Strategic Execution
- Executed on a minority sale of interests in a 826 MW renewable energy portfolio in Texas
- Achieved commissioning of the 35 MW/175 MWh (5 hours) San Andrés battery energy storage facility in Chile
- Signed a 30-year PPA with Hydro-Québec for the 100 MW Lotbinière Ndakina and the 300 MW Peshu Napeu wind projects
- Renewed a 25-year PPA for the three Portneuf facilities in Quebec subsequent to quarter end
- Reaffirming full year 2024 financial guidance
Q2 2024 Financial Results
- Adjusted EBITDA Proportionate1 reached $183.9 million, down 8% compared to Q2 2023
- Free Cash Flow per Share1 at $1.35 for the trailing twelve-months ended June 30, 2024
- Payout Ratio1 of 40% for the trailing twelve-months ended June 30, 2024
All amounts are in thousands of Canadian dollars, unless otherwise indicated. |
LONGUEUIL, QC, Aug. 7, 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 second quarter ended June 30, 2024.
"While the hottest temperatures ever recorded on earth continue to break records for a thirteenth month in a row and unusual climate events continue to impact populations across the globe, we strongly believe that our industry, and above all our mission, remain the single greatest tool to mitigate the effects of human-made climate change. With the Paris Agreement objectives in mind and the need for clean electricity increasing, our industry is poised to grow and Innergex is focused on achieving profitable projects that will generate positive returns for our shareholders and our Planet," said Michel Letellier, President and Chief Executive Officer.
"Our teams remain focused on executing on our disciplined growth strategy, through both securing accretive greenfield opportunities such as the 300 MW Peshu Napeu and the 100 MW Lotbinière Ndakina wind projects in Quebec, and delivering on de-risking initiatives such as the sale of minority interests in our Texas assets portfolio. I am proud of our team for consistently ensuring that our assets are maintained and managed in optimal ways enabling us to fully capture the hydro, wind and solar resources when available. Unfortunately this quarter, resources have been abnormally lower than predictive models in some of the regions where we operate," added Mr. Letellier.
FINANCIAL HIGHLIGHTS
Three months ended June 30 |
Six months ended June 30 |
|||
2024 |
2023 |
2024 |
2023 |
|
Production (MWh) |
2,971,065 |
2,951,098 |
5,494,045 |
5,263,754 |
Production as a percentage of LTA |
91 % |
90 % |
93 % |
89 % |
Revenues and Production Tax Credits |
259,972 |
269,541 |
502,507 |
487,869 |
Operating Income |
75,849 |
93,322 |
138,868 |
156,291 |
Adjusted EBITDA1 |
172,912 |
186,989 |
337,646 |
332,089 |
Net Earnings (Loss) |
23,013 |
24,805 |
(14,646) |
11,769 |
Adjusted Net (Loss) Earnings1 |
(3,867) |
11,260 |
(24,100) |
(85) |
Net Loss Attributable to Owners, $ per share - basic and diluted |
0.09 |
0.10 |
(0.12) |
0.02 |
Production Proportionate (MWh)1 |
3,105,950 |
3,123,901 |
5,692,320 |
5,483,869 |
Revenues and Production Tax Credits Proportionate1 |
274,924 |
285,127 |
526,924 |
509,582 |
Adjusted EBITDA Proportionate1 |
183,891 |
199,194 |
354,576 |
347,637 |
Trailing twelve months ended June 30 |
||||
2024 |
2023 |
|||
Cash Flow from Operating Activities |
256,475 |
392,250 |
||
Free Cash Flow1,2 |
275,059 |
115,342 |
1. |
These measures are not recognized measures under IFRS and therefore may not be comparable to those presented by other issuers. Production and Production Proportionate are key performance indicators for the Corporation that cannot be reconciled with an IFRS measure. Please refer to the NON-IFRS MEASURES section for more information. |
2. |
For more information on the calculation and explanation, please refer to the 4- CAPITAL AND LIQUIDITY | Free Cash Flow and Payout Ratio section of the MD&A. |
FINANCIAL HIGHLIGHTS PER SEGMENT
Consolidated |
Proportionate1 |
||||||
Three months ended June 30 |
Three months ended June 30 |
||||||
2024 |
2023 |
Change |
2024 |
2023 |
Change |
||
Revenues and Production Tax Credits |
259,972 |
269,541 |
(4) % |
274,924 |
285,127 |
(4) % |
|
Adjusted EBITDA |
|||||||
Hydro |
81,932 |
88,136 |
(7) % |
91,126 |
98,219 |
(7) % |
|
Wind |
85,534 |
86,091 |
(1) % |
87,319 |
88,213 |
(1) % |
|
Solar |
29,671 |
34,104 |
(13) % |
29,671 |
34,104 |
(13) % |
|
Other corporate expenses2 |
(24,225) |
(21,342) |
(14) % |
(24,225) |
(21,342) |
(14) % |
|
Adjusted EBITDA1 |
172,912 |
