing activities reported last year. Dividend.

Speaker 2

Finally, I'd like to highlight that we have already announced we'll be paying a quarterly dividend on May 24 of $0.15 per share to shareholders of record on May 13. With that, I'll turn the call over to Mark to elaborate on our quarterly results as well as on our current business matters. Thank you.

Speaker 3

Thanks, Anton. Yes, so for the quarter on a consolidated basis, production and revenues were in line with our budget and costs came in slightly below budget. The big one being in Nicaragua, just to give some numbers on a monthly basis. We were 51.6 average megawatts in January and then we were up to 54.6 in Feb and March was 55.7. So a noted improvement from Jan to Feb and March based on call it changing the injection strategy and scheme from what we had going in to November December last year.

Speaker 3

So we did get the expected improvements. And I would say that the levels in February March are levels that we would expect to see for the remainder of the year. Although, it is worth mentioning that as expected or planned in April, we did the major maintenance on one of our turbines, which was fine. It was executed on time and there were no issues whatsoever with the turbines, which is great. But that does represent downtime of about 15, 16 days in April as expected.

Speaker 3

But so that does have an impact on the current quarter. Peru was essentially in line on a total production basis despite the outage at Canxayo, which will be back online later this week. And Doctor was a little bit lower, but Panama was a bit higher. So I would say the kind of solar was on a combined basis was in line with the budget. And Panama in terms of revenues was a bit higher just because spot prices were again higher than expected.

Speaker 3

And we would we do think that those higher prices are likely to continue in Q2 and Q3, but come back down to a more longer term number in Q4 of this year. In terms of the growth projects, the at Kanoa, the optimization is going according to schedule. The most of the CapEx has been spent with the bulk of it actually having been spent in Q4 last year. Some more was about $1,000,000 to $1,500,000 was done in Q1 of this year. Not much left to go on that and that is going according to schedule.

Speaker 3

We would expect that to be done by July. In terms of the larger expansion with the solar plus batteries, we did receive approval to amend the environmental permit in the quarter Q1. So that's great. And then about 4 weeks ago after we had that in hand, we submitted the approval to or submitted for approval to amend the concession to include batteries, which we don't expect any issues with that given that the regulator is pushing for storage on the island. And once we have that, we're ready to go with adding panels and storage, such that we can just provide more energy under the current Canola 1 contract.

Speaker 3

I think it's worth mentioning that the cap costs that we are seeing at this point in time continue to look very good. Panels on the solar panel side, they continue to be excellent. And at least initial quotations on the battery side look very good. So we're happy with where that sits. We just need to call it place the order.

Speaker 3

So we're thinking about 2 to 3 months to get the approval from the concession and then after that we can get moving on the project. I did mention last time that we had signed an LOI on an acquisition. That's a big part of the strategy. We are in exclusivity period as we speak and it's moving very quickly. We hope to have something on that in the very short term in terms of announcing that and explaining what we're doing.

Speaker 3

I would say it very much ties into the strategy of shifting the focus from just straight renewable projects to renewables plus storage. That's a big focus and the acquisition very much is in line with that focus going forward. And so I really think that it will tie things together in terms of the strategy, but also the capital allocation plan. And that plan in terms of capital usage will become much more evident in the short, medium and even longer term. So we are given what we're doing at Kanoa, but also this acquisition, I think we're putting the strategic places pieces together to shift the focus and then really increase, I would say, the opportunity set for us as a company.

Speaker 3

And financially, we're well positioned to go after this given our cash position and reasonably low leverage at this time. I have discussed the possibility to change that in terms of some parent co financing or green bond financing. We're the plan at this point would be to look to do something in September, October timeframe as the repayment for the San Jacinto loan is really Jan of 2025. So we would look to do something call it end of Q3 or early Q4 this year where a use of proceeds would be to repay that loan as well as likely providing capital for the growth projects including the Dominican with a particular focus on the Dominican. So with that, if we can execute that, just even in the very short term, there's significant torque and leverage to our cash flow per share because we don't need to raise any equity to do this.

