Polaris Renewable Energy Q2 2024 Earnings Report

Polaris Renewable Energy EPS Results

• Actual EPS: C$0.07
• Consensus EPS: C$0.10
• Beat/Miss: Missed by -C$0.03
• One Year Ago EPS: N/A

Polaris Renewable Energy Revenue Results

• Actual Revenue: $25.59 million
• Expected Revenue: $25.50 million
• Beat/Miss: Beat by +$90.00 thousand
• YoY Revenue Growth: N/A

Polaris Renewable Energy Announcement Details

• Quarter: Q2 2024
• Date: 8/1/2024
• Time: N/A
• Conference Call Date: Thursday, August 1, 2024
• Conference Call Time: 10:00AM ET

Polaris Renewable Energy (TSE:PIF) is a Canadian publicly traded company engaged in the acquisition, development, and operation of renewable energy projects in Latin America & the Caribbean. We are a high-performing and financially sound contributor to the energy transition. The Company's operations include a geothermal plant (82 MW), four run-of river hydroelectric plants (39 MW), three solar (photovoltaic) projects (35 MW) and an onshore wind farm (26 MW).

Polaris Renewable Energy Q2 2024 Earnings Call Transcript

Key Takeaways

• Q2 revenue fell to $18.7 million from $20.8 million and net earnings dropped to $0.985 million versus $4.6 million a year ago, reflecting lower power production.
• Completed planned major maintenance at San Jacinto in Nicaragua on time and on budget, enabling extension of turbine intervals from 12 to 18 months.
• Nearly finished the Canola 1 Solar panel replacement project, which boosted Q2 output and is expected to deliver full benefits in upcoming quarters.
• Secured environmental permit and are close to finalizing the concession amendment for the Kanoa expansion with battery storage, targeting amendment approval this quarter and 12-month execution.
• Actively pursuing acquisitions mirroring Kanoa in scale (5–6% of EBITDA), with deals anticipated to close within the next 60–90 days to drive growth.

Presentation

[Operator]

Please note, this conference is being recorded. I will now turn the conference over to your host, Anton Jelic, CFO at Polaris. Anton, over to you.

[Anton Jelic, CFO at Polaris Renewable Energy Inc.]

Thanks, Jenny. Good morning, everyone, and welcome to our call. In addition to our press releases issued earlier today, you can find our financial statements and MD&A on both SEDAR+ and our corporate website, polarisrei.com. Unless noted otherwise, all amounts referred to are denominated in US dollars. 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 31st December, 2023. I'm joined this morning, as always, by Mark Murnaghan. At this time, I'll walk through our financial highlights.

[Anton Jelic, CFO at Polaris Renewable Energy Inc.]

Power generation. During the three months ended 30th June 2024, power production was 186,887 - 209,982 MWh in the three months ended 30th June, 2023. For Nicaragua, in the second quarter of 2024, production was 114,046 MWh, lower compared to the same period last year at 131,529 MWh. Consolidated production in Peru for the three months ended 30th June was also slightly lower at 42,374 MWh than the comparative period last year, which totaled 51,986 MWh.

[Anton Jelic, CFO at Polaris Renewable Energy Inc.]

At our Dominican Republic Canoa One solar facility, we produced 14,613 MWh in the three months ended June 2024. This is higher than the second quarter of 2023, reflecting enhanced productivity from the newly installed panels. For Ecuador, in the second quarter of 2024, average production of 11,253 MWh was in line with production in the comparative period last year. Finally, in Panama, Vista Hermosa Solar Park, production of 4,600 MWh was greater than our management expectations, with minimal comparative to 2023, given the facility went COD at the beginning of Q2 last year. Revenue was $18.7 million during the three months ended 30th June , 2024, compared to $20.8 million in the same period in 2023.

[Anton Jelic, CFO at Polaris Renewable Energy Inc.]

