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Operator: Greetings, and welcome to the Polaris Renewable Energy Inc. Fourth Quarter 2025 Conference Call. [Operator Instructions] And please note, this conference is being recorded. I will now turn the conference over to your host, Alba Ballesteros, Chief Financial Officer with Polaris Renewable Energy. Ma'am, the floor is yours.
Alba Ballesteros: Thank you, Ali. Good morning, everyone, and thank you for joining us for our 2025 fourth quarter earnings call for Polaris Renewable Energy, Inc. Before we begin, we would like to remind you that in addition to our press release issued earlier today, you can find our financial statements and MD&A on both SEDAR+ and our corporate website at polarisrei.com. Unless noted otherwise, all amounts referred to are denominated in U.S. dollars. We will 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 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 31, 2025. On today's call, I will walk through our operating and financial results for the fourth quarter 2025 and full 2025 year. We will then turn the call over to Marc, who will provide a review of our 2025 performance and discuss the outlook for our business and growth prospects. Following our comments, we look forward to taking your questions. Overall, 2025 was a year of measurable progress for Polaris. We delivered year-over-year growth in energy production, revenue and adjusted EBITDA. Solid operational execution and disciplined cost management, a strong operating cash flow generation, materially simplified and optimized capital structure and continued capital returns to shareholders. Importantly, we achieved this while maintaining balance sheet strength and financial flexibility, which remains central to our long-term strategy. Starting with operations, for the full year 2025, consolidated energy production totaled 810,731 megawatts hour compared to 764,756-megawatt hour in 2024, representing a 6% year-over-year increase. This increase reflects the addition of the 26-megawatt Punta Lima Wind Farm in Puerto Rico, a strong hydrology in Peru and Ecuador and solid plant availability across our portfolio. The strongest performance over the year was achieved by our hydroelectric projects in Peru and Ecuador. In Peru, favorable hydrology and excellent plant availability led to a 12% increase year-to-date in hydro output for the Peruvian project, following what had been a historically dry year in 2024. Our hydroelectric facility in Ecuador also had an exceptional year, producing 19% more energy year-to-date versus 2024 and 26% more energy in the fourth quarter of 2025 versus the comparative period in 2024, thanks to a strong rainfall and an excellent technical performance, resulting in the highest resource availability since operations began. In Puerto Rico, 2025 marked the first year of contribution from Punta Lima, adding 42,056 megawatts hour post acquisition and strengthening our technology diversification. In Panama, solar generation in the quarter was 5% higher than in the 2024 comparative period. These increases offset lower output from Nicaragua where expected geothermal normalization and natural streams declined, reducing generation by about 5% in 2025 versus 2024. Production at our Dominican Republic Canoa 1 Solar Facility decreased slightly 2% year-to-date reflecting efficiency gains from the new panels installed in 2024, which allowed setting grid wide curtailments, which were 3,500 megawatt hours in the quarter and 5,900 megawatts hours for the year. Overall, our diversified portfolio, spanning geothermal, hydro, solar and wind across 6 jurisdictions continues to demonstrate resilience and stability and remains one of Polaris' structural strength. From a financial perspective, adjusted EBITDA increased up to $56.5 million, reflecting a 3% increase year-over-year. Despite inflationary pressures and the onboarding of new assets, operating margins continued to perform strongly, benefiting from disciplined cost management. I would like to highlight that we have already announced that we will be paying a quarterly dividend on February 27 of $0.15 per share to shareholders of record on February 17. Polaris now has a 10-year track record of consistent dividends, having returned approximately $105 million to shareholders in that period. Also during 2025, under our Renew NCIB program, we repurchased and canceled 169,800 common shares for approximately $1.5 million during the year, of which 80,000 were purchased in Q4 for approximately $0.8 million. Today, following debt repayments in Q1 2025, and Punta Lima Wind Farm integration, Polaris has a simplified structure, ample liquidity and the year 2025 with a consolidated cash position of $93.2 million, including restricted cash and an optimized and energy diversified platform for further growth. This positions the company well to deploy capital into expansion opportunities. With that, I will turn the call over to Marc. Thank you.