Speaker 3

And it really has a big impact on the both the operating cash flow and the free cash flow per share that we can generate, which will give us leverage to do more things, which would be increased growth and or potentially increased dividend and or potentially increase share buybacks, which we did do some last year. So I think if we can execute on that, we will have many more arrows in our quiver to do all the things we want to do and that should take place in the back half of this year. So with that, I will open it up for questions.

Operator

At this time, we will be conducting a question and answer session. Our first questioner is Nicholas Boycek from Cormark Securities.

Speaker 1

Thanks. Good morning, Mark. First thing on the cost profile, I think it's kind of an interesting dynamic that you're still seeing less inflation than your North American peers. Can you kind of walk through that dynamic? Why is it you're seeing that?

Speaker 1

And how should we be thinking about it moving forward if it is going to persist?

Speaker 3

Yes. So I would say if we split it up into 2 components, 1 is operating. I'll deal with that first and second cap cost. So on the operating side, I think there's always some efficiencies that we're able to generate in terms of generating more megawatt hours without, call it, adding staff. I think we're also able to do more projects with the current staff we have.

Speaker 3

So that's one dynamic. But I would also just say that I think from an overall labor inflation, we just haven't seen that pressure in the markets we're in nearly the same amount of pressure on that side of things that people are seeing in North America. So I think that's very good for us obviously. And then on the cat cost side, it's worth bringing that into the conversation as well, because we're focused at least in the short term here on the solar side as well as the storage. And even though those are not being manufactured sort of where we are, you're just saying that the call it the increased volumes globally are having a really big deflationary impact on the capital costs.

Speaker 3

So we're we are seeing that as well, which I think is really important. So the projects in Doctor that we're looking at everything is coming in below what we had estimated on the capital on the equipment side of things. And then I would say that it's a much smaller component, but the labor side of those projects is call it coming is in line with what our expectations are.

Speaker 1

Okay. Got it. That makes sense. Thanks. Switching to growth here.

Speaker 1

Obviously, it's good to hear about these acquisitions. But in the investor deck, we've also now got a new project that's like an extra 10 megawatt solar expansion opportunity in Nicaragua, dollars 6,000,000 cost, dollars 1,200,000 EBITDA pickup. That seems highly attractive on a Rogue basic. Can you kind of walk us through what that opportunity is? How it's going to get operational by Q2 25?

Speaker 1

And kind of talk us through that?

Speaker 3

Yes. So that's the that one specifically is we're repurposing some panels that we're going to have post the program in the Dominican. I can tell you that even that cap cost number is highly conservative given that. So we're really the CapEx for that project is just is some inverters and racking really. And so the issues in Nicaragua, we have a reasonable amount of parasitic load.

Speaker 3

So we can do a behind the fence project there. And essentially anything it generates is you're saving the parasitic energy, which is the same as generating more quite frankly at $111 a megawatt hour price, which is a very good price. So that's the idea. And it's not really a greenfield project because we have the site, we have the land, we have the interconnect. So that just seems like a sort of an obvious home for the panels and it should be even better than those economics that we're presenting.

Speaker 1

Okay. That's great. I'll get back in queue.

Speaker 3

Thanks, Matt.

Operator

We now hear from David Quezada with Raymond James.

Speaker 1

Thanks. Good morning. Maybe a first question just on the environment Mark you were discussing in terms of solar panels and just how attractive the costs are for them today. Is there any opportunity for you to maybe capitalize on that situation more broadly like pre buying panels for future projects? I'm just curious if you think that that low cost of panels is something that's going to stick around for a while?

Speaker 1

Or is it sort of a temporary situation brought on by global oversupply?

Speaker 3

Yes. I don't think we have the balance sheet to really do that David to in a way speculate on it. And I would say that that thought definitely occurred to me 18 months ago, 2 years ago, 12 years, 12 months ago, 6 months ago. And if we hadn't done it then, we would have been wrong at least up until now. So I guess my view also is that yes, you're going to have these short term I think we are living a bit of a short term benefit from our perspective given the tariffs in the U.

Speaker 3

S. But I also think when you just look at the total gigawatts installed globally every year that number is going up and up and up. And so I think in the longer term it's that volume that's going to drive things. So I just think we're better to ride that curve practically as well as the practicality of we have an acquisition that's a great use of proceeds. Probably better we do that than speculate.

