Polaris Renewable Energy Q2 2023 Earnings Call Transcript

Quartr
Provided by Quartr
August 3, 2023

There are 8 speakers on the call.

Operator

Greetings. Welcome to the Polaris Renewable Energy, Inc. 2nd Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation.

Operator

Please note this conference is being recorded. I will now turn the conference over to your host, Anton Jelic, CFO at Polaris Renewable Energy. You may begin.

Speaker 1

Thanks, Holly. Good morning, everyone, and welcome to the 2023 Q2 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 and our corporate website at polarisrei.com. Unless noted otherwise, all amounts referred to are denominated in U. S.

Speaker 1

Dollars. I'd like to remind you that comments made during this call may include forward looking statements within the meaning 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 operations. These risks and uncertainties Include the factors discussed in the company's annual information form for the year ended December 31, 2022. I'm joined this morning as always by Mark Murnahan.

Speaker 1

At this time, I'll walk you through our financial highlights. Power Generation. During the 3 months ended June 30, 2023, quarterly consolidated power production was 211,000 765 Megawatt Hours Higher Than the 163,119 Megawatt Hours Consolidated Power Production for the 3 months ended June 30, 2022. Due to additional production from the biner unit in Nicaragua As well as the Dominican Republic and Ecuador facilities acquired in 2022, coupled with Vista Hermosa Solar Park in Panama beginning operations in this quarter. For Nicaragua, the increase in production is a result of additional production from the binary unit, partly offset by expected declines in production from the steam fields.

Speaker 1

Consolidated production in Peru for the 3 months ended June 30, 2023 was marginally higher than the comparative period last year due to somewhat better hydrology across the country for the quarter. For the Dominican Republic, the Canola 1 facility produced 13,398 megawatt hours in the 3 months ended June 30, 2023. For Ecuador, the San Jose de Minas facility produced 11,323 Megawatt hours in the 3 months ended June 30. Generally, as in Peru, we have seen better hydrology than in the prior year. Revenue.

Speaker 1

Total revenue was $20,800,000 during 30% increase in production contributed by the company's facilities coupled with an increase in the effective PPA prices applied to our 3 Peruvian facilities. Net earnings. Earnings were $4,600,000 for the 3 months ended June 30, 2023 compared to a loss of $1,500,000 for the same period last year. This increase was driven by higher operating margins coupled with higher deferred income tax recovery, partly offset by higher finance costs during 2022. Adjusted EBITDA.

Speaker 1

Adjusted EBITDA was $15,400,000 for the 3 months ended June 30, compared to $11,200,000 for the same period in 2022, principally as a result of higher operating margins already discussed. Cash generation. Net cash from operating activities for the 3 months ended June 30 of 10,300,000 is lower than the $14,200,000 for the same period last year, mainly due to higher receivable balances and lower payables held at June 30, 2023 compared to 2022. Net cash used in investing activities for the 3 months ended June 30 was 1,400,000 Compared to $32,400,000 spent in the same period last year due to funding of construction of the binary unit in Nicaragua And the Vista Jaramosas Solar Park in Panama and also the funding of the acquisition of Canola 1 in the Dominican Republic. Net cash used in financing activities for the 3 months ended June 30 of CAD7,600,000 compared to $5,700,000 net cash used in financing activities in the same period last year.

Speaker 1

In 2022, the company refinanced Fence has sent senior debt and paid $9,500,000 in issuance costs. And finally dividend, I'd like to highlight that we've already announced we'll be paying a quarterly dividend on August 25 of $0.15 per share to shareholders of record on August 14. With that, I'll turn the call over to Mark, who will elaborate on current business matters as well as on our quarter end results. Thank you.

Speaker 2

Thanks, Anton. So first some comments on the production performance in the quarter. I would say on a consolidated basis, it was in line a little ahead. So we're very happy about that, Hitting the budgets and our own internal projections, Peru was a little bit higher, Doctor was a little bit lower, but net net, We were very happy with the overall production and continue to remain on track into this quarter. As people know, we commissioned the binary units at the end of 2022 and it continues to operate well, high availability.

