Polaris Renewable Energy Inc.

Greetings. Welcome to the Polaris Renewable Energy Third Quarter 2025 Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Alba Sesteros, CFO at Polaris Renewable Energy. You may begin.

Thanks, Hallie. Good morning, everyone, and welcome to the 2025 Third Quarter Earnings Call for Polaris Renewable Energy, Inc. In addition to our press releases issued earlier today, you can find our financial statements and NDNA on both Cedar Plats and our corporate website at polarisrei.com. Unless noted otherwise, all amounts referred to are denominated in U.S. dollars. I would also 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 Inc. and its subsidiaries. These statements are current expectations and as such are subject to a number 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 forum for the year end of December 31st, 2024. At this time, I will walk through our financial highlights. Overall, Q3 2025 was a steady quarter for Polaris. Results reflected solid operational execution, disciplined cost management, and the second full quarter of contribution from our Puerto Rican wind operations. Together, these factors supported both year-over-year and year-to-day growth in generation, revenue, and also adjusted EBITDA, despite production generally being lower in the third quarter of the year, which coincides with the dry season in those countries where the company has hydroelectric plants, and therefore there is less resource available for energy generation, as is the case of Peru and Ecuador. as well as the rainy or hurricane season, and therefore we have less radiation or wind in those countries where the company operates solar plants, as is the case of Dominican Republic and Panama and our wind farm in Puerto Rico. So starting with operations, third quarter consolidated energy production totaled 181,235 megawatts hour versus 168,639 megawatts hour for the same period last year. Consolidated energy production for the nine months ended September 30th, totaled 613,524 MWh, representing an 8% increase as compared to the same period last year. The strongest performance this quarter was achieved by our hydroelectric projects in Peru, where favorable hydrology during what is typically the dry season and an excellent plant availability led to a 44% increase, both in Q3 2025 and year-to-date, in hydro output for the Peruvian projects. Our hydroelectric facility in Ecuador also had an exceptional quarter, producing 24% more energy in the three months ended September 30th versus the 2024 comparative period, thanks to strong rainfall and an excellent technical performance. In Puerto Rico, the Punta Lima wind farm, acquired in March, added incremental production that did not exist in 2024 and is now fully integrated in our portfolio. In Panama, solar generation in the quarter was 2% higher than in the 2024 comparative period. These increases offset lower output from Nicaragua, where short-term well instability and natural steam field decline earlier in the quarter reduced generation by about 5% for the nine months ended September 30th versus the same comparative period in 2024. Production at our Dominican Republic NOAA one solar facility decreased 1% in the quarter when compared to the same period in 2024. While year-to-date, the production increased 5% versus the 2024 comparative period, reflecting efficiency gains from the new panels installed in 2024, which allow upsetting grid-wide propelments. Overall, our diversified portfolio, spanning geothermal, hydro, solar, and wind across six jurisdictions, continues to provide balance and resilience in the face of localized resource variability. So turning to the financial results, starting with revenue, Revenue was 19 million during the three months ending September 30th, which represents an increase of 8% versus Q3 in 2024. Revenue year to date was 60.9 million versus 56.9 in the 2024 comparative period, reflecting higher generation in Peru and Ecuador, as we have mentioned, and the addition of our project in Puerto Rico, Punta Lima Wind Farm. Adjusted EBITDA, adjusted EBITDA of $12.8 million for the quarter, compared to $12.4 million for the same period last year. And furthermore, for the nine months ended September 30th, the company realized $33.2 million in adjusted EBITDA, compared to $41.4 in the same period last year, reflecting a 4% increase. Operating margins remain strong despite inflationary pressures and the integration of new assets supported by disciplined cost control and lower insurance expenses following our debt repayments. Cash generation, net cash from operating activities remain robust with 29.2 million for the nine months ended September 30th exceeding the same period in 2024 by 3.3 million. The increase mainly reflects the collection in Q3 2025 of the strong Puerto Rican revenues from Q2 which follow a 47-day collection cycle and the shift from quarterly interest payments from regional loans in 2024 to semi-annual bond interest payments in 2025. Net cash used in investing activities for the nine months reflects the initial 15 million payment for the position of Punta Lima Wind Farm, while there was no competitive transaction in 2024. Net cash used in financing activities for the nine months mainly reflects the early debt repayment of four credit facilities to the 120.6 million. Dividend. Finally, we remain committed to delivering shareholder returns. I would like to highlight that we have already announced that we will be paying a quarterly dividend on November 21st of 15 cents per share to shareholders of record on November 10th. With that, I will turn the call over to Mark, who will elaborate on Polaris' third quarter results, as well as on current business matters. Thank you.