Net earnings. Net earnings attributable to owners was $985,000 for the quarter, compared to $4.6 million for the same period in the prior year. Adjusted EBITDA. Adjusted EBITDA increased to $13.3 million for the three months ended 30th June , compared to $15.7 million from the same period last year. Sorry, that was a decrease to $13.3 million. Cash generation. Net cash from operating activities for the three and six months ended 30th June was lower than the comparative period last year, mainly due to lower cash received from Nicaragua, as expected, due to scheduled downtime for major maintenance of the facility during Q2, as well as recognition of unearned revenue in Peru.

[Anton Jelic, CFO at Polaris Renewable Energy Inc.]

Net cash used in investing activities for the three and six months ended 30th June was considerably lower when compared to the same periods in 2023. While the cash usage in the current year relates to the Canoa One optimization project and the major maintenance of the geothermal facility in Nicaragua, cash usage in investing activities in the same period of 2023 related to disbursements linked to projects such as the construction of the binary unit in Nicaragua and the completion of the Vista Hermosa Solar Park in Panama. Net cash used in financing activities for the three and six months ended 30th June, 2024, and 2023 are comparable. And finally, dividend.

[Anton Jelic, CFO at Polaris Renewable Energy Inc.]

I'd like to highlight that we have also announced once again, we will be paying a quarterly dividend on 23rd August of $0.15 per share to shareholders of record on 12th August . With that, I'll turn the call over to Mark, who'll elaborate on our quarterly results as well as current business matters. Thanks.

[Marc Murnaghan, CEO at Polaris Renewable Energy Inc.]

Thanks, Anton. So yeah, as Anton mentioned, I would say consolidated production was generally in line in all of the countries except for Peru. Peru was slightly below, and that was just lower hydrology, which I'll get into in a second. In terms of San Jacinto, Nicaragua, was in line, given that we did do major maintenance in April. So, that was planned, major maintenance. And so the results, I would say, were right in line with our expectations, given that major maintenance was completed on time, on budget. And it's just worthy to note that there were no issues with the turbine whatsoever.

[Marc Murnaghan, CEO at Polaris Renewable Energy Inc.]

So everything was good to go, and we didn't encounter any issues there from a turbine perspective, which is great, which does support the fact that we've moved to 18-month intervals instead of 12-month intervals in terms of the major maintenance for each turbine. Now into Peru. As I mentioned, it was a bit lower. Really, what happened is the dry season came just a little bit earlier this year than normally. So that's the reason for the lower numbers in Peru. I would say, incidentally, it's even though it's only a month, but July is marginally ahead of expectations and budget. So it's at least the dry season is not necessarily looking drier than normal.

[Marc Murnaghan, CEO at Polaris Renewable Energy Inc.]

It's just that the season started earlier than it normally does. In terms of the Dominican, it was we were above in the same period last year, principally or all given the replacement program that we started earlier in the year. We were only about 55% done on average through the quarter, but it did help our numbers for sure, as we expected. The actual solar irradiation from Q2 this year compared to Q2 last year was lower. So we likely would have had even higher if it was the same. So just the quarter, the resource was a bit little bit lower.

[Marc Murnaghan, CEO at Polaris Renewable Energy Inc.]

Otherwise, I think we would have been sort of probably another 1,700-2,000 MWh in the Dominican, had it been the same, to try to do a comparable year-over-year. And then lastly, Panama was production was in line, but somewhat stronger prices than we were expecting. And so that helped the numbers for the quarter as well. In terms of the projects and the initiatives, Canoa, the panel replacement is going according to schedule. We should be completed by next week, and that's been done essentially on time, on budget. And so we should expect to start to see, call it, the full benefits of that, starting now.

[Marc Murnaghan, CEO at Polaris Renewable Energy Inc.]