186,989 |
(8) % |
183,891 |
199,194 |
(8) % |
1. |
These measures are not recognized measures under IFRS and therefore may not be comparable to those presented by other issuers. Revenues and Production Tax Credits Proportionate, Adjusted EBITDA and Adjusted EBITDA Proportionate are key performance indicators for the Corporation that cannot be reconciled with an IFRS measure. Please refer to the NON-IFRS MEASURES section for more information. |
2. |
Other corporate expenses include corporate general and administrative expenses and prospective project expenses. |
Consolidated |
Proportionate1 |
||||||
Six months ended June 30 |
Six months ended June 30 |
||||||
2024 |
2023 |
Change |
2024 |
2023 |
Change |
||
Revenues and Production Tax Credits |
502,507 |
487,869 |
3 % |
526,924 |
509,582 |
3 % |
|
Adjusted EBITDA |
|||||||
Hydro |
134,966 |
128,872 |
5 % |
147,007 |
138,700 |
6 % |
|
Wind |
203,210 |
199,572 |
2 % |
208,099 |
205,292 |
1 % |
|
Solar |
47,910 |
47,988 |
— % |
47,910 |
47,988 |
— % |
|
Other corporate expenses2 |
(48,440) |
(44,343) |
(9) % |
(48,440) |
(44,343) |
(9) % |
|
Adjusted EBITDA1 |
337,646 |
332,089 |
2 % |
354,576 |
347,637 |
2 % |
1. |
These measures are not recognized measures under IFRS and therefore may not be comparable to those presented by other issuers. Revenues and Production Tax Credits Proportionate, Adjusted EBITDA and Adjusted EBITDA Proportionate are key performance indicators for the Corporation that cannot be reconciled with an IFRS measure. Please refer to the NON-IFRS MEASURES section for more information. |
2. |
Other corporate expenses include corporate general and administrative expenses and prospective project expenses. |
OPERATING PERFORMANCE
SECOND QUARTER 2024
Production in the quarter is primarily explained by below average wind regimes in most regions, lower water flows in British Columbia, as well as lower irradiance and economic curtailment at the Phoebe facility in Texas and at the solar facilities in Chile. These items were partly offset by higher water flows in Quebec and at the Duqueco and Guayacán hydro facilities in Chile, as well as higher wind production at the facilities in the United States and Chile. The decrease in Revenues and Production Tax Credits compared to the same period last year was mainly due to lower production from the wind facilities in Quebec and in France, from the hydro facilities in British Columbia, and from the solar portfolios in the United States and Chile. These items were partly offset by higher production at the hydro facilities in Chile, higher production at the wind facilities in the United States, and higher prices for the wind facilities in Chile. Adjusted EBITDA Proportionate1 was impacted by the same factors noted above and by higher prospective project expenses.
SIX-MONTH PERIOD ENDED JUNE 30, 2024
Production for the six-month period ended June 30, 2024 was marked by below average wind regimes at most facilities across all regions, as well as lower irradiance and economic curtailment at the Phoebe solar facility in Texas and at the Salvador and San Andrés solar facilities in Chile. These items were partly offset by higher water flows in British Columbia, Chile and Quebec and at the Curtis Palmer facilities. 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 Chile and in British Columbia and to the contribution of the Salvador battery energy storage facility in Chile, partly offset by lower prices at the hydro facilities in Chile, lower wind production in France and lower prices at the solar facilities in the United States and 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
For the three months ended June 30, 2024, cash flows used in operating activities totalled $7.9 million, compared with cash flows from operating activities of $61.2 million in the same period last year. The decrease is mainly due to the realized loss on the settlement of the Phoebe power hedge, partly offset by the realized gain on the settlement of the interest rate swaps upon the repayment of the Foard City and Phoebe project debts, concurrent with the Texas Portfolio Transaction. Excluding this transaction, cash flows from operating activities for the three months ended June 30, 2024 totalled $73.3 million. The increase from the comparative period mainly stems from the timing of interest payments on certain long-term loans and borrowings, partly offset by the operating performance previously discussed.