Thanks, Alba. I'll just make a few operational comments about where we see sort of rest of the year looking forward. As Alba mentioned, the hydros were stronger than normal in Q3, which is the dry season in those jurisdictions. But we do see that at least October today continuing. So hydros we think will be somewhat stronger than usual in Q4 here as the rainy season has started somewhat earlier than normal. I would say what's going to offset that a little bit is that those, call it rainier conditions, do seem to be also in the solar jurisdictions, DR and Panama. So they're looking maybe a little bit softer, but I would say the net effect of those two things should still be positive in this current quarter. I see San Jacinto, as I mentioned in the last quarter, in the 49 to 51 range. which it did, and then I'm saying 50 megawatts current quarter, plus or minus a little bit, similar. So that, when I run our numbers, that would bring the quarter in around 195 to 200 gigawatt hours would be the current range that we're looking at right now. And just a reminder that, and that is because we have moved the major maintenance at San Jacinto into January of next year instead of December of this year, just based on some availability of Fuji staff. So that will land in Q1 next year. In terms of really the growth and the developments, the big focus remains ASAP. The update on that is that the contract was submitted by ourselves and LUMA to PrEP, which is the Energy Board, a while ago. It was approved by them, and then it went to PREPA. And just to explain, I'll give a little more detail, there's three entities that need to approve it there, which is PrEP, which is the Energy Bureau, then PREPA, which is the contracting agent, and then after that, FOMB, which is the Oversight Management Board. Basically, we had received PREP. We have PREP approval as of this past Monday. And I would highlight that on September 22nd, the governor issued an executive order which was really focused on the energy, call it emergency situation, or it's an acute need for more energy on the island. And in that order, it was really, I would say, directing government entities, whether it's PREPA or even Ministry of Environment to expedite approval processes and permitting processes such that new generation and including storage can get brought on the system quicker than what has traditionally happened in the past. While it did take a bit longer than we expected to get this PrEP approval, we are expecting things to move reasonably quickly from here on out. What does that mean, though, in terms of, like, we would look at likely a Q4 in-service date next year for that? And in terms of the sizing, it has landed on 71.4 megawatts, which was approved, as opposed to 80. And that's really just a technical limitation at the interconnect point. So those metrics, based on what we're seeing from the procurement, and we are, I would say, reasonably far along in the procurement process, it would be gross capex of about 70 million. but we do still anticipate being able to achieve an ITC on that, which would bring the CapEx down to a net CapEx of about 50 million. And at that size of 71.4, you'd be looking at EBITDA around the 13 to 14 million on net CapEx of 50, which is about a three and a half, four times sort of CapEx divided by EBITDA build multiple. So still very... excited about those numbers and hoping to launch the program in this border in the next month. We're also hopeful that this won't be the only storage project in Puerto Rico that we do. We've already been asked by LUMA to formally give our intention to move forward with something called SO2. So we're looking at that. And I would also say given what I mentioned with the executive order, we are talking to several developers on the island or with projects on the island for more traditional solar plus storage projects that have contracts or have been awarded approvals for contracts, but they're looking for sort of larger financial partners or operational companies. And this has really come on the radar screen just in the last, I would say, two to three months. We like these because of what we're looking at on the island as well. They're reasonably chunky. I would say the small ones are $5 million. We're seeing things in the $10 to $20 range. But with very good, I would say, capital ratios, probably not quite as good as the ASAP program I mentioned, but you know, in the, call it five times, which, you know, we're still looking at 20-year U.S. dollar contracts, so that's very good return profiles. So that really is, call it the brownfield focus right now, and I would say that is the focus for the company. I would mention the DR, which we have continued to push on more in the background. It looks like that will get pushed into next year in terms of potential contracting opportunities As the government is now saying they want to look at doing a tender situation instead of bilateral, we would obviously have the ability to participate in that. And I think we'd be in a good shape for that, but we do need to wait likely for next year. So what that means is really pushing the Puerto Rico projects in front of that. BalanceFeed is strong with 99 million in cash. We did repurchase another 27,000 shares in the quarter. In Q3, continue to in Q4 here. So I guess it is somewhat slower in coming with the ASAT project, but we're very confident it is coming. And with these other projects that we're looking at, I do see a situation quite quickly here where we will be using up that spare capacity on the balance sheets that we have, and hopefully that's some. So really, I would say over the next 12, 15 months here, the story would be steady as she goes from an operating perspective, but an expected big pickup in what I would call development and construction activities and news flow. And I would say as we move forward on ASAP and as we move forward with hopefully one or two other projects next year, we will for sure I would say be giving more market updates and press releases as we move forward with these projects. So it would be more sort of call it newsy on the development and construction activities next year. And I think it's important because those would be very material for the company. And then call it financial results on the back of those coming in 2027 and 2028. So with that, we can open it up for questions.