Polaris Renewable Energy Inc.

Good day, everyone, and welcome to the Polaris Renewable Energy, Inc. Fourth Quarter 2024 Conference Call. At this time, all participants have been placed on a listen-only mode, and we will open the floor for your questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Anton Jellick, Chief Financial Officer. Sir, the floor is yours.

Thanks, Matthew. Welcome, everyone, to the 2024 Year-End Earnings Call for Polaris Renewable Energy. In addition to our press releases issued earlier today, you can find our financial statements and MD&A on both CDAR Plus and our corporate website at polarisrei.com. Unless noted otherwise, all amounts referred to are denominated in U.S. dollars. I'd also like to remind you that comments made during the call may include forward-looking statements within the meaning of applicable Canadian securities legislation. regarding the future performance of Polaris 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 31st, 2024. I'm joined, as always, this morning by Mark Murnaghan, CEO, and Yume Fernandez, our Director of Finance. At this time, I'll walk you through our financial highlights. Power generation. Consolidated power production for the year was 764,756 megawatt hours versus 800,951 hours in 2023. While in Q4, we saw 195,000 797 megawatt hours generated compared to 192,820 megawatt hours last year. For Nicaragua in the fourth quarter of 2024, production was 116,400 megawatt hours lower compared to the same period last year at 112,195 megawatt hours. Sorry, higher, my apologies, higher. Consolidated power production in Peru for the three months ended December 31st was in line with the comparative period in 2024. At our Dominican Republic Canoa One solar facility, we produced 14,315 megawatt hours in the three months ended December 31st. This is a 12% increase versus the fourth quarter in 2023, despite lower irradiation, going to increase productivity of the new solar panels. For Ecuador, in the fourth quarter of 2024, average production of 6,395 megawatt hours was lower than the comparative period in 23. And in Panama, Vista Jaramillo Solar Park production of 4,389 megawatt hours is marginally lower than the same period last year. Revenue. Revenue was 18.8 million during the three months ended December 31st, compared to 18.7 million in the same period last year. and $75.8 million for the full year compared to $78.5 million in 2023. Net earnings. Net earnings for the year was $3 million compared to earnings of $11.7 million for the full year 2023. Adjusted EBITDA. Adjusted EBITDA, $55 million for the year compared to $57.7 million for the same period last year. Cash generation. Net cash from operating activities for the 12 months ended December 31st was 35.1 million lower than the 44 million for the same period in 23. Net cash used in investing activities for the 12 months ended December 31st was 3.3 million compared to 11.4 million in the same period in 2023. And then net cash from finance activities for the 12 months ended December 31st $27.7 million was largely impacted by the issuance of green bonds for $175 million in December 2024. Normalizing for the effect of the green bonds, the cash used in finance activities in 2024 would have been comparable to $27.7 million net cash outflow from financing activities in 2023. And then finally, dividends. I would like to highlight that we have already announced we will be paying a quarterly dividend on February 28th of 15 cents per share. With that, I'll turn the call over to Mark who will elaborate on Polaris' annual results as well as on future business matters. Thank you.

Thanks, Anton. Okay, so in terms of the results, I would highlight that in Q4, year over year, so Nicaragua was actually up year over year. which is quite important. The way we've been running the field is that the binary is not at full capacity. It's at about eight megawatts instead of 10, which we implemented earlier last year. And with that, I would say the field is showing very good stabilization. It was actually the steam in Q4 was up year over year. And so we're quite happy with how that stabilized. And we may get back to looking at moving that up later this year, just depending on how the wells perform in the first half of the year. So we're quite happy with that. Peru, Q4 was quite strong, which is nice to see because Q3, which is the dry season in Peru, was actually a very dry season. But the rains came and the The production was very good in Q4 for Peru, and that has continued on this year so far. So it does seem that the rainy season is back and in full force, which is great. As well in Dominican, that was up given the panel replacement. And we do expect to have sort of a full year of the benefits of the panel replacement this year. So hopefully we can get a little bit closer Closer or to the the budget that we had when we did that but we are seeing the benefits of that And it's I would say it's generally tracking in terms of the efficiencies That we were looking for irradiation in the quarter was lower year-over-year But the actual sort of conversion efficiency was very close to what we predicted when we did the replacement program and lastly in terms of the actual historical results, I would say that if you look at 24 versus 23, that when you add our off costs and our G&A costs, they're actually down year over year. So again, in an inflationary environment, I would say we're keeping our eyes on the cost control and doing a very good job at that. In terms of what we're looking for for the current year, with the operating assets in place. Let's call it flattish in terms of production. We do think Nicaragua will be running at a level very similar to where it was at in Q4. I think our numbers for the year, including major maintenance, which this year we're doing major maintenance in November. So we're budgeting between 460 to 470,000 megawatt hours for the year, which would be similar to last year and running call it flat to Q4. Very similar for the other assets, although we would look to Peru being somewhat higher this year, back to more normal levels. And then you take that and then what will be additive is that we did receive approval from the local regulators in Puerto Rico which we needed for our acquisition of Puntalima Wind Farm. We needed the approval for the change of control, which we've received. And so we're now moving to closing, which we would expect will happen before the end of this quarter. So you should see, call it three quarters, pardon me, of contribution from that acquisition this year. In terms of call it growth beyond that. Really, I'll start with the organic. And on the backs of closing the Punta Lima, we hope to be undertaking something that we think is very interesting, which is grid connected storage programs that they're looking to implement on the island. And that would likely be our first project there would be brownfield as it would be on the site. And so I would say that as I sit here now, we would be shifting call it in terms of brownfield opportunities, shifting a little bit from the Dominican to Puerto Rico as soon as we close. So, and we should be able to be giving more color on what that opportunity looks like in terms of the capital outlay in the timing, but it should be coming actually quite quickly. So pay attention to those updates shortly. In the DR, the DR is still there. It's just happening a little bit slower. And we still think that solar plus storage, and storage is the key here, is going to remain an important organic, a part of our organic growth. Going forward we're really they're just trying to work out the regulations as to how it all gets paid for in terms of energy versus capacity But it is coming and it's needed They really need it. And so we're we're ready to go. We're just positioning ourselves with that. It's just likely a little bit slower and That's on call it organic growth of existing properties and in terms of M&A pipeline is robust, as it always has been. What I would say, though, is now I think the multiple gap, call it, between what we trade at and what an operating asset, a good operating asset with a reasonable contract life on it, there's always been a multiple gap. I would say that that multiple gap is lower than it's ever been for numerous reasons. So there still is a gap, but it's much smaller. So that's encouraging. And given that we completed the bond offering in Q4 last year, we actually have some dry powder in terms of capital from that to put it to work. And so I think that combination bodes well for us call it, to something in the back half of the year on the M&A side to complement what we're looking at on the organic side. And in terms of what is the capital we have, I think it's just, at December 31, we showed I think $217 million of consolidated cash, but that's prior to paying out the three loans that we paid out. After paying that out, the way to look at it, the pro forma cash on the balance sheet is about $100 million. And if you earmark 20 for the Punta Lima transaction, that would leave us with about $80 million of cash, consolidated cash on the balance sheet after closing Punta Lima and after repaying all the debt, which for us is a very healthy level. And I think we can do a fair amount of damage with that. And then that's really what we're going to be focused on in the next three to six months here. So with that, I'll open it up for questions.