Speaker 3

As tempting though, I take your point, it is tempting to do that, but I don't think we would.

Speaker 1

Great. No, that's fair enough. I appreciate those comments. And then maybe just a question more broadly and certainly appreciate the comments around the upcoming M and A that sounds exciting. But I'm just curious like in is it a fair way to characterize it that when you think about building versus buying assets that you've got your attractive PPAs in the Dominican and so it makes sense for you to build new projects there.

Speaker 1

But outside of that maybe it's such a buyer's market for operational assets or things that are closer to operational that you might just opt for that just given the multiples you're seeing there? Is that would you agree with that?

Speaker 3

Yes. What I would say, the not yet operational, call it, shovel ready or close to shovel ready, we probably are seeing more opportunities there than ever. And in terms of return opportunities, it's probably the best, just because most call it bigger companies or infrastructure funds are chewing on their own pipelines. And in this sort of rate environment, nobody's really they're more trying to decide what of their portfolio they're going to go with as opposed really expanding it. Other than maybe Brookfield, most people are not getting around all of their own.

Speaker 3

And so we are seeing a lot of, I would call it, late stage development projects that are on the market right now. And I don't think there really is a home for these things. So we are seeing, I'd say, almost a bigger increase in that than we are in, call it, operating projects. And I think the multiples on operating projects has come down, but not as much. Just given that a lot of these are good projects If they have a long term PPA and they're appropriately, call it, levered, but not too much, The multiples have come down, but they're not in a forced sale position, whereas they call it the late stage development a lot of those are forced or being forced.

Speaker 3

So I think for us the opportunity set that we have on that front though is very big. It is, I would say, share price dependent. So as we at the current share price, we have some opportunities that actually work for operating assets, believe it or not, that are accretive. But it's not huge at that at the share price, which is why we're going try to execute the plan we have, call it, without equity. However, if we get a bit of traction on the share price, the opportunity set really starts to grow exponentially, call it, with every dollar in the share price.

Speaker 3

So at 15, 16, 17, there's a lot of operational assets out there now that weren't out there a year ago. So that can work at those prices for us. So when we're always looking at those, we have a huge funnel. It becomes is it a good project and can we do it at a price that works for us?

Speaker 1

Okay. Awesome. Thanks. I appreciate those comments. And then maybe just one last one for me if I could.

Speaker 1

Once you get the concession for the batteries at Canola, what would you say is the remaining at Panola, what would you say is the remaining uncertainty just related to that project? Like what would you call out maybe some key milestones beyond that whether it be final approvals or construction milestones or anything and just where you see the sort of like buckets for uncertainty once these pieces

Speaker 3

are in place? Yeah. I mean that's the really the next one is the big one. And then after that, it would be okay, what's the lead time? It's really then you're putting down payments on the panels and the batteries.

Speaker 3

And what's your who are you choosing? What's your lead time? But based on what we're seeing at least at this point in time lead times are totally reasonable on both of those. So call it 6 months type thing, potentially less. Okay.

Speaker 3

So if that if a lead time dynamic changed significantly, to me that would be I don't see that happening. But I guess that would be the that would technically be a risk out there.

Speaker 1

Perfect. Thanks a lot, Mark. I'll turn it over.

Speaker 3

Okay. Thanks, David.

Operator

We now hear from Rupert Merer with National Bank.

Speaker 4

Hi. Good morning.

Speaker 3

Hi, Rupert.

Speaker 4

Just following up on David's question on the M and A. If you look at the deal that you're contemplating today, would you characterize that as an acquisition of operating assets? Or is it operating assets plus development pipeline?

Speaker 3

So it's operating assets and it has or I would say it has growth opportunities on the site that aren't that do need some development work, but we think that there's growth on the site for sure. But it's that would be growing in an already operating asset.

Speaker 4

And does it give you access to a new region, one where you don't have capabilities today?

Speaker 3

Yes, yes. Sorry, it is a new it would be a new jurisdiction. I would say that we're not per se looking for specific new jurisdictions, but we quite like this one. I think we can handle for sure one more. With this profile, we can handle it.