For the six months ended June 30, 2024, cash flows from operating activities totalled $73.1 million, compared with $114.5 million in the same period last year. Similar to the three-month period, the decrease is mainly due to events associated with the Texas Portfolio Transaction referred to previously. Excluding this transaction, cash flows from operating activities for the six months ended June 30, 2024 totalled $154.3 million. The increase from the comparative period mainly stems from the timing of interest payments on certain long-term loans and borrowings.
Free Cash Flow1 for the trailing twelve months ended June 30, 2024 increased to $275.1 million, compared with $115.3 million for the corresponding period last year. The increase is mainly due to the gains realized upon disposition of non-controlling interests in Innergex's portfolios in France and in Texas, to the contribution to Free Cash Flow1 from the Sault Ste. Marie Acquisition, and the higher production at the hydro facilities in British Columbia and the United States, net of Free Cash Flow1 to non-controlling interests. The increase was partly offset by the lower spot prices.
Free Cash Flow1 per share for the trailing twelve months ended June 30, 2024 increased to $1.35 from $0.57 for the corresponding period last year.
For the trailing twelve months ended June 30, 2024, the dividends on common shares declared by the Corporation amounted to 40% of Free Cash Flow1, compared with 127% for the corresponding period last year, following Innergex updated capital allocation strategy prioritizing the funding of our growth ambitions.
PROJECTS UNDER CONSTRUCTION
Name (Location) |
Type |
Ownership |
Gross installed |
Gross estimated |
PPA term |
Expected |
|||||
Hale Kuawehi (Hawaii, U.S.) |
Solar |
100 |
30.0 |
87.4 |
25 |
3.0 |
2024 |
||||
Storage |
30.0 |
2 |
|||||||||
Boswell Springs (Wyoming, U.S.) |
Wind |
100 |
329.8 |
1,262.0 |
30 |
2024 |
|||||
Total Gross Installed Capacity in Construction Activities (MW) |
389.8 |
1. |
This information is intended to inform readers of the projects' potential impact on the Corporation's results. Actual results may vary. These estimates are up-to-date as at the date of this press release. |
|
2. |
Battery storage capacity of 30 MW/120 MWh (4 hours). |
|
3. |
PPA is a fixed lump sum capacity payment for the availability of dispatchable energy. |
Innergex continues to advance its projects under construction. In the quarter, the San Andrés battery energy storage project in Chile reached commercial operation. The 25% interest in the 9 MW Lazenay wind project in France was sold to its co-owner for a nominal profit. Construction activities continue to progress at the Hale Kuawehi solar and battery energy storage project in Hawaii where the substation and switchyard work is expected to be completed by the end of Q3 2024. Priority is to complete photovoltaic arrays, batteries installation, SCADA and communication systems connection and prepare commissioning with the various parties. At the Boswell Springs project in Wyoming, United States, the wind turbines installation is progressing well and the generation-tie line is 99% completed.
EXECUTING ON GROWTH STRATEGY AND FINANCIAL PRIORITIES
On June 20, 2024, Innergex closed a partnership agreement for the sale of minority interests in its 826 MW portfolio of renewable energy facilities in Texas, for a total equity consideration of US$185.7 million ($253.8 million), including customary working capital adjustments (the "Texas Portfolio Transaction"). Net proceeds from the transaction were used primarily to repay the existing Foard City and Phoebe project debts and the power hedge offtake contract in place at Phoebe, with the remainder of US$15.4 million ($21.0 million) to be used for general corporate purposes. This new structure, which departs from the power hedge offtake model, will enable Innergex to improve its overall risk profile and optimize the performance of the Texas assets. The transaction also provided an opportunity to crystallize value from an operating portfolio in Texas while also deleveraging Innergex's balance sheet.