Marc Murnaghan: Thanks, Alba. So just a few comments about sort of production and guidance on that front for this year. So we did -- as we messaged, we moved the major maintenance at San Jacinto from end of last year to this year. It has been completed and executed. As expected, no issues with the turbines, which is great. What that means in terms of, call it, total production on a consolidated basis for our budget for this year without any new plans, without any acquisitions, so we just take the existing plants in operation, with that, with the major maintenance there and some curtailment in the Dominican, our consolidated range for the year would be around 775 to 790 gigawatt hours for the year. In terms of what we are working on, on the growth side, as people know, we really focused on the ASAP project last year because of the size of it, which was -- which is very well matched with the excess cash we have on the balance sheet and the profitability of that project. And so we're very focused on that. And what I would say that given the delays in the approval, which I'll get to in a second, we, 3, 6 months ago, really started to, call it, diversify our development opportunities in some existing jurisdictions as well as some new ones. So -- and I think we're going to start to see the fruits of that very shortly. In terms of the actual ASAP program, the -- we received approval back in August for -- from the Energy Bureau and then moved to PREPA, which is the actual contracting agent. It turns out that in Q4, they did -- the Board was basically not properly constituted to approve it. It is now properly constituted. They do now have a quorum. And our understanding is that the meeting or basically the first board meeting of PREPA with properly constituted call it quorum will be taking place within the week. And we do know that our ASAP project is on the docket for such board meeting amongst other projects. So we're not the only one, there's numerous projects that they need to get to, given that there's, I would say, been a pause in terms of their approval of projects. So we are expecting that board meeting to happen in the short term now that they have the quorum. And then -- so in addition to that, we do have nonbinding LOI that we signed regarding the acquisition of the small solar project in one of our current jurisdictions. It's not big, but it's strategic. And we would look to be going binding on that by the end of March. So that's on the acquisition front. In terms of other development activities, we are participating in an RFP process in Puerto Rico as well that came out in the end Q4. There was a request for qualifications in December, which we successfully passed, and we're now in the RFP process. We're going to be submitting a solar plus BESS with a heavy BESS weighting to it, so it's more dispatchable. And interestingly, despite the PREPA, which has been delayed, I would say that the process in this RFP is moving very quickly. The timeline is very aggressive and any sort of correspondence, I would say, responded to very quickly. So -- and the actual formal timeline that they have published is that they're looking to have contracts signed by June. We actually had to submit or comment on contracts yesterday. So that is actually moving. So we're very interested in that in Puerto Rico. Also in the same area, I would say that while the Dominican is having issues with curtailment, we do think that opportunities centered around storage will emerge from it, and we will be looking at being, call it, ready for that, and there are things that we're working on there. And then in terms of importantly, in other markets, big focus going forward now is Mexico for us. We, yesterday signed an exclusivity agreement with a local developer there for -- which gives us access to approximately 1,000 megawatts of projects. The way that -- so we're very happy about that. The way that things are working in Mexico is there's different processes that are going to be happening throughout the year. The first one is something called mixed projects, which is -- we were actually invited given the work that we've done last year, so Polaris was invited to participate in, it's called the convocatoria. It's basically a process to -- for them to some fast-track projects/signing of contracts. But the short-term one, which is we actually have to submit by next Friday. It's for what they call mixed projects, which is where your, I would call it, basically their build-own-operate transfer, 25-year build, own, operate transfer projects with CFE which is -- and they're going to be your contracting entity. So we will -- with this portfolio that we've call it, have exclusive rights to, we will definitely be submitting some of those projects in that portfolio for this short-term mix projects, convocatoria by next Friday. And then still short term, but a little bit later, call it Q2 this year, there's going to be a second process, which will be for more traditional, private company long-term PPAs where they're not build. So that's expected to be happening in April, May of this year. And so the plan would be to submit more projects from this portfolio into that as well as likely some other ones that based on conversations with other local developers that are quite interested in partnering with us for that. So -- and then beyond that, which I would say is more, call it, a medium term is that those are the two most short-term processes, but that doesn't -- that's not going to be the end of it. We don't -- there's going to be more abilities to contract either directly with CFE or with other. There's numerous sort of approved purchasers of power there on a wholesale basis. And so that's -- we think that, that can be back half of the year or sort of early next year in terms of actual contracting. So there's going to be a lot happening on the development side this year in Mexico. In addition, another opportunity that is there that we're looking at is behind the meter. Given the regulation changes as well as the pent-up demand from industrial consumers there. So we do have several acquisitions we're looking at and projects we're looking at that are behind the meter. And there behind the meter can be up to 20 megawatts. So you can get some scale in behind-the-meter projects now in Mexico. So I would say with Mexico, with the, call it, RFP in Puerto Rico and with ASAP, I would say we are now sitting here with a lot more, call it, development shots on the net than we had 3 months ago, and I would anticipate being able to having -- taking a reasonable success rate. Obviously, we're not going to advance all of those, but that we should be having news in the next 3 to 6 months with defining actual projects that were going to be, call it -- starting to build this year and next year and the following year so that the connecting the dots on the 5-year plan will be much clearer in the next 3 to 6 months. So that's it for the formal remarks. We can open up for questions.
Operator: [Operator Instructions] Our first question is coming from Melissa Dean with National Bank Capital Markets.
Unknown Analyst: Just firstly, I wanted to ask you guys about your M&A pipeline. You mentioned a couple of opportunities in your prepared remarks. Could you just walk us through the pipeline you're seeing in Latin America? And what kind of valuation multiples and IRR you're seeing if anything has changed since the last time we spoke? And then you also mentioned in your prepared remarks a nonbinding LOI that you signed. If you could provide more detail there as well, that would be great?
Marc Murnaghan: Yes. Just on that one, given it's not [indiscernible] haven't press released, but it's not a large project. It's -- but it's really strategic in terms of it's essentially colocated with one of our other solar projects. So I think there's a high degree or likelihood we convert that to a mining deal, but it's -- just think of it as about 10 megawatts. So it's not huge, but we quite like the economics. And it's -- there's just synergies there. So it's -- we think it's a good transaction. In terms of the overall pipeline, I would say in terms of multiple things we're generally looking at, it is a range. I would say it's maybe at 6.5 to 7 on the low end, 8.5 to 9 on the high end. But it's -- I don't -- I wouldn't say that it's really increased in terms of our pipeline. And partly, that's just because we are in several processes, but we've seen a lot more of what I would call mid- to late-stage development, which are technically acquisitions, but they're really just us coming in and taking over that's really, really increased. And when we look at those, when you -- whether it's batteries or solar or the combination of the two, the construction risk and the construction timeline being, call it, we think the risk is relatively low. The timelines are relatively low, that you're all in sort of multiple on those is just significantly lower than what we're seeing on the acquisition side that the gap doesn't justify really going for these acquisitions. It justifies going for, call it, the shovel-ready or 6 months shovel-ready type projects, which is what we're seeing in, for sure, Puerto Rico, a couple of the other markets and for sure Mexico now. So I would say that -- we want people to think there's a ton of M&A activity for this year. I think it's going to be much more on the late-stage development activity.
Unknown Analyst: Okay. So you're seeing a stronger skew of potential for, I guess, in development assets than operating or better returns, I guess, right now at this point?
Marc Murnaghan: Yes. And part of that, too, is I would say there's been a real push by offtakers in all the jurisdictions we're seeing where there's activity to -- that are forcing developers to basically partner with people with a balance sheet, track record and ability to put LCs or guarantees prior to getting contracts. So the developers can't go all the way to having a PPA in hand and then selling it to the top bidder. It's just not possible anymore. So they're being forced to basically to come sooner, which is making the economics more attractive for, call it, companies like ourselves that do have access to capital.
Unknown Analyst: Okay. Perfect. That's very helpful. And just on the Mexico opportunity that you mentioned, you said, I think, some 1,000 megawatts of project availability, signed an exclusivity agreement. Can you talk about the PPA structures you're seeing in the Mexico market in terms of contract duration? And what kind of IRR opportunities you're seeing there as well?