Speaker 3

It's not a huge, I would say, integration issue. And more importantly, I think it's a market that let's just say that the dynamic that exists in the Dominican, which is a high fossil fuel based market that has a high marginal cost of power and hence is a market where solar plus storage we think works. I would say that dynamic is replicated in this other market, which makes it strategically very attractive to us. So what we're trying to do in the Dominican in addition call it to what we're doing at Kanoa is we are seeing these other late stage development projects that we think we can potentially strike a deal, add them into our own sort of pipeline, but in a way that mirrors what we're doing at Kanoa. I would say that this acquisition hopefully is a mirror image of what I just described that we're doing in the Dominican.

Speaker 3

So it could be sort of foundational for in addition with the Dominican is sort of the basis of where we're going to grow at least in the short, medium term here.

Speaker 4

Okay, great. And with your financing plan, it sounds like you have enough capacity on your the cash on the balance sheet and your potential for adding leverage. You have enough capacity to manage this M and A and your organic growth. Does it leave any room for future M and A at that point? Or is that where you think that your maybe your future M and A will be dependent on market conditions?

Speaker 3

Yes. I think that's a fair way of putting it. I think we could get an acquisition done. We can do what we're doing in the Doctor, all of it realistically with some form of debt or refi. We would have room to do more probably some more of our own development Rupert, but to do some of the larger call it operational asset acquisitions, realistically that would have to come with some equity.

Speaker 4

Okay, great. And then going back to San Jacinto, I think I may have missed one of the comments you had there. Was it you had one of the units down for the 1st couple of weeks of is that just regular maintenance? And can you talk to us about the strategy going forward with San Jacinto? What's the plan this year?

Speaker 4

Where do you go from the 55 in March? And what's your next well enhancement program?

Speaker 3

So we have 2 turbines. The plan right now is we do it's a 2 to 3 week maintenance on 1 turbine every 18 months, okay? So I think the best way to model it is sort of it's an 18 day with the budget. I think we did it in 2016 2015 or 2016. Everything was fine.

Speaker 3

And then so the next one would be around October of next year, okay? And then it would be 18 months. So there would be a year period calendar year where we don't do it. And everything that we've seen is the turbines have been totally fine. So maybe we could go there every 2 years, but let's just assume it's every 18 months for the next little while.

Speaker 3

I don't given the investments, we actually think by doing what we've been doing recently in terms of changing the injection scheme could yield some improvements in the overall output. That will really be the focus this year to see if we can do that. There's for sure no guarantees on that, but that's really a call it a no CapEx plan to see if we can improve the ethylphy in the field and improve the output. And given that we did the binary unit in 2022, which was a reasonable CapEx amount, I really think for the next 3 to 5 years, we're not going to be doing a significant well program. And it's really let's harvest the cash flows and invest them elsewhere in the next 3 to 5 years.

Speaker 3

Potentially year 4 or 5 from now you could look at doing something. But I really think it's that far out.

Speaker 4

Great. Thank you. I'll get back in the queue.

Operator

Our next questioner is Ahmad Shah with Beacon Securities.

Speaker 5

Good morning, guys. Congrats on a solid quarter. I guess most of my questions are answered, but any more color on the cost profile given the strong performance in Q1 or any one offs in Q1 that we should not really extrapolate into the remainder of the year next year?

Speaker 3

Yes. Good question. Actually, I should have mentioned that. So we will have some it's not going to be flat from here on out for the rest of the year. But I think Q2 will be even potentially a little bit lower, Q3, Q4 a bit higher.

Speaker 3

But the average for the year, I'd say Q1 is representative. So it's not as if there was a 1 or 2 one time items in Q1 and then we're going to bump back up and be even higher. So a little bit less Q2, a little bit higher in Q3 and Q4. But for the year, a reasonable number to call it annualize that plus or minus a couple of percent.

Speaker 5

That's great. And I'm not sure if I missed it, you guys mentioned it. What type of assets are we looking at the imminent M and A opportunity? Are you at liberty to disclose that?

Speaker 3

No. Fair enough. It's in the renewable sector. That's all I can say.

Speaker 5

Very much. Well, thanks for asking my questions guys. Congrats on that. Okay. Thanks.

Operator

We now hear from Patrick O'Donnell.