So we look forward to seeing those results in the next few quarters. In terms of the larger project at Canoa, as I mentioned on the last call, we have received the environmental permit to include batteries. We remain in the process with the regulator to amend the concession, but we do think we are getting very close to achieving that. We've had some positive back and forth. So we are moving that forward and hope to have that approval of the amendment this quarter such that we can move forward and get the down payments on the equipment placed. And once we have that, we think it would be about 12 months from there.

[Marc Murnaghan, CEO at Polaris Renewable Energy Inc.]

I would say the panel prices continue the trajectory that they've been on, which is positive. I would say the same comment for the batteries. In terms of acquisitions, which I did mention on the last call, these continue to move forward. We continue to progress on them, and we are working hard, and hopefully we get something across the finish line in the near term. So that is, that remains a key focus. So the combination of what we're working on, the expansion of Canoa plus acquisitions, we think those are, those really are the two main initiatives that we're working on at this time in terms of the growth. We think that that really ties things together in terms of the capital allocation plan.

[Marc Murnaghan, CEO at Polaris Renewable Energy Inc.]

We are hopefully really shifting the focus to renewables plus storage as opposed to just renewables. Financially, we're well positioned to do this, given our cash position and low leverage. I would just quickly mention that we will be planning on extending the normal course issuer bid, which we put in place about 12 months ago. We will extend that, and we may look to do, you know, opportunistic purchases every now and then over the next 12 months. Lastly, I discussed the green bond before. Really for us, this is a Q4 target for this year, which we continue to look towards.

[Marc Murnaghan, CEO at Polaris Renewable Energy Inc.]

The ability to repay, at least in part or in whole, the San Jacinto loan is January of next year. So we think Q4 is a good timing to do something whereby we could have a part of the proceeds to repay that, as well as a part of the proceeds to fund growth initiatives, is a good blend in terms of use of proceeds. It's the right timing. And with that, you know, we think we can significantly increase our cash flow per share without the need to raise any equity. We can continue to grow the business and diversify.

[Marc Murnaghan, CEO at Polaris Renewable Energy Inc.]

And so that's really the big strategic imperatives at this point in time that we're looking to execute on in the back half of the year. So that's it for us. So we can open up for questions.

[Operator]

Thank you very much. We will now be conducting our question and answer session. If you would like to ask a question, please press star one on your phone keypad now. A confirmation tone will indicate that your line is in the queue. You may press star two if you would like to remove your question from the queue. For any participants using speaker equipment, it might be necessary to pick up your handset before you press the keys. Please wait a moment while we poll for questions.... Thank you. Your first question is coming from Rupert Merer of National Bank. Rupert, your line is live.

[Rupert Merer, Managing Director at National Bank]

Thank you. Good morning, everyone.

[Marc Murnaghan, CEO at Polaris Renewable Energy Inc.]

Morning, Rupert.

[Rupert Merer, Managing Director at National Bank]

Mark, it sounds like you're getting fairly close on an M&A transaction. I'm wondering if you can give us some more color on timing that's anticipated there, and what we could expect an acquisition to look like as far as scale or level of accretion goes?

[Marc Murnaghan, CEO at Polaris Renewable Energy Inc.]

Yeah. So in terms of timing, I would suggest that it is taking longer than we had anticipated, but we do hope to have something probably within the next, I'd say 60-90 days. There's some technicalities, just from a structuring perspective, but everything. We continue to move it forward, sort of assuming it's going to sort of come under our wing in that timeframe or, and we're planning for that event. What I would say, though, in terms of the makeup is the best analogy I could give is sort of Canoa, which is, you know, in terms of Canoa, it's about, call it 5-6 of EBITDA currently, with an opportunity to grow and to do on site, I would say.

[Marc Murnaghan, CEO at Polaris Renewable Energy Inc.]

So call it brownfield expansion on site. That could include just more of the same generating capacity on a take-or-pay basis, but that can also include more generation paired with storage. And so that's really what we're going for with the acquisition strategy, because we think having sort of two engines where we can layer in brownfield expansion that's in our own pipeline, but as well as storage, is really what we're trying to do. So we're trying to mirror Canoa with the acquisition.