Marc Murnaghan: Yes. So the duration are, I'd say, low end 15, but 20 to 25 would -- is typical. So good duration. But the way that you are required to have 3 hour -- sorry, 30% coverage with storage for 3 hours, so not 4, which is interesting. But so as long as you have that, you can get capacity. So it's not just -- they're not just energy PPAs. They're sort of energy plus capacity. So -- and I would say that the economics sort of breakdown that it's, call it, set approximately 70% is your energy and 30% is your capacity, but they're both -- you're actually getting contracted for the capacity for the life of it. You are not having to -- it's not as if you get a contracted energy price and then you're going spot on the capacity. If you're getting that, you're getting both for the life of the contract. In terms of IRRs, I would say, for the cleanest sort of CFE, highest credit quality, you are going to be in the 12% to 14% and then IRR and then others, we're seeing -- bring that 13% to 16%. So I'd still say your -- it's mid-teens, maybe 14% is the right number. But strategically for the company, I think what we're really trying to do. So it's not as high as what we see, for instance, Puerto Rico or, call it, Dominican or call it Caribbean. But we do think that bringing on those megawatts is much more, call it, predictable in terms of timeline. It's much bigger in the market, so we don't need a huge win, it's a very small market share that we need to be, call it, material for Polaris. But so the combination, I would say, of, call it, megawatts coming from that market in Mexico on a much more, call it, bankable basis with a much higher impact returns from the Caribbean is the combination we're looking for. Now a lot of that realistically, though, in Mexico is not going to be shovel ready until, call it, Q4 or Q1 of next year. So the timing of it is important, too, which is we get the ASAP, and that's going to become this year's big CapEx project, but then we will have something, I would say, in Mexico on the backs of that, but more for next year.
Unknown Analyst: Okay. Understood. And just for the Mexico projects, the construction timeline, I believe, for SO1 and Puerto Rico was 12 months or less. Are you seeing similar construction timelines for Mexico? Or do they differ quite materially?
Marc Murnaghan: No, I would say 12, 15 months, similar, very similar.
Operator: Our next question is coming from Nicholas Boychuk with ATB Cormark.
Nicholas Boychuk: Just coming back to the PR. I'm wondering if you can kind of expand a little bit more on that curtailment issue, specifically how much it might impact this year, if there's anything you can do about it? And I know you mentioned that they are looking to do battery energy storage, but it feels like that absolutely has to happen here. And I'm curious what signals you're getting from the regulators in the Dominican as to the size and urgency of needing battery energy storage on their grid?
Marc Murnaghan: Yes. So we were about 6,000 megawatt hours last year. It's hard to gauge exactly where it's going to land this year. I think that's a reasonable number. I think our budget to be conservative as we assume sort of 10,000 for this year and then we think it will drop because we do -- we know that they are taking the storage seriously. I don't want to sort of really promise anything on sort of us doing more storage there, though, but we're -- you know that we're going to try to be in the mix. What I can say is that the -- we do know they're taking it very seriously. And we -- based on what we have heard from them and what we're seeing them do is that they would agree with our assessment, which is the best way sort of forward here is to have numerous sites, call it, storages transmission is to absorb that energy in the middle of the day. I mean they have very expensive cost energy and need at night, so it's not as if they're awash in energy from 6 to 10 p.m., they need it. It's that they just don't [ need ] much during the day. So I don't think there's any disagreement now in terms of the way forward. It's just -- it's going to be hard to [indiscernible] exactly what we can do there. So I think short term, call it more curtailment this year, but I do think they'll get their act together, such that next year, they will have resolved the situation at some point next year in terms of the actual curtailment. We're going see what we can do. We'll see what we can do in terms of -- and I think if we can do that, as long as they do that, I think it is a market you still want to participate in, in some form or fashion, yes.
Nicholas Boychuk: Understood. You mentioned there's a couple of new relationships with local developers, and it sounds like the activity in that sphere is really picking up. I'm curious if you can expand a little bit on the drivers behind that. Is it -- is it as much the lack of capital in the local market where you guys need to partner with someone like yourself? You mentioned that, but I'm curious if there's also a bit of a nationalization in energy sovereignty and these regulators are pushing more of this in their market to decouple from things like fossil fuels? And I guess the whole point of the question is trying to figure out, is this the earliest innings of a push like this? And are we going to see a lot more activity in the coming 6, 12 18 months?