The Corporation continues to participate in Canadian power calls, including in British Columbia where bids are due in September 2024, and is well positioned to capture significant market shares. In the quarter, 30-year power purchase agreements (PPAs) were signed for the 300 MW Peshu Napeu (previously Manicouagan) wind project led by the Innu Council of Pessamit with the RCM of Manicouagan and the 100 MW Lotbinière Ndakina wind project owned in partnership with the RCM of Lotbinière and the Abenaki Councils of Odanak and Wôlinak. Both PPAs are set up as take-or-pay and indexed to a predefined percentage of the Consumer Price Index ("CPI"). Commercial operation is scheduled for 2029 and 2028, respectively.
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
Full year 2024 Adjusted EBITDA Proportionate1 and Free Cash Flow1 per share are expected to be in the range of $725.0 million to $775.0 million, and $0.70 to $0.85, respectively. These projections assume production at 100% of the LTA target as well as 95% asset availability2.
"Our first six months results were below expectations due to limited hydro, wind and solar resources in several regions. However, our ability to maintain high asset availability, to remain efficient in our operations and to pursue our disciplined approach towards capital management support reaffirming our financial guidance for 2024," said Jean Trudel, Chief Financial Officer.
SUBSEQUENT EVENTS
On August 5, 2024, the PPA for the three Portneuf hydro facilities, which reached the end of its initial term in May 2021, was renewed for 25 years indexed to 100% of the Consumer Price Index ("CPI"). This renewal will support advancing the financing of these unlevered assets.
DIVIDEND DECLARATION
The following dividends will be paid by the Corporation on October 15, 2024:
Date of announcement |
Record date |
Payment date |
Dividend per common share |
Dividend per Series A Preferred Share |
Dividend per Series C |
August 7, 2024 |
September 30, 2024 |
October 15, 2024 |
$0.0900 |
$0.2028 |
$0.3594 |
1. |
This is not a recognized measure under IFRS and therefore may not be comparable to those presented by other issuers. Please refer to the "Non-IFRS Measures" section for more information. |
2. |
These assumptions are based on information currently available to the Corporation and this list of assumptions is not exhaustive. Please refer to the Section 5 - OUTLOOK | 2024 Growth Targets of the MD&A for the year ended December 31, 2023 for more information. |
NON-IFRS MEASURES
Some measures referred to in this press release are not recognized measures under IFRS and therefore may not be comparable to those presented by other issuers. Innergex believes these indicators are important, as they provide management and the reader with additional information about Innergex's production and cash generation capabilities, its ability to pay a dividend and its ability to fund its growth. These indicators also facilitate the comparison of results over different periods. Revenues and Production Tax Credits Proportionate, Adjusted EBITDA, Adjusted EBITDA Proportionate, Adjusted Net Loss, Free Cash Flow, Free Cash Flow per Share and Payout Ratio are not measures recognized by IFRS and have no standardized meaning prescribed by IFRS.
Revenues and Production Tax Credits Proportionate, Adjusted EBITDA and Adjusted EBITDA Proportionate
Description of the measures
References in this document to "Revenues and Production Tax Credits Proportionate" are to Revenues and Production Tax Credits, plus Innergex's share of Revenues and Production Tax Credits of the joint ventures and associates.
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:
Three months ended June 30, 2024 |
Three months ended June 30, 2023 |
||||||
Consolidation |
Share of joint ventures |
Proportionate |
Consolidation |
Share of joint ventures |
Proportionate |
||
Revenues and Production Tax Credits |
259,972 |
14,952 |
274,924 |
269,541 |
15,586 |
285,127 |
|
Operating income |
75,849 |
6,422 |
82,271 |
93,322 |
8,136 |
101,458 |
|
Depreciation and amortization |
95,157 |
4,557 |
99,714 |
93,594 |
4,069 |
97,663 |
|
ERP implementation |
2,595 |
— |
2,595 |
3,349 |
— |
3,349 |
|
Realized loss on power hedges1 |
(689) |
— |
(689) |
(3,276) |
— |
(3,276) |
|
Adjusted EBITDA |
172,912 |
10,979 |
183,891 |
186,989 |
12,205 |
199,194 |
1. |
Represents the realized loss on power hedges excluding the $74.5 million realized loss on settlement of the Phoebe power hedge contract concurrent with the Texas Portfolio Transaction, refer to Section1- HIGHLIGHTS | Second Quarter 2024 – Growth Initiatives of the MD&A for more information. |
Six months ended June 30, 2024 |
Six months ended June 30, 2023 |
||||||
Consolidation |
Share of joint ventures |
Proportionate |
Consolidation |
Share of joint ventures |
Proportionate |
||
Revenues and Production Tax Credits |
502,507 |
24,417 |
526,924 |
487,869 |
21,713 |
509,582 |
|
Operating income |
138,868 |
7,869 |
146,737 |
156,291 |
7,362 |
163,653 |
|
Depreciation and amortization |
190,315 |
9,061 |
199,376 |
170,931 |
8,186 |
179,117 |
|
ERP implementation |
5,106 |
— |
5,106 |
5,918 |
— |
5,918 |
|
Realized gain (loss) on power hedges1 |
3,357 |
— |
3,357 |
(1,051) |
— |
(1,051) |
|
Adjusted EBITDA |
337,646 |
16,930 |
354,576 |
332,089 |
15,548 |
347,637 |
1. |
Represents the realized loss on power hedges excluding the $74.5 million realized loss on settlement of the Phoebe power hedge contract concurrent with the Texas Portfolio Transaction, refer to Section1- HIGHLIGHTS | Second Quarter 2024 – Growth Initiatives of the MD&A for more information. |
Adjusted Net (Loss) Earnings
References to "Adjusted Net (Loss) Earnings" 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, realized loss on termination of power hedges, 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) Earnings 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) Earnings 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) Earnings.