[Rupert Merer, Managing Director at National Bank]

All right, great. And then with the potential organic growth on that asset, as well as across your portfolio, you're seeing lower costs of solar and batteries. How is the competitive dynamic shifting there? Are you seeing a lot of competition in your target markets? Also, looking at organic growth, do you see any risk of lower power prices in your target market, basically eating up excess returns?

[Marc Murnaghan, CEO at Polaris Renewable Energy Inc.]

No. Probably no to both, just because we're dealing in markets where you still have imported as opposed to local. You know, they don't have local gas markets, so they have to import it. That's the bulk. That's going to be your marginal dollar. It's still going to be, at least for the medium term, your marginal cost. So I don't see pressure there on prices. For us, it would be you would be slipstreaming into existing contracts, at least for the brownfield growth, you'd already have a contract with great prices that we think so, you know, fixed...

[Marc Murnaghan, CEO at Polaris Renewable Energy Inc.]

Well, it's a price that's going up a little bit with inflation, but if you're being able to layer in generation, where the CapEx is actually going down, you know, margins should be going up. So that's, that's kind of what we see in those markets, and I wouldn't say that we see any more competition for that, at least at this point in time.

[Rupert Merer, Managing Director at National Bank]

Great. Well, thanks for color. I'll leave it there.

[Marc Murnaghan, CEO at Polaris Renewable Energy Inc.]

Thanks.

[Operator]

Thank you very much. Your next question is coming from Nick Boychuk of Cormark Securities. Nick, your line is live.

[Nick Boychuk, Equity Research Analyst at Cormark Securities]

Thanks. Good morning, Mark.

[Marc Murnaghan, CEO at Polaris Renewable Energy Inc.]

Good morning.

[Nick Boychuk, Equity Research Analyst at Cormark Securities]

With all the growth that you're talking about here, organic, Dominican, and then also this M&A, can you just remind us what the CapEx expectations are for the remainder of this year and then into 2025?

[Marc Murnaghan, CEO at Polaris Renewable Energy Inc.]

So just, I mean, I really will stick to the organic. I would say if we start in Q4, at the DR, you're looking at about $10 million. I mean, the nice thing is the CapEx has come down. Originally, we were thinking it would be like a $40-$45 million in total. To do all of that, I think it's probably 10 less, so 35. I would say 10 of it would be in Q4, something like that, and 25 of it would be next year.

[Nick Boychuk, Equity Research Analyst at Cormark Securities]

Okay, thanks. Then with your comments around the cost profile changing, can you kind of walk us through, like, what the returns on that invested capital should look like? Like, I'm assuming IRRs have come up pretty meaningfully. Does that change how you're thinking about where you would like to want to deploy other dollars?

[Marc Murnaghan, CEO at Polaris Renewable Energy Inc.]

I wouldn't say that it's changed where we want it. I think we were already starting from a very attractive level, so it's more that we want to get going on it as quickly as can, because I think, I mean, the last 12, 18 months, it's been our friend in terms of the cap cost coming down, but now I would say it's just so good, we'd like to get going. You know, they've come up probably another 2 or 3 percentage points, maybe more, on the IRR side, so to levels that are, you know, call it circling around 20%, so plus or minus. So, you know, that's fantastic for something that's backed by still a lot of time left on a take-or-pay contract, right?

[Marc Murnaghan, CEO at Polaris Renewable Energy Inc.]

So, yeah, I think they've come up, they're great, and we just want to get going on it.

[Nick Boychuk, Equity Research Analyst at Cormark Securities]

Got it. And then last for me, just we didn't touch on Panama at all. Merchant prices?... still sticking around $150 there. With that level, any color you can share on, on when they're potentially gonna start to come down and normalize a little bit, and, and whether or not you would look to either, A, lock that in, or B, do more development there, to kind of take advantage of that while you can?