Speaker 2

So very happy about that. The other project that we commissioned and constructed On our own was the Vistadormosa Solar Park in Panama that was put into service in Q2 and we've had just over 3 months now and then that production is right on track with what we were budgeting. So we are very happy with that. So all in all, hitting sort of our long term average estimates of production In the quarter year to date. And in fact, Nika, the was up a little bit quarter over quarter because Some of the work we did on the injection system.

Speaker 2

So, Nika was up a bit quarter over quarter, which is great. We did get a little bump in the pricing in Peru. So starting May 1, Ultra de Augusta, which is our biggest plant there, Had the price adjusted, which we had always expected, but it happened. And so we had a price in the $40 In the 40s, which is it's now running at 61. So expected, but obviously that helps and that's going to be the number going forward.

Speaker 2

So That really helps in terms of the obviously the top line, but also given that we took over the operation of all the plants in Peru, our costs are down a bit, So nice margin expansion in Peru, and we expect that to continue. In terms of the quarter to cash generation, As Anton mentioned, we had cash from operations of about $10,300,000 The uses of that, the largest use It was $4,400,000 in debt repayment, so we continue to pay down debt, dollars 3,200,000 in the quarterly dividend with CapEx of around Ballpark, dollars 1,500,000 so not a huge number. I'll get into some of those CapEx items in a second here. But that actually Net's out to an increase of just over $1,000,000 in the cash position. So we ended the quarter On a consolidated cash position of about $41,000,000 so that's up, debt's down.

Speaker 2

So the balance sheet Improving and depending on your target for this year, but we are running sort of Close to that, our target of about $60,000,000 of EBITDA for the year, which so that would put us at net debt to EBITDA of around 2.3x, which we think is very conservative Balance sheet and it's something that we're going to look at going forward. But That leaves us a lot of cushion and I think room to grow the balance sheet there. In terms of the projects that we're currently Executing, right now, it's all that I call it a current project optimizations, but these are the high return the highest return On capital we're going to get, we are doing the battery project in Peru, which is the smallest. That's only a $500,000 CapEx Project, but that's set to start in September. So we look forward to that, which will be our first battery project.

Speaker 2

So we're excited about that. The well optimizations, I'd say that the biggest short term project we're working on The well optimizations in Nicaragua, which are starting Next week, we the process for that is there's 2 wells that we're looking to Clean out effectively, it's 4.2 and 6.3. The first one, the process is you cool it down first and then you start to circulate Your solution through there, that only takes about a week, but then you need to let it heat up. So we should have a sense of success On these two wells, call it mid September, plus or minus, it's hard to predict exactly how long it takes for the wells to heat up, but it could be from 3, 4, 5 weeks, and then you can flow them again. So we're quite Optimistic about the results of this, and hopefully, they can come online a little bit in September in the current quarter, But more so in Q4 and going forward.

Speaker 2

Just worth noting that these wells, it means for the current quarter, they're out for about 4 weeks And the sum of the 2 wells is about 3 megawatts. So we do have about a month of 3 megawatts out for the current quarter. And then lastly, the other project that we are executing is the in Ecuador, which is the tie in effectively another Stream into the intake and that is ongoing and should be ready, I would say by End of Q1 2024, and that we would look to increase production there by about 20% to 25%. So those are the current projects. In terms of Kanoa 2, we did announce this is a new project, although it's an expansion of The current Kanoa 1, we signed the PPA in May.

Speaker 2

We have most of the development ready to go. We have done some very small Things on-site, but the big one is we are working on finalizing the interconnection agreement before we start the big construction. So and we are aiming to finalize that this quarter, get that done. And if we can do that, then we can really start the construction in earnest and to try to have that in service by back half of next year. And then but on Kanoa, in the same spirit as the other projects, we are we do have room under the current to deliver more energy and we are working on that as we speak and we'll have more To update people on the next quarterly call, but that again would be very high Return on capital and with not a lot of capital that we think we could add some panels potentially, as there is room and it's a very good contract.