Marc Murnaghan: So this -- so in terms of actual -- I would say that the dynamic that I was mentioning of developers are being sort of forced to talk to companies like us earlier. I would say we're seeing that in every market that we're in. And that's just I think that the driving factor is more the -- whichever the government entity is that's running a process or that the contracting entity I think have had experiences where they're just [indiscernible] a lot of developers that couldn't get a project to the finish line. And so that just seems to be a threat in all these markets. So it's not specific to anyone. So I think that's the reason why it's happening. And I think we're just in a nice position there with cash on the balance sheet and operating track record in the region that we tick the boxes. And so it was literally just -- we started looking at projects presence in Mexico last January quietly and met with a bunch of the different government entities. And it was only because of that, that we actually got invited to participate. So we didn't even actually have -- when we got the invitation to participate, we didn't have a specific project. We have specific projects now that we're going to be submitting, but we got invited to participate just because of our CV, call it. But no sort of small developers without an operating experience were invited. I don't know if I'm answering because I think there were several questions in your question, so you ask away if I didn't answer them all.
Nicholas Boychuk: I guess the only other thing is if you're hearing anything about energy sovereignty and the decoupling of fossil fuels?
Marc Murnaghan: Energy, what? I missed that word, Nick.
Nicholas Boychuk: Energy sovereignty, like just making sure that these grids are not in any way tied to external markets like the U.S. supply and fossil fuels and natural gas and diesel.
Marc Murnaghan: No, I wouldn't -- I'm not hearing that. I think they do want to be self sufficient. I think unfortunately, it started -- on that issue, Nick, I'd say it's almost different for every different market we're looking at. So for instance, obviously, Puerto Rico is part of the United States. So it's got its own -- it's got its own character. Mexico, I would actually say as being a Canadian company is quite helpful there. And DR, I would say it hasn't -- where -- there it has much more to do with, call it, the too much energy in the day, i.e., curtailment issue is absolutely the driving factor. So I would say there's no common thread on that front in the different markets that we're in.
Nicholas Boychuk: Makes sense. And then last for me, just on timing and magnitude of CapEx. So if ASAP goes through with this now being quorum board, when do you think that would turn on? And how are you thinking about overall capital availability for that, potentially battery energy storage in the Dominican, these other RFPs in Puerto Rico, your 1,000 megawatts in Mexico, puts a lot of irons in the fire. How are you feeling about the balance sheet?
Marc Murnaghan: Yes. So I would also say that we've moved a bit to last year was we had one -- like we had other irons in the fire, as you know, but it was -- we really were focused on the ASAP. So we are -- I'm much more -- we're more on the -- have many more irons in the fire and then to get the optionality for us. I would also say that I am relatively confident that with our cash position, but also still a conservative balance sheet that our ability to raise, I would say, fixed income capital to top up there, is quite significant and at rates that are better than what we did before. And that can really -- and those rates can work in all of these markets we're looking at in terms of the growth opportunities. So we want a lot more irons in fire and I think we can fund what we're looking at. And so the theories of let's get to the point where we have call it, too much to do, and then we have to start paring back and choosing. But I would say this year, it's still most likely, call it, the tiny acquisition, ASAP. And then call it, announcements and dotting the Is, crossing the Ts on CapEx programs that are realistically going to start maybe Q4, but I'd say more likely start in Q1, Q2, Q3 next year for projects that are coming online. So if you call it ASAP is coming online Q1, Q2 next year, the rest of it is, call it, 12 months behind that and I would say 12 and 24 months behind that. So you're going to see sort of some clarity on what '27 is going to look like. The CapEx this year for '27, cash flow, but also then having a line of sight on realistically CapEx for '27 and '28 for revenue, cash flow in '28, '29. And everything we're seeing at least that we're working on is such that it's all, I would say, chunky enough that they call it the numbers that we have in our presentation for where it'd be in 2029, we're definitely -- they're big enough to get there. And one add I would say is that I wouldn't say this, say, for Puerto Rico or Dominican, but what I would say for Mexico is if there's too much. I don't think there's going to be, I think we need to assume there's a certain hit rate, right? But if there was, I would say there's a lot of local capital there that is very interested in participating alongside companies like ours. So I do think that there's possibly -- it's early days, but I do think there's a possibility that you have -- we don't need to be 100% of the local sort of SPV. If there's a lot of megawatts there, I think we can find relatively attractively priced capital, both on the debt and equity side there.
Operator: As we have no further questions on the lines at this time, this will conclude today's Q&A session and today's conference. You may disconnect your lines at this time, and have a wonderful day, and we thank you for your participation.
Marc Murnaghan: Thank you.
Alba Ballesteros: Thank you.