Speaker 6

Hello. Good morning, guys. I'm a retail private investor. I've been following the story for a few years. Just had two questions.

Speaker 6

In terms of broader shareholder appeal with Polaris, I think there's some strong concern about the political corruption credit risk in just say Nicaragua for example biggest asset. Just what can you say about these risks and how you've gotten comfortable with them?

Speaker 3

Yes. So in terms of the credit, I would say, this project in its current form really started in 2013, but on a much smaller scale was producing 5 to 10 megawatts since 2007, 2008 and so more than a 15 year operating history and has received north of call it $750,000,000 in payments without bail. I would say that the credit history, which is now reasonable, we're not talking 2, 3 or 5 years, we're north of a decade here, isn't very good. So I guess what we tend to do is point to that. And the thesis has been borne out, which is that this is a key service.

Speaker 3

So in these developing countries, the electricity sector is actually on a relative basis. It's at the top and it's more important than it would be in North America. So the governments need this the electricity sector to function and I would say that has been borne out in the track record. And it's not just in Nicaragua that I just mentioned, but it's in all these markets. Payment history is very good and because I think it's the power sector.

Speaker 3

So I would really just point to that that, yes, you can have political noise, but the electricity sector is very quiet and it really pays the bills.

Speaker 6

Got you. And one clarification on that is, in terms of a risk of a government repossessing the asset or just reneging on the agreements that you have in place? I mean, what could you say about that type of risk? Or are they just not well positioned to operate a plant like in Nicaragua?

Speaker 3

Yes. I'd say it's more the separated because in terms of the 2 that you mentioned, the first one we are possessing, I'd say we really don't think that is. You haven't seen that in this sector. 1, they would scare up all future investment forever in a sector that they really need, but it also doesn't really generate much for them. And these plants unlike let's say a mine or an oil and gas, this is just a product that's consumed locally.

Speaker 3

It's not a natural resource or national resource that has been exported. So there's no sort of political even benefit. It's pure political cost and it doesn't generate U. S. Hard currency like those other asset classes do.

Speaker 3

So they don't really look at it like a renewable asset in the same way. Where I'd say the second risk that you mentioned is typically that's where we would see the risk more it's more okay you've got a great contract, but they would just want to come and pay you a lesser price. So your risk then, how do you mitigate that? It's you need to look at where your contract price is relative to their alternative sources of power. And we are in markets.

Speaker 3

So Nicaragua give you an example. We're at $111 a megawatt hour. They still have about 50% of their grid is fossil fuel driven and they don't have nat gas yet. So they have a lot of oil and diesel power generation and that comes at about $150 to $180 so a big premium to where we're at. So we're providing them with I think we're in the 2nd quartile most likely in terms of the cost curve.

Speaker 3

So we're providing them with baseload power that's cheaper than their alternatives. So we're not in our minds a target. It's the same thing in the Dominican. We're below. We're well below their alternatives.

Speaker 3

And I would say in Peru and Ecuador, we're right in the middle with our high growth of their average cost, but we're so small that no government is going to take a look. I don't we don't think at our 8 20 megawatt projects and say let's rewrite those contracts. So I think we're really well positioned relative to that given our contract prices on average are below their marginal cost of energy.

Speaker 2

And Patrick just to add our social programs are very good and they're important to the local communities and I think the governments also recognize that.

Speaker 6

Okay, terrific. Yeah, that's great context and feedback on that. A second question was at current share price and the growth plan that you guys are executing on, anything you can say about why more insiders might not be taking advantage of the growth opportunity? I know there's been some insider buying, but any thoughts you can share on that? I mean, you're not a mind reader, but just looking at that from kind of a broader shareholder perspective?

Speaker 3

Yes. I mean, I bought stock recently. I might buy more. I mean, just we also go in long blackout periods I would say. So that's we're now finally coming out of 1.

Speaker 3

But then when you have acquisitions, it actually is quite hard to because the blackout period gets extended. So one, it's hard. But I would say there has been insider buying. And from I would say and I really can only speak to myself personally. I have quite a large position.

Speaker 3

I've invested a lot of capital and I actually have been doing more. That's probably all I can say on that.

Speaker 6

Okay. All right. Thank you.

Operator

We hear once more from Rupert Merer.