Speaker 2

So if we can do that, we will likely do that before we even get to Kanoa 2. I can't comment on the size, But there would be, yes, very high return. And I guess for me, the big message Here is that whether it's the well optimizations in Nicaragua, the additional stream in Ecuador Or optimizing Kanoa 1, what we really are trying to do here is make sure that, call it, high return, lower risk projects Current operating projects really do generate higher returns than New development projects and so we want to make sure that those we maximize those and that they have to be sort of top priority So that we can hopefully meet or beat people's expectations, their own expectations next year, but using less capital In a time where capital is more expensive with interest rates, obviously, the cost of growth has gone up. So We are making sure that we really focus on the lower hanging fruit, call it. And just a comment, 2 more comments.

Speaker 2

One We still are working on several M and A files, nothing obviously to announce. But I think This higher interest rate environment is starting to take hold in certain Areas there some people always have fixed loans, but there are a lot of projects we see that have floating rate loans. And so this is the longer the rates they hire, I think that just means sellers are they're coming to the realization that this isn't sort of Really short term phenomenon and so we are having a lot more conversations on that front, which could get interesting. And then lastly, it was not in the disclosure, But we the Board did approve that we will institute a normal course issuer bid, at least Just have it, it is still subject it'd be subject to TSX approval. So we don't have that, but we'll work to getting that in the next 2 weeks.

Speaker 2

And then there would be a separate announcement there. We just think that it's prudent to have that option in place. We still we think that there's very good return in our shares. And if depending on where the market moves, I think it's always good to have that arrow in the quiver Because if there's obviously a great return on our share price, then I think it makes sense to take advantage of that as well, given that We are building some cash here and the net debt to EBITDA is quite low. So With that, we can open it up for questions.

Operator

Certainly. At this time, we will be conducting a question and answer session. Your first question for today is coming from Nick Boychuck with Cormark Securities.

Speaker 3

Thanks. Good morning, Mark. Can you walk us through a little bit more detail on the Dominican Republic, specifically what you're seeing from the regulator and how additional growth Might be coming online and also what that means for battery energy storage potential?

Speaker 2

Yes. So we We're trying to do several things all at the same time here. I'd say Get Kanoa to the agreement in place. I think there's been a This is taking a little bit longer than you wanted because there is a lot of solar projects, and they have Certain capacity limitations, we think they could accept their project, but they're just trying to work through all the scenarios. We have also talked to them about Adding storage to Kanoa-one and even adding more panels, so just increasing Kanoa-one Right now, before we can go into Kanoa, too, so they're very open to that.

Speaker 2

They want to bring on A lot of the lower cost renewables, we think that at that site alone, we could Double or triple what we have, if not more, with storage. And so they're very interested Doing it. I would say it's taking a little bit longer than we want, but the long term is that everything for sure is pointing towards, I would say another project of similar to what we have now, but more And then call it a third, which would have some combination of solar and storage. It's hard to know exactly which one is coming first. Like we might add more capacity in panels In the next 6 to 9 months on Kanoa 1.

Speaker 2

And then once we do that, we will likely Add some storage on top of that maybe in 12 months. So we're pushing ahead as fast as we can Because they do need the energy, but we are trying to make sure that it's delivered sort of In the shoulder times, and we think there's a return even if we have to cap the capacity. So for us, likely the highest return would be just adding more solar panels and waiting on the stores maybe to 12 months. So that's what we're looking at. And I just I hope to give a lot more specifics on the next quarterly call in terms of how we roll that out Because it really is sort of three things.

Speaker 2

It's just more panels. It's then it's more panels for a second phase and then storage. And the question is, does the storage come in sort of the second part of that or the third? And that's what we're still trying to figure out. But all in all, we would See that on that side alone, there should be a, I mean, a crippling, if not quadrupling of the EBITDA capacity.

