Polaris Renewable Energy Q3 Earnings Call Highlights

Key Points

• Q3 results weakened: Revenue held broadly flat at $19 million, but generation fell 3% and adjusted EBITDA declined 3% to $12.3 million. The net loss widened to $7.2 million, including an $8.3 million non-cash impairment tied to the Dominican Republic asset.
• Dominican curtailment remains a major constraint: Curtailment averaged 18% in Q3 and 28% over the first nine months, versus a historical level of about 7%. Polaris has deprioritized the Canoa 2 expansion while it focuses on storage solutions.
• Mexico projects are advancing: Polaris has secured three project awards totaling 250 MW plus battery storage, with construction expected to begin in 2027. The company ended the quarter with about $99 million in cash and declared a $0.15-per-share quarterly dividend.

Polaris Renewable Energy TSE: PIF reported a wider third-quarter loss after taking an $8.3 million non-cash impairment on its Dominican Republic asset, even as revenue held steady and improved wind generation in Puerto Rico helped offset lower production elsewhere.

The renewable power producer generated approximately 176 gigawatt-hours during the quarter, down 3% from a year earlier. Revenue remained broadly flat at $19 million, supported by higher power purchase agreement prices in Peru and a greater share of generation from higher-priced contracts in Puerto Rico, Chief Financial Officer Alba Seisdedos said.

Adjusted EBITDA fell 3% to $12.3 million from $12.7 million. The net loss attributable to shareholders widened to $7.2 million from $0.3 million in the prior-year quarter. Unless otherwise noted, figures discussed on the call were in U.S. dollars.

Dominican curtailment and impairment

Seisdedos said development constraints affecting the Canoa 2 expansion and continued curtailment at Canoa 1 triggered an impairment assessment of the Dominican Republic asset. The resulting charge did not affect liquidity or operating cash flow, she said.

Curtailment in the Dominican Republic averaged about 18% in the third quarter, an improvement from 35% in the first half of the year. For the first nine months, however, curtailment averaged about 28%, well above historical levels of approximately 7%. Polaris is engaging with authorities and other renewable power producers on longer-term solutions, Seisdedos said.

CEO Marc Murnaghan said Canoa 2 is not a near-term priority while curtailment persists. The company is focused instead on a Dominican storage procurement process, and he said it could reconsider capital allocation for Canoa 2 once additional storage capacity comes online. That decision is realistically years away, he said.

Across the portfolio, generation for the first nine months totaled 580 gigawatt-hours, down 5% from the same period in 2025. Seisdedos attributed the decline primarily to Dominican curtailment and operational constraints in Nicaragua, partly offset by strong Puerto Rican wind generation.

Puerto Rico’s wind output rose approximately 52% year over year in the quarter because of exceptionally favorable conditions. Nicaragua’s geothermal generation met management expectations for the quarter, although year-to-date output reflected earlier maintenance and lower binary-unit production due to reinjection capacity constraints, Seisdedos said.

Mexico projects advance

Murnaghan identified Mexico as a major growth opportunity. Polaris has announced three project awards totaling 250 megawatts plus battery storage, compared with its current companywide capacity of 180 megawatts.

The CEO said joint venture agreements and the fideicomiso have been signed, while permitting is being completed to bring the projects to a ready-to-build state. He expects a power purchase agreement for the 25-megawatt Don Humberto project in December and agreements for the other two projects in January.

Small works at Don Humberto could begin in December, with construction starting in earnest in the first quarter of 2027, Murnaghan said. He expects construction on the other two projects to begin in earnest in the second quarter.

Polaris is also pursuing additional projects in Mexico’s Mixtos 2 process and expects clarity by the end of November. Murnaghan said the company’s preference is to develop its own opportunities, although it could consider projects held by smaller developers if needed. He also expressed confidence that Polaris could bring in local capital partners in the second half of 2027; ownership terms have not been determined.

Battery project and cash position

Polaris has placed an equipment purchase order for batteries associated with its ASAP contract. Deliveries are scheduled to start in March or April 2027, with commissioning targeted for the third quarter, Murnaghan said.

Asked about the Trina Storage supply contract and potential investment tax credits, Murnaghan said qualifying for the credits was theoretically possible but highly unlikely under the chosen approach. He said Polaris concluded that other supplier options had higher costs, even after credits, or less favorable timelines. The company could also work with the same supplier in Mexico or the Dominican Republic, he said.

Polaris ended the quarter with approximately $99 million in total cash, up from $93 million at the end of 2025. It declared a quarterly dividend of $0.15 per share, payable November 20 to shareholders of record on November 12.

About Polaris Renewable Energy (TSE:PIF)

Polaris Renewable Energy Inc 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).

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