[Marc Murnaghan, CEO at Polaris Renewable Energy Inc.]

Yeah. So, just for your benefit too, the rainy season generally starts in May. So, in Panama, you have an impact of, they have a lot of hydro relative to their total capacity in the grid. So, when you get more rain, spot prices come down, so that's started in June. So they had already started coming down. So the profile in the quarter was that they were highest in April, in the middle in May, and then lower in June. So and so Q3, probably looking at 70, something like that. It's hard to know for sure. And that reflects the rainy season. And then, but I think the longer-term prices are gonna come into that range, probably starting in Q4, because they do have new capacity coming online.

[Marc Murnaghan, CEO at Polaris Renewable Energy Inc.]

That would be our best guess at this moment. And yes, we are waiting for them to finalize the details on a 500 MW renewable power call that we would be bidding into in Q4. That's what the published timeline is, and there's been a bunch of back and forth with participants, so that should be getting announced any time now. So we for sure would be bidding our plants into that. That would be our first option, because those are 15-year contracts with effectively government credit. And if that doesn't, or if we don't get something or that doesn't move forward, we would still there still is the possibility to go to commercial offtakers. There's a lot of commercial offtakers.

[Marc Murnaghan, CEO at Polaris Renewable Energy Inc.]

The only issue there is they're normally about, it takes 7 years, would be the average, instead of 15. So I, I still don't feel like we're in a rush to do that, though, so I would suggest we're, we'll, it would be, see where this 500-MW call, you know, lands, do that first, and, and, and if we get something, great. If we don't, we would still likely look to contract with some commercial group for maybe 40%-50% of the capacity.

[Nick Boychuk, Equity Research Analyst at Cormark Securities]

Okay. All makes sense. Appreciate it.

[Operator]

Thank you very much. Your next question is coming fromll Patrick O'Donne, who's a private investor. Patrick, your line is live.

[Patrick O Donnell, Senior Vice President of Americas Sales at SonicWall]

Hey, good morning. Thank you for-

[Marc Murnaghan, CEO at Polaris Renewable Energy Inc.]

Good morning

[Patrick O Donnell, Senior Vice President of Americas Sales at SonicWall]

... taking my questions. Good morning. I saw on the IR deck a target 6.5 EBITDA multiple. I was curious to know just thought process and maybe how conservative or what considerations you have in assessing the operating costs on acquisitions. Or do you get really good visibility on what it will take to operate a potential acquisition project?

[Marc Murnaghan, CEO at Polaris Renewable Energy Inc.]

So I'll deal with the second part. Yeah, op costs, at least in our sector, are a very good visibility. And our number one cost actually is our capital costs or is our operating costs. You know, the staff is usually not a big number to operate these plants and reasonably known and fixed. So, yeah, I would say very good visibility on op costs and going forward, and in fact, I think if anything, we've showed that we tend to budget assuming we don't achieve, call it, optimization and synergies on that, but we have continued to do that. So I think we've shown that we can actually get our op costs down over time.

[Marc Murnaghan, CEO at Polaris Renewable Energy Inc.]

And then in terms of the multiple, I think we put a higher one in because when we look at a comp set of Latin America-only power companies, which for the most part, those companies actually are a blend of renewables and types of gas, so they're not pure renewable companies. And I mention that just because, if anything, the gas would probably be a bit of a drag on their multiple. But when we look at those-

[Marc Murnaghan, CEO at Polaris Renewable Energy Inc.]

Mm-hmm

[Marc Murnaghan, CEO at Polaris Renewable Energy Inc.]

... you know, we're looking at probably 9-10 times EV/EBITDA would be the average of the comp set. So I think we're putting numbers that are, you know, quite conservative on that multiple.

[Patrick O Donnell, Senior Vice President of Americas Sales at SonicWall]

Mm-hmm. Okay. Okay, that's great to know. And good context. Two, I think, quick ones. But what about replacing degraded power in Nicaragua with solar? Is there an ability? I know you're moving panels over there for some of the just operating energy use, but is there an ability to kind of backfill degraded power with renewables at that site under the contract?

[Marc Murnaghan, CEO at Polaris Renewable Energy Inc.]

Yeah. I would say solar is the easy one, but you're gonna be limited. There's only so much space, so it's not gonna, you know... That really, the number one way to keep the power up or even grow it, would be by drilling more geothermal wells, which we can do, but then we've made the decision that, you know, that's quite capital intensive, and we would prefer to take our excess cash flow that's being generated by that facility and use it to grow in other jurisdictions. Because, to the last question, that multiple that we think we can get to is highly linked to us being more diversified. So,

[Marc Murnaghan, CEO at Polaris Renewable Energy Inc.]

Mm-hmm

[Marc Murnaghan, CEO at Polaris Renewable Energy Inc.]

... we don't think it really even if it's good economics in terms of an IRR, if we were to drill a new well, we really think at least in this form, the company, it's better to take that, let's say, $10 million of free cash flow and put it into the Dominican or an acquisition. So to get us to a more diversified company so that we can, call it, close that multiple gap. I would say we do have a sector in Nicaragua, in the what we call the wet sector, which has not been drilled. That is, you know, we think there's a duplicate of the resource we have right now, and we have turbine space, and we have contract space.

[Marc Murnaghan, CEO at Polaris Renewable Energy Inc.]

So, we are considering options to potentially bring in outside capital to see if we can't target that, to get exactly at the point that you're raising. But, you know, that's—I would say it's somewhat early days on that. And I wouldn't want to commit on that, but it is for sure something we're gonna look at because we think it's prospective. But if we can, we would rather do that on a, call it more of a, joint venture-type basis and bringing in a partner, if we were to do that.

[Patrick O Donnell, Senior Vice President of Americas Sales at SonicWall]

Got it. Okay, makes sense. And last question, what's the status of generating carbon credits for revenue? I know you guys did that a couple years ago, but haven't really, I guess I haven't seen it in a few years.

[Marc Murnaghan, CEO at Polaris Renewable Energy Inc.]

Yeah. Yeah, so from 2021, beginning half of 2021, the market really improved. We did sell some at, at – we thought were good prices, and then with inflation and rates, because we're in voluntary markets, the voluntary markets just disappeared, or they went from, let's say, anywhere from $250 - $5 a ton, call it, is what we were selling at, and they went back to $0.25 a ton or, or – and volumes just kind of disappeared. However, to your point, like, we are seeing interest in volumes coming back, and we are actually looking at transacting again in some maybe smaller volumes, but call it in $2-$3 range.

[Marc Murnaghan, CEO at Polaris Renewable Energy Inc.]

So that market, you are starting to see, I would say, percolating of interest from buyers, again, which didn't exist 12 months ago. So, so we're maybe we're at the early days. And, you know, it's hard to I can't give guidance, but if we could get some sales that, in that range, we wouldn't sell everything, but we would for sure start making sales if we can get in the $2-$3 a ton range. It seems like there's interest, there, and so we're, we're exploring it. So, you know, maybe we get something in the back half of the year. We'll see.

[Patrick O Donnell, Senior Vice President of Americas Sales at SonicWall]

Got it. And are those typically corporate buyers, or who-

[Marc Murnaghan, CEO at Polaris Renewable Energy Inc.]

Yes.

[Patrick O Donnell, Senior Vice President of Americas Sales at SonicWall]

Who are the buyers that you've seen?

[Marc Murnaghan, CEO at Polaris Renewable Energy Inc.]

Yeah, they're. Yeah, corporate. So one of the largest buyers is CORSIA, which is a, it's the, it's an alliance of all the airlines, because they buy. They actually—you know, when people buy voluntarily credits, they then have to go and match that. So they're quite a big buyer, the consortium, they're a buyer. And then you have, believe you have some other energy companies that decide that they're gonna do it. So it's mostly corporate. There's a few governments, but I think it's mostly corporate. But because it's. Yeah, they're voluntarily doing it, that means that, that market, you know, can kind of is a bit more volatile, but it seems to be coming back.