Speaker 2

It's just how fast can we push it. That's all.

Speaker 3

Got it. Thanks. That's good color. Next, just can we shift to Panama? I'm curious, the MD and A mentions that the Merchant power price in the market right now is about 144.50 per megawatt hour.

Speaker 3

How does the contracted market compare? And what would it take for you to make that shift to sign a contract?

Speaker 2

Yes. Con, just to be clear, so that number was that was I think that was May. I think we're averaging lower than that, but we're still above 100. The dry season lasted a little bit longer The normal in Panama. So it's just we did time it well to start.

Speaker 2

But Where are you going to get contracts? It's going to be lower. You're going to be, I think, in the 70 to 80 range. So we're still assessing it, but the fact that we don't have any debt on that, The fact that we do think that spot prices will remain high at least for the next 6 to 12 months, we're not Sort of rushing out the contract. So I wouldn't expect us to sign anything in the next 3 to 6 months there.

Speaker 2

Because in fact, there was actually the operator I put out basically a ruling saying that they couldn't use As much of the they have 2 big dams there. So because the level of dams went down much lower than they wanted to, They are not going to dispatch as much from those hydros in the rainy season, which is what we're in now. So and that's going to last for the next 12 months. So realistically, the spot market is where you want to be in the next 12 months given that. So we'll stay there and I would say so don't expect contracts there.

Speaker 2

Maybe it's early next year that we might do something.

Speaker 3

Okay. Got it. And then staying in Panama, can you comment a little bit on where some of the organic growth initiatives for things like Truspa Hydro and Panasolar IV and 5 sit?

Speaker 2

Yes, they're there, I would say, and we have even more in terms of Opportunities on both hydro and even more so on solar. And we are but we're not ready to hit the go button on those just yet because the borrowing cost is high. And so I mean, the good news is panels really do continue to come down, at least at the size range that We're looking at and so the quotes we've been receiving are really good. But we're I guess we're just sort of waiting. So the pipeline itself has gotten bigger, but I'm not so sure we're going to hit the go button on any of those In the next 3 months, Harry.

Speaker 3

Got it. Thank you.

Operator

Your next question is coming from David Quezada with Raymond James.

Speaker 4

Thanks. Good morning, Mark. Maybe a question just going back to your comments around M and A. It sounds like Pricing expectations in that market maybe are coming down, but have lagged a bit. I mean, it seems like things have already come down materially in North America.

Speaker 4

I'm just curious, how do you like obviously cost of capital is higher too. How do you handicap your advantage versus other players in that market? Would you say that Since your cost of capital is better and maybe prices will continue to come down, but M and A could become Increasingly interesting as those price expectations adjust?

Speaker 2

Yes. I think we do have a cost of Capital advantage, the issue is that most of the assets we're looking at, I don't they're in a size range of, let's say, an EV of $50,000,000 to up to $250,000,000 There still is, I would say, a lack of competition in that size range. So It's a little bit less from my perspective about competition from strategic players than it is just about The owners, call it, expectations on what is a reasonable return for them. That's really what this comes down to. I don't see a lot of competition.

Speaker 2

It's just it's a bit of a timing game.

Speaker 4

Okay, great. That's good color. Thanks. And then just like sorry, on the you mentioned panel prices Can you confirm if you've I guess you haven't yet secured panels for the extension at Kanoa or Kanoa Is that basically just kind of monitor the market and see how prices trend before you decide to do that?

Speaker 2

Yes. And I would say so far it's worked because we were I'd say they're down almost another 10% or 15% from when we signed The PPA. And so all things are pointing to so would I do something now? I'd say we're getting close to that, To doing that, but so far it's worked in terms of waiting to secure that As it's gotten a lot better, I would see us in the before the end of the year, will we do something on panels, Be it for Kanoa 2 or something in Panama or even Kanoa 1? Yes, I would.

Speaker 2

It's very attractive right now On that side.

Speaker 4

Okay. Excellent. And then maybe just one more for me, Maybe a

Speaker 5

little bit outside the box here.

Speaker 4

I see that there was a recent auction for capacity renewable capacity in Guatemala. I'm just curious if you monitored that process and if that is a market that you might consider in the future?

Speaker 2

So The second part, yes, absolutely. We would look at Guatemala. We think it's actually a good market. We did not participate really in that, monitored a bit. But I would say To the extent we could do things in Guatemala, I absolutely would.

Speaker 2

And we have looked at 2 or 3 different sort of partnership opportunities with groups that have projects there, similar to what we did in Panama. We just didn't sort of move those forward really because last year we kind of had a lot on the go with the 3 new jurisdictions. And now we sort of digested, I'd say, integrated, digested and I have a list, I would say, of things to do in those countries, but we also have a short list of a few other jurisdictions that we do want to have a look at, and Guatemala is on that For sure.

Speaker 4

Okay. Excellent. Thanks for that, Mark. I'll turn it over.

Operator

Your next question for today is coming from Rupert Merer at National Bank.

Speaker 6

Hi, good morning.

Speaker 3

Hi, Rupert.

Speaker 6

If I could go back to Kanoa 2 again, Dominican Republic. Can you Talk to us about your financing plans for that project.

Speaker 2

Yes. So that one It would be a traditional project finance. We actually have a lot of interest on that. It's a 15 year contract. We're talking to people about 15 year loans.

Speaker 2

Interestingly, The rates that we're seeing on project loans for the longer loans have come up, but not nearly as much as the short end of the curve. So our current loan at Kanoa is 7.25. 7, sorry, 7. I think it would be maybe 100 to 150 basis points higher

Speaker 6

than that,

Speaker 2

but a lot of interest still in that, Just doing a traditional project finance, and we think that's a better way to go right now given where rates are in the short end. But I don't see that as an issue terms of being able to secure that. And with the And with the And amortizing loan in the 12 to 15 year time later term.

Speaker 6

With the cost of panels coming down if you were to build 25 Megawatts. What sort of CapEx do you think you could hit on that project today?

Speaker 2

It'd be low I mean low 20s. Low 20s. 22 to 23.

Speaker 6

And then looking at your high return optimization projects, you've got the well rehab going Soon, what happens after that? Have you identified the next step in well enhancement? And then How good could those next optimizations be relative to the one year you're going to start next week?

Speaker 2

So I'd say that we have 2 more that we've identified in the field. And maybe they're not as obviously, we're starting with what we think are the best, Principally being 4.2 really in terms of the data we're seeing should be the best target. Then you move sort of down the list. I'd say we easily have 2 more that would be considered good targets And we sort of see how this the process goes on the first two. And if they go well, then Given that it's not our budget on this is running it's lower than we initially thought it probably around $800,000 to $900,000 For the 2 wells and with the potential that we're targeting, obviously, well, Let's say $2,000,000 to $5,000,000 in total.

Speaker 2

That's about $2,000,000 to $4,000,000 extra in revenue a year. So we wouldn't wait around that long. And most of the equipment is in country actually that we're using. So, yes, I don't think we would Wait 2 or 3 years. If we have reasonable success and given that it's not a high CapEx item, Could it be a next year item?

Speaker 2

Yes, for sure.

Speaker 6

Great. And just quick follow-up on that. So with the Number of megawatts coming offline, that shouldn't have any impact on the binary, I imagine. Binary, you expect to be running still at full capacity?

Speaker 2

Yes, maybe, well, it's a good point. Maybe like 0.2, I'd have to get back to you on that. It's not going to be very noticeable, but there is a little bit of brine, not from Fortwo, but there is a bit of brine coming 63 that will be offline for call it a month. All right.

Speaker 6

Very good. I'll leave it there. Thank you.

Speaker 2

Okay. Thanks,

Operator

Your next question is coming from Najeeb Badon with IA Capital Markets.

Speaker 5

Hi, good morning. I wanted to go back to your comment about the leverage profile and being comfortable growing the balance sheet, I'm just wondering if you can give us a bit more of a sense of what your sort of comfort level would be and what are some of the I guess what's the excess capacity that you'd be willing to take on to financing projects?

Speaker 2

Well, yes, it's sort of sub-two 0.5 net. We would be I think something 3.5% to 4% on a consolidated basis is An appropriate level for us. I mean, we are so contracted and with good length on our contracts that we for sure could have more debt. And I think when I go north of 4, no, 3.5 to 4 seems like the right number. However, what I would say is You get more into should we do a project finance loan for Kanoa too or should you do some type of corporate Bond and that it becomes more a debate as to what's the right structure And there's just a difference.

Speaker 2

We, for instance, we can borrow at 8% for Kanoa, too. People are borrowing Way higher than that on the short end of the spectrum right now. And so my view is, unless We see the combination of 2 things, which is some new projects that we really like that have, call it, 15% Plus IRRs, and I can fund Kanoa to the equity part out of our current cash flow. Can fund these optimization projects out of our current cash flow. So I would rather do an 8% project loan than go do a bond at Realistically, double digit percentages in this market.

Speaker 2

So the limiting factor In terms of where we get to, the short term rates do have an impact on that. But the good news is we don't need to push it right now. So I would prefer To borrow at 8 on the project side, and in the next 6 to 12 months, we see where the short end goes. And if it improves at all, then we could for sure look to do something. But I'm we're sort of of the mind that Given that we can do all of this in Cano II with what we have and even have some extra cash flow, I would rather just continue to do that And let's just see where the short end goes.

Speaker 2

And then if that sort of improves, then we do have lots of room for sure To do more? I just don't expect it in the next 3 to 6 months.

Speaker 5

Understood. And that makes sense. And Sort of leading into the question more broadly about capital allocation, especially here with what you mentioned about the NCIB, I guess capacity to take on more leverage to finance growth, you want to put in the NCIB to have that optionality. But I guess from a Auto Capital Allocation Framework, is your preference today for potentially, obviously, growth first, but maybe buybacks over dividend increases?

Speaker 2

Yes. In terms of where is the capital allocation, I would say If just purely if we're saying, okay, let's compare a dividend increase versus NCIB, right now, I would say Maintain the dividend, but do NCIP instead of dividend increases because that gives us the optionality Because we do see the potential that there could be a lot of growth, but if the cost of that growth remains high, we can use the NCIB In the short term to because I think that would be a good use of capital, but then if rates really come down, we can add more projects And I would rather have the dividend where it is and then we can use capital in new projects at higher returns, right? So I think that's why the NCIB that's why we would do that now instead of dividend increases. And we continue to pay down debt. We continue to pay a dividend and NCIB is just another way to give capital back to shareholders.

Speaker 2

So I think it's also good To add something into the mix as opposed to just doing a dividend increase. And then in terms of growth, It has to for me, the growth where we rank that, it really depends On the return of that growth and as I so the point on the optimizations is that the returns on those are so far above, I would say our cost to capital that we want to do all of those. I'd say Kanoa 2 is for sure about our cost to capital, the return that we see, We for sure want to do that. And to the extent we can land on the same acquisition of new projects that are above that, we for sure want to do that. And the dividend increase may not help that, whereas an NCIB has the flexibility To, I guess, live on either side of that equation.

Speaker 5

Understood. And the $60,000,000 of run rate EBITDA that you referenced earlier, I think that's more of So the number for this year, but when you factor in these optimizations, maybe kind of the 2, it starts to get much higher than that. Do you have sort of a Short to medium term target, let's say, in the next couple of years, just based on the optimization and maybe a kinotu and 1 or 2 other projects?

Speaker 2

I have one in my head. I'm not going to The issue is that these the well optimizations really We'll know in a month. And so I'm going to sort of reserve what maybe a range. I mean, there's a range. I said we said 2 to 5 megawatts, that's almost $2,000,000 to $5,000,000 But then, probably it's another $800,000 $900,000 the battery crew is not a lot, it's a couple of 100,000, but the Canola 1 optimization, which we're still wrestling Down a little bit here, and I think we will have that rush down the next few months.

Speaker 2

That could be a big number in that as well. And then to Rupert's point, if we do have success in these well optimizations, we like to might do another one. Yes, I mean, you can start to add up a reasonable amount of EBITDA there with low CapEx and Call it, when we report Q3, we'll obviously have an update on the well optimizations, Kanoa And so I'm a little bit I just don't want to give a range yet, but we will.

Speaker 5

Understood. That's fair. And I guess more updates next few months as we look through these things, but that's thanks for answering my questions. That's all I have today.

Operator

Your next question for today is coming from Ahmad Saath at Beacon Securities.

Speaker 7

Hi, guys. Congrats on a solid quarter. I guess most of my questions have been Maybe just clarification on the timeline for Camilo II. It sounds like we shouldn't expect Any contribution

Speaker 2

in 2024

Speaker 7

numbers? Did I get that right?

Speaker 2

For safety, I would say that's correct. Yes, based on where we are right now, assuming we nail it down the next 3 months, You got a 12 month 12 to 15 month construction. So yes, I would say that's correct. To go back to What Najee was getting at though is I hope to be able to offset that with a couple other things here in terms of both Kanoa 1 Improvements and the optimization. So but in terms of when would Kanno to come online, yes, I think model from a modeling perspective, 2025.

Speaker 7

Perfect. Thanks. And on what you're working on In the Dominican, is that going to be material enough that you guys plan to press release it separately or we're just going to wait have to wait for the quarter results To hear about what are you guys doing there in terms of maybe adding capacity?

Speaker 2

So I may not understand the question, but I would say, obviously, Anything on Kanno to would be press releasable. I think In terms of it was your question sort of would we press release something on if we're doing optimization on Canoa 1? Is that what your question is?

Speaker 7

Well, both. I guess you answered the first part, but I guess, Kanawhawan would not be that material to pressure this on its own, I imagine?

Speaker 2

Yes, I don't think it would be. I think that would be more we'll be giving sort of guidance next quarter In terms of what a rollout might look like, essentially, what should people put in their numbers for next year as opposed to what they are right now. But I don't think that's really a press release.

Speaker 7

Yes, fair enough. I appreciate that.

Speaker 2

Unless it's so material, but I don't At this point, I wouldn't I would say no.

Operator

Your next question is coming from Devin Schilling at PI Financial.

Speaker 4

Hi, guys. Nice quarter here. Just a quick housekeeping item here for me today. Just looking at your G and A It was down quite nicely this quarter. Just wondering if there's anything one time here or is this the new run rate we should be going with going forward?

Speaker 2

I'm not sure. When you say down, Devin, I don't know if we have that in ours Because where do you see that? Because we have it going out. And the trick for us is that last year, the first Well, the same period, whether it's 3 or 6 months last year, we didn't have the acquisitions in. So it's hard to actually compare On a year over year basis?

Speaker 4

Okay. Yes. Sorry,

Speaker 2

Q3 and Q4 of last year when we did have those in, we're kind of flattish to those numbers. That's how we are looking at them.

Speaker 4

Okay. Yes. No, that's my mistake here. All good. Thanks, guys.

Speaker 2

Okay. Yes. But flat. Yes. And so we're happy with where the G and A numbers are.

Operator

There are no further questions in queue.

Speaker 2

Okay. Thanks, everyone.

Operator

This concludes today's conference,

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Earnings Conference Call
Polaris Renewable Energy Q2 2023
00:00 / 00:00