Polaris Renewable Energy Q2 Earnings Call Highlights

Second-quarter generation fell 7.7% year over year , while revenue declined 5% and adjusted EBITDA dropped 11%, primarily due to Dominican Republic curtailment, lower Nicaragua geothermal output and more normal hydro conditions in Peru and Ecuador. Dominican Republic curtailment improved to 29% in the quarter from 42% in Q1, while Nicaragua’s binary plant operated about 0.75 MW below capacity; Polaris expects a potential recovery through an acidification program in early 2027. Polaris is advancing growth projects, including the Puerto Rico ASAP battery project targeted for mid-2027 operation and 250 MW of solar capacity in Mexico with battery storage. Management estimates the Mexican projects could generate roughly $25 million to $30 million in combined EBITDA . Polaris Renewable Energy TSE: PIF reported lower second-quarter generation and financial results compared with an exceptionally strong period a year earlier, as curtailment in the Dominican Republic, normalizing hydrological conditions and expected geothermal declines weighed on output. Chief Financial Officer Alba Seisdedos said consolidated generation declined 7.7% from the second quarter of 2025, while year-to-date generation was down 6.4% from the first half of the prior year. The company said the performance was broadly consistent with management expectations. The decline reflected continued curtailment in the Dominican Republic, lower geothermal production in Nicaragua associated with the natural decline of the steam field, and a return to more typical water conditions in Peru and Ecuador after unusually favorable hydroelectric availability in 2025. Stronger solar production in Panama partly offset those factors. Operations Reflect Expected Production Pressures In Nicaragua, Seisdedos said the steam units performed well and production trends were in line with expectations. First-half production was affected by planned biannual major maintenance on Unit 3 during the first quarter, as well as lower binary-plant output resulting from higher-than-expected sediment in reinjection wells after the maintenance work. Chief Executive Officer Marc Murnaghan said the company has been operating the binary unit at roughly 0.75 megawatts below its expected capacity because of sediment in two key injection wells. Polaris expects to operate at the current level for the remainder of 2026 but anticipates recovering some or all of the lost output through an acidification program in early 2027. “We will likely have to wait until Q1 to execute that,” Murnaghan said, citing the need for specialized equipment. Peru’s hydroelectric facilities produced below the prior year’s record levels but remained above internal expectations, according to Seisdedos. Murnaghan said output was more consistent with levels seen in 2022 through 2024 and broadly in line with the long-term average. He also noted that a May 1 price increase averaged approximately 8% across the company’s three Peruvian plants. Dominican Republic curtailment averaged 29% during the quarter and 35% year to date, improving from 42% in the first quarter. Murnaghan said curtailment reduced output by about 5,000 megawatt-hours in the quarter, somewhat less than budgeted. He expects government initiatives, including large-scale grid storage contracted as transmission assets, to provide a more complete solution over the next 18 to 24 months. Revenue and EBITDA Decline as Costs Rise Seisdedos said lower production led to an 8% decline in revenue quarter-to-quarter and a 5% decline year-over-year. Adjusted EBITDA fell 11% on both a quarter-to-quarter and year-over-year basis. Higher pricing in Peru, supported by annual consumer-price-index adjustments in power purchase agreements and favorabl...