Speaker 4

Hi. Just a follow-up on power prices. I see Peru I'm sorry, it was Panama $126 a megawatt hour. You're still spot there, I believe. Do you see any opportunities for locking in contracts at a higher price today given the dynamic in that market?

Speaker 4

Or what's the outlook for contracting in the future?

Speaker 3

Well, so they are they have announced that call it Q3, Q4 they'll be doing a 500 megawatt tender process for renewables only, which includes some existing as well as new plants. So we fully intend on bidding into that. The $64,000 question is what do we think the clearing price is going to be for that. It's not $126 I'll tell you that. We're hearing stuff in the $70 to 80 range.

Speaker 3

I mean, when we originally, I would say, built the plant, we were targeting something with a 7 on it. In terms of the right number to get our return. And so we will bid something. We might bid maybe half the plan. So, yes, I think there not going to be as high

Operator

as where the spot market

Speaker 3

is right now. The market is not going to be as high as where the spot market is right now.

Speaker 4

Can you fit in one And then

Speaker 3

when you Right. And you do it, it would really be if we felt that we wanted to basically take some equity out of that project and recycle it somewhere because that's what a contract would enable us to do. But so it is also somewhat dependent on for instance if we did more of a corporate level bond. I don't know if the need would be as strong as if we stayed on the let's just keep doing project finance to grow the business in which case we would be more eager to get a contract so we could likely take $5,000,000 to $7,000,000 of equity maybe even more out of the project, because we did equity fund that entirely.

Speaker 4

Right. Makes sense. Could you bid any growth projects into Panama?

Speaker 3

Yes. Yes. In fact, we have a list of boat developers and other operators in the country that want to bid some other projects with us in that in the call. And it will come down to certain prices we would love to do. We would love to do more there.

Speaker 3

So we will be. We're just trying to finalize exactly what it is we will be bidding this quarter.

Speaker 4

Great. And then finally, the Kymchilov. So you had a minor landslide there. Are there any costs associated with that other than downtime? And is it covered by insurance?

Speaker 3

Yes. It would be, but the costs are below our deductible. So it's because the cost to repair we think are in the $60,000 to $75,000 range.

Operator

And we

Speaker 3

have $250,000 deductible. So and believe it or not, the actual sort of business interruption insurance, it's a 2 month deductible. But even then, one of the reasons it's not that expensive the way that the contracts work there Rupert is that once you get to your committed energy amount anything above and beyond that is you sell at the spot market up until April 30, which is when their power year ends. But April generally because it's still reasonably the rainy season there, the spot market is low. So that facility had already reached its committed energy early in March.

Speaker 3

And so everything passed everything from the end of March through the end of March to April would have been spot market sales and those were at about $30 So it's not a huge impact to us financially.

Speaker 4

Okay. Thanks,

Speaker 3

Paul. And it's like last year, the spot price on average was over 70, but it's very related to the dry season and the rainy season in that

Operator

We have reached the end of our question and answer session and with it the end of today's conference call. That does conclude today's conference and you may disconnect your lines at this time. Thank you for your participation.

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Key Takeaways

  • For Q1, Polaris generated 213,434 MWh of power (slightly below last year) and reported $20.6 M revenue (+2% Y/Y), $4.3 M net earnings, and $15.7 M Adjusted EBITDA, while declaring a quarterly dividend of $0.15 per share.
  • Operationally, the Nicaragua plant saw improved average output after changes to injection strategy, a scheduled turbine maintenance caused ~15 days of April downtime, and Panama’s Vista Jiramosas Solar Park exceeded production expectations.
  • The Kanoa 1 optimization project is on track to complete in July, with environmental and concession amendments secured to add solar panels and battery storage under favorable global capex pricing.
  • Polaris is in exclusivity on an acquisition in a new jurisdiction that supports its renewables-plus-storage strategy, aiming to close in the near term.
  • A planned debt refinancing or green bond in Q3/Q4 will repay the San Jacinto loan due Jan 2025 and fund growth projects without issuing equity, boosting cash flow per share and strategic flexibility.
AI Generated. May Contain Errors.
Earnings Conference Call
Polaris Renewable Energy Q1 2024
00:00 / 00:00