Below is a reconciliation of Adjusted Net (Loss) Earnings to its closest IFRS measure:
Three months ended June 30 |
Six months ended June 30 |
|||
2024 |
2023 |
2024 |
2023 |
|
Net earnings (loss) |
23,013 |
24,805 |
(14,646) |
11,769 |
Add (Subtract): |
||||
Share of unrealized portion of the change in fair value of financial instruments of joint ventures and associates, net of related income tax |
(149) |
(315) |
(457) |
(439) |
Unrealized portion of the change in fair value of financial instruments |
(106,130) |
(16,812) |
(86,573) |
(16,468) |
Realized loss on termination of power hedges |
74,496 |
— |
74,496 |
— |
Realized gain on termination of interest rate swaps |
(9,299) |
(3,712) |
(9,299) |
(3,712) |
ERP implementation |
2,595 |
3,349 |
5,106 |
5,918 |
Realized gain on foreign exchange forward contracts |
(19) |
(1) |
(47) |
(34) |
Income tax expense related to above items |
11,626 |
3,946 |
7,320 |
2,881 |
Adjusted Net (Loss) Earnings |
(3,867) |
11,260 |
(24,100) |
(85) |
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 settlement of derivative financial instruments before their contractual maturity, 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.
Trailing twelve months ended June 30 |
||
2024 |
2023 |
|
Cash flows from operating activities |
256,475 |
392,250 |
Add (Subtract) the following items: |
||
Changes in non-cash operating working capital items |
32,886 |
4,231 |
Prospective projects expenses |
34,347 |
26,333 |
Maintenance capital expenditures, net of proceeds from dispositions |
(24,540) |
(18,649) |
Scheduled debt principal payments |
(183,171) |
(167,262) |
Free Cash Flow attributed to non-controlling interests1 |
(44,717) |
(28,652) |
Dividends declared on Preferred shares |
(5,632) |
(5,632) |
Chile portfolio refinancing - hedging impact3 |
4,704 |
4,830 |
Add (subtract) the following specific items2: |
||
Realized (gain) loss on termination of interest rate swaps3 |
(6,894) |
(71,735) |
Realized gain on termination of foreign exchange forwards4 |
— |
(43,458) |
Realized loss on termination of power hedges5 |
74,496 |
— |
Principal and interest paid related to pre-acquisition period |
— |
1,312 |
Acquisition, integration and ERP implementation expenses |
11,940 |
21,774 |
Gains realized on strategic transactions6 |
125,165 |
— |
Free Cash Flow |
275,059 |
115,342 |
Weighted-average number of shares outstanding |
203,377,123 |
203,538,847 |
Free Cash Flow per Share |
1.35 |
0.57 |
Dividends declared on common shares |
110,201 |
146,993 |
Payout Ratio |
40 % |
127 % |
1. |
The portion of Free Cash Flow attributed to non-controlling interests is subtracted, regardless of whether an actual distribution to non-controlling interests is made, in order to reflect the fact that such distributions may not occur in the period they are generated. |
2. |
Certain items are excluded from the Free Cash Flow and Payout Ratio calculations as they are deemed not representative of the Corporation's long-term cash-generating capacity, and include items such as realized gains and losses on contingent considerations related to past business acquisitions, transaction costs related to realized acquisitions, ERP implementation expenses, realized losses or gains on refinancing of certain borrowings or settlement of derivative financial instruments before their contractual maturity, and tax payments related to fiscal strategies for the purpose of improving the long-term cash generating capacity of Innergex. Gains realized on strategic transactions, which allow the Corporation to finance its growth without having to increase leverage or dilute shareholders, are also added to the Free Cash Flow and Payout Ratio. |
3. |
The Free Cash Flow for the trailing twelve months ended June 30, 2023, excludes the $71.7 million realized gain on settlement of the interest rate hedges entered into to manage the Corporation's exposure to the risk of increasing interest rates during the negotiations surrounding the refinancing of the non-recourse debt assumed in the Aela Acquisition and at Innergex's existing Chilean projects. Instead, the gain is amortized in the Free Cash Flow using the effective interest rate method over the period covered by the unwound hedging instruments. |
