INNERGEX REPORTS FIRST QUARTER 2024 RESULTS
INNERGEX REPORTS FIRST QUARTER 2024 RESULTS |
[08-May-2024] |
Strategic Execution
Q1 2024 Financial Results (compared to same period prior year results)
LONGUEUIL, QC, May 8, 2024 /CNW/ - Innergex Renewable Energy Inc. (TSX: INE) ("Innergex" or the "Corporation") a leading global independent renewable power producer, today reported financial results for the first quarter ended March 31, 2024. "Innergex delivered a positive start to 2024 with Adjusted EBITDA Proportionate1 and Free Cash Flow per Share1 meeting our expectations. Our performance demonstrates the benefits of our portfolio diversification across technologies and geographies," said Michel Letellier, President and Chief Executive Officer. "Our team is focused on executing our growth strategy. In addition to winning 400 MW of wind development projects in Quebec's latest Request for Proposals ("RFP") process, we secured a power purchase agreement ("PPA") with Codelco in Chile, through which we will supply 350 GWh of clean energy per year for 15 years. We remain on track to complete several construction projects during 2024, including the Boswell Springs wind project. Following our capital allocation strategy update earlier this year, we continue to focus on delivering sustainable and disciplined growth by strategically deploying our cash flow to support greenfield development opportunities. Our teams have been active in securing land for new prospective projects in Saskatchewan, British Columbia, Quebec, Ontario, and in our other core markets. Innergex's portfolio is well-aligned with global trends of accelerating demand for power, transition to clean energy, as well as need for energy security and cost competitiveness. Supported by these trends, we remain confident in our ability to execute our growth strategy and consistently create value for our shareholders." FINANCIAL HIGHLIGHTS
FINANCIAL HIGHLIGHTS PER SEGMENT
OPERATING PERFORMANCE FIRST QUARTER 2024 Production in the quarter was marked by a substantial increase in water flows at the hydro facilities in British Columbia and Chile, partly offset by below average wind regimes in most regions. The increase in Revenues and Production Tax Credits compared to the same period last year was mainly due to higher production in the hydro segment in British Columbia and Chile and in the wind segment in Quebec as well as the acquisition of the Sault Ste. Marie solar facilities and higher prices in the wind segment in Chile. Adjusted EBITDA Proportionate1 was favourably impacted by the same factors noted above, partially offset by higher prospective project expenses. CASH FLOW FROM OPERATING ACTIVITIES, FREE CASH FLOW1 AND FREE CASH FLOW PER SHARE1 Cash flows from operating activities for the three months ended March 31, 2024 increased to $81.0 million, compared with $53.3 million in the prior year period. The primary contributor was the decrease in financial expenses paid as a result of the timing of interest payments on certain project and corporate debts compared with the first quarter of 2023. Free Cash Flow1 for the trailing twelve months ended March 31, 2024 increased to $241.8 million, compared with $135.7 million for the corresponding period last year. The increase is mainly due to a gain realized upon disposition of a 30% non-controlling interest in Innergex's portfolio in France, to the Sault Ste. Marie Acquisition and the performance of hydro facilities in British Columbia. Free Cash Flow1 per share for the trailing twelve months ended March 31, 2024 increased to $1.19 from $0.67 for the corresponding period last year. For the trailing twelve months ended March 31, 2024, the dividends on common shares declared by the Corporation amounted to 53% of Free Cash Flow1, compared with 108% for the corresponding period last year, following Innergex updated capital allocation strategy prioritizing the funding of our growth ambitions. PROJECTS UNDER CONSTRUCTION
Innergex continues to advance its projects under construction. The San Andrés battery energy storage project is expected to reach COD in Q2 2024 and tests are ongoing with the National Electricity Coordinator. At the Lazenay project, the first wind turbine generator component deliveries are in progress and the balance of plant work is almost complete. Deliveries of major components were completed at the Hale Kuawehi solar and battery energy storage project in Hawaii. Mobilization has resumed at the Boswell Springs wind project after activities were halted for the winter period. The delivery schedule for major components will begin in Q2 2024. EXECUTING ON GROWTH STRATEGY AND FINANCIAL PRIORITIES On March 1, 2024, Innergex was awarded a 350 GWh per year PPA contract in Codelco's latest RFP in Chile, enhancing the quality of the cash flow profile of the Chilean platform. Under the terms of the agreement, Innergex will supply Codelco (S&P: BBB+) with clean energy produced by its portfolio of assets from 2026 to 2040. The Corporation has a large-scale diversified ~10 GW prospective project portfolio supporting development and upcoming bid activities. Innergex's new capital allocation strategy introduced in February 2024 supports increased investments in organic growth and its ability to self-fund greenfield development to deliver sustainable and accretive growth. The increase in the prospective project expenses results from this new strategy. REAFFIRMING 2024 FINANCIAL GUIDANCE "Our first quarter results were in line with expectations, and we are on track to deliver our full year 2024 targets," said Jean Trudel, Chief Financial Officer. "Innergex remains committed to a disciplined capital allocation strategy to sustainably drive expansion and deliver value to our shareholders." NORMAL COURSE ISSUER BID As at the closing of the market on May 7, 2024, the Corporation purchased and cancelled 944,502 common shares for a total consideration of $7.6 million. DIVIDEND DECLARATION The following dividends will be paid by the Corporation on July 15, 2024:
NON-IFRS MEASURES Revenues and Production Tax Credits Proportionate, Adjusted EBITDA and Adjusted EBITDA Proportionate Description of the measures References in this document to "Adjusted EBITDA" are to operating income, to which are added (deducted) depreciation and amortization, ERP implementation, impairment charges, and the realized portion of the change in fair value of power hedges. References in this document to "Adjusted EBITDA Proportionate" are to Adjusted EBITDA, plus Innergex's share of Adjusted EBITDA of the joint ventures and associates. Innergex believes that the presentation of these measures enhances the understanding of the Corporation's operating performance. Adjusted EBITDA is used by investors to evaluate the operating performance and cash generating operations, and to derive financial forecasts and valuations. Revenues and Production Tax Credits Proportionate and Adjusted EBITDA Proportionate measures are used by investors to evaluate the contribution of the joint ventures and associates to the Corporation's operating performance and cash generating operations, and the contribution of such for financial forecasts and valuations purposes. Readers are cautioned that Revenues and Tax Credits Proportionate, should not be construed as an alternative to Revenues and Production Tax Credits, as determined in accordance with IFRS. Readers are also cautioned that Adjusted EBITDA and Adjusted EBITDA Proportionate, should not be construed as an alternative to operating income, as determined in accordance with IFRS. Please refer to Section 3- Financial Performance and Operating Results of the MD&A for more information. Below is a reconciliation of the non-IFRS measures to their closest IFRS measures:
Adjusted Net Loss References to "Adjusted Net Loss" are to net earnings or losses of the Corporation, to which the following elements are added (subtracted): unrealized portion of the change in fair value of derivative financial instruments, realized loss on the termination of interest rate swaps, realized gain on foreign exchange forward contracts, impairment charges, items that are outside of the normal course of the Corporation's cash generating operations, the net income tax expense (recovery) related to these items, and the share of loss (earnings) of joint ventures and associates related to the above items, net of related income tax. The Adjusted Net Loss seeks to provide a measure that eliminates the earnings impacts of certain derivative financial instruments and other items that are outside of the normal course of the Corporation's cash generating operations, which do not represent the Corporation's operating performance. Innergex uses derivative financial instruments to hedge its exposure to various risks. Accounting for derivatives requires that all derivatives are marked-to-market. When hedge accounting is not applied, changes in the fair value of the derivatives is recognized directly in net earnings (loss). Such unrealized changes have no immediate cash effect, may or may not reverse by the time the actual settlements occur and do not reflect the Corporation's business model toward derivatives, which are held for their long-term cash flows, over the life of a project. In addition, the Corporation uses foreign exchange forward contracts to hedge its net investment in its French subsidiaries. Management therefore believes realized gains (losses) on such contracts do not reflect the operations of Innergex. Innergex believes that the presentation of this measure enhances the understanding of the Corporation's operating performance. Adjusted Net (Loss) Earnings is used by investors to evaluate and compare Innergex's profitability before the impacts of the unrealized portion of the change in fair value of derivative financial instruments and other items that are outside of the normal course of the Corporation's cash generating operations. Readers are cautioned that Adjusted Net Loss should not be construed as an alternative to net earnings, as determined in accordance with IFRS. Please refer to the section 3 - Adjusted Net Loss section of the MD&A for reconciliation of the Adjusted Net Loss. Below is a reconciliation of Adjusted Net Loss to its closest IFRS measure:
Free Cash Flow, Free Cash Flow per Share and Payout Ratio Description of the measures References to "Free Cash Flow" are to cash flows from operating activities before changes in non-cash operating working capital items, less prospective projects expenses, maintenance capital expenditures net of proceeds from dispositions, scheduled debt principal payments, the portion of Free Cash Flow attributed to non-controlling interests, preferred share dividends declared, and gains realized on strategic transactions, plus or minus other elements that are not representative of the Corporation's long-term cash-generating capacity, such as realized gains and losses on contingent considerations related to past business acquisitions, transaction costs related to realized acquisitions, expenses related to the implementation of a cloud-based ERP solution, realized losses or gains on refinancing of certain borrowings or derivative financial instruments used to hedge the interest rate on certain borrowings or the exchange rate on equipment purchases, and tax payments related to fiscal strategies for the purpose of improving the long-term cash generating capacity of Innergex. References to "Free Cash Flow per Share" are to Free Cash Flow divided by the weighted-average number of common shares outstanding during the period. Free Cash Flow is a measure of the Corporation's ability to pay a dividend and its ability to fund its growth from its cash generating operations, in the normal course of business, and through strategic transactions. Free Cash Flow per Share is a measure of the Corporation's ability to derive shareholder returns on a per-share basis from its cash generating operations, in the normal course of business, and through strategic transactions. Innergex believes that the presentation of these measures enhance the understanding of the Corporation's cash generation capabilities, its ability to pay a dividend and its ability to fund its growth. In addition, Free Cash Flow per Share enhances the understanding of the impacts to shareholder returns regarding the Corporation's capital structure decisions. Free Cash Flow and Free Cash Flow per Share are used by investors in this regard. Readers are cautioned that Free Cash Flow and Free Cash Flow per Share should not be construed as an alternative to cash flows from operating activities, as determined in accordance with IFRS. References to "Payout Ratio" are to dividends declared on common shares divided by Free Cash Flow. Innergex believes that this is a measure of its ability to pay a dividend and its ability to fund its growth. Payout Ratio is used by investors in this regard.
ADDITIONAL INFORMATION ANNUAL MEETING OF SHAREHOLDERS CONFERENCE CALL AND WEBCAST About Innergex Renewable Energy Inc. Cautionary Statement Regarding Forward-Looking Information Forward-Looking Information includes future-oriented financial information or financial outlook within the meaning of securities laws, including information regarding the Corporation's targeted production, the estimated targeted revenues and production tax credits, targeted Revenues and Production Tax Credits Proportionate, targeted Adjusted EBITDA and targeted Adjusted EBITDA Proportionate, targeted Free Cash Flow, targeted Free Cash Flow per Share and intention to pay dividend quarterly, the estimated project size, costs and schedule, including obtainment of permits, start of construction, work conducted and start of commercial operation for Development Projects and Prospective Projects, the Corporation's intent to submit projects under Requests for Proposals, the qualification of U.S. projects for PTCs and ITCs and other statements that are not historical facts. Such information is intended to inform readers of the potential financial impact of expected results, of the expected commissioning of Development Projects, of the potential financial impact of completed and future acquisitions and of the Corporation's ability to pay a dividend and to fund its growth. Such information may not be appropriate for other purposes. Forward-Looking Information is based on certain key assumptions made by the Corporation, including, without restriction, those concerning hydrology, wind regimes and solar irradiation; performance of operating facilities, acquisitions and commissioned projects; availability of capital resources and timely performance by third parties of contractual obligations; favourable economic and financial market conditions; average merchant spot prices consistent with external price curves and internal forecasts; no material changes in the assumed U.S. dollar to Canadian dollar and Euro to Canadian dollar exchange rate; no significant variability in interest rates; the Corporation's success in developing and constructing new facilities; no adverse political and regulatory intervention; successful renewal of PPAs; sufficient human resources to deliver service and execute the capital plan; no significant event occurring outside the ordinary course of business such as a natural disaster, pandemic or other calamity; continued maintenance of information technology infrastructure and no material breach of cybersecurity. For more information on the risks and uncertainties that may cause actual results or performance to be materially different from those expressed, implied or presented by the forward-looking information or on the principal assumptions used to derive this information, please refer to the "Forward-Looking Information" section of the Management's Discussion and Analysis for the three months ended March 31, 2024. SOURCE Innergex Renewable Energy Inc. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Company Codes: Toronto:INE |