[Patrick O Donnell, Senior Vice President of Americas Sales at SonicWall]

Okay. Yeah, good to hear. All right. Thank you. Thank you so much.

[Marc Murnaghan, CEO at Polaris Renewable Energy Inc.]

Okay. Thank you.

[Operator]

Thanks very much. Just a reminder, if there will be any remaining questions, you can press star one on your phone keypad now. The next question is coming from Devin Schilling of Ventum Financial. Devin, your line is live.

[Devin Schilling, Senior Financial and Financial Analyst at Ventum Financial]

Well, hi, guys. Good morning.

[Marc Murnaghan, CEO at Polaris Renewable Energy Inc.]

Hi.

[Devin Schilling, Senior Financial and Financial Analyst at Ventum Financial]

Just, just on the green bond market here, maybe you guys can just comment on the health of this market right now and I guess, you know, what rates are you seeing out there versus the current cost on the debt that you're looking to refinance?

[Marc Murnaghan, CEO at Polaris Renewable Energy Inc.]

So at least everything we've seen, and we're not the experts, but that the market continues to be very strong. I know the first half of the year was really strong. It seems to be continuing. So it's that market seems to for sure think rates are coming down a bit or at least have stabilized, and there's a lot of capital there. So that's our sense. I think there would be. It's really the big benefit for us isn't really rate, although I think maybe we can say 50-100 basis points on a rate basis. It's the different, you know, amortization schedule.

[Marc Murnaghan, CEO at Polaris Renewable Energy Inc.]

Because we're so lowly levered right now, and we're still amortizing down our debt pretty quickly, we think we're paying down our debt too fast, relative to the life of the contracts and the assets. So we would prefer to blend in a bond where you're either no amortization or very small amortization, such that you know, our conversion of, call it, our EBITDA, the free cash flow just goes up, even if the rate stayed the same. So we think that is an appropriate thing to do, and we could take that extra cash flow and then use it to grow the company. Maybe you increase the dividend, maybe you buy back stock, but we would have the ability to do all of those things.

[Marc Murnaghan, CEO at Polaris Renewable Energy Inc.]

So I would suggest that while I do think there's a rate savings, I would—that wouldn't necessarily be the biggest driver for us at this point in time.

[Devin Schilling, Senior Financial and Financial Analyst at Ventum Financial]

Okay. Yeah, so repayment terms is kind of a key component here.

[Marc Murnaghan, CEO at Polaris Renewable Energy Inc.]

Yeah.

[Devin Schilling, Senior Financial and Financial Analyst at Ventum Financial]

Okay. No, that's,

[Marc Murnaghan, CEO at Polaris Renewable Energy Inc.]

Start there. I would start with that one, actually, yeah.

[Devin Schilling, Senior Financial and Financial Analyst at Ventum Financial]

Yeah. Okay. No, that's, that's helpful. Thank you so much. That's everything for me.

[Marc Murnaghan, CEO at Polaris Renewable Energy Inc.]

Great. Thanks, Devin.

[Operator]

Thank you very much. Well, that appears to be the end of our question and answer session. I will now conclude the call. Thank you very much, everyone, for joining us. This does conclude-

[Marc Murnaghan, CEO at Polaris Renewable Energy Inc.]

Thank you

[Operator]

... today's call.

Participants

Executives

• Anton Jelic, CFO
• Marc Murnaghan, CEO

Analysts

• Devin Schilling, Senior Financial and Financial Analyst at Ventum Financial
• Nick Boychuk, Equity Research Analyst at Cormark Securities
• Patrick O Donnell, Senior Vice President of Americas Sales at SonicWall
• Rupert Merer, Managing Director at National Bank