4. |
The Free Cash Flow for the trailing twelve months ended June 30, 2023, excludes the $43.5 million realized gain on settlement of the foreign exchange forward contracts concurrent with the closing of the French Acquisition. |
5. |
The Free Cash Flow for the trailing twelve months ended June 30, 2024, excludes the $74.5 million realized loss on settlement of the Phoebe power hedge contract concurrent with the disposition of non-controlling interests in Innergex's operating portfolio in Texas. |
6. |
The Free Cash Flow for the trailing twelve months ended June 30, 2024, includes a gain realized over funds invested following the disposition of a 30% non-controlling participation in Innergex's French operating and development portfolio, and the disposition of non-controlling interests in Innergex's operating portfolio in Texas. Such gains realized on strategic transactions are net of tax. The computation of the gain related to the Texas Portfolio Transaction is based on Management's best estimates as of the date of this press release with regards to the impact of the transaction on the tax basis of the assets. |
ADDITIONAL INFORMATION
Innergex's 2024 second quarter condensed interim consolidated financial statements, the notes thereto and the Management's Discussion and Analysis can be obtained on SEDAR+ at www.sedarplus.ca and in the "Investors" section of the Corporation's website at www.innergex.com.
CONFERENCE CALL AND WEBCAST
The Corporation will hold a conference call and webcast on Thursday, August 8, 2024 at 9 AM (EDT). Investors and financial analysts are invited to access the conference by dialing 1 888 390-0605 or 416 764-8609 or via https://bit.ly/3VFdT8H or the Corporation's website at www.innergex.com. To join the conference call without operator assistance, you may register and enter your phone number at https://emportal.ink/45B2viT to receive an instant automated callback. Journalists, as well as the public, can access this conference call via a listen mode only. A replay of the conference call will be available after the event on the Corporation's website.
About Innergex Renewable Energy Inc.
For over 30 years, Innergex has believed in a world where abundant renewable energy promotes healthier communities and creates shared prosperity. As an independent renewable power producer which develops, acquires, owns and operates hydroelectric facilities, wind farms, solar farms and energy storage facilities, Innergex is convinced that generating power from renewable sources will lead the way to a better world. Innergex conducts operations in Canada, the United States, France and Chile and manages a large portfolio of high-quality assets currently consisting of interests in 88 operating facilities with an aggregate net installed capacity of 3,374 MW (gross 4,328 MW), including 41 hydroelectric facilities, 35 wind facilities, 9 solar facilities and 3 battery energy storage facilities. Innergex also holds interests in 12 projects under development with a net installed capacity of 929 MW (gross 1,272 MW), 2 of which are under construction, as well as prospective projects at different stages of development with an aggregate gross installed capacity totaling 9,712 MW. Its approach to building shareholder value is to generate sustainable cash flows and provide an attractive risk-adjusted return on invested capital. To learn more, visit innergex.com or connect with us on LinkedIn.
Cautionary Statement Regarding Forward-Looking Information
To inform readers of the Corporation's future prospects, this press release contains forward-looking information within the meaning of applicable securities laws ("Forward-Looking Information"), including the Corporation's growth targets, power production, prospective projects, successful development, construction and financing (including tax equity funding) of the projects under construction and the advanced-stage prospective projects, sources and impact of funding, project acquisitions, execution of non-recourse project-level financing (including the timing and amount thereof), and strategic, operational and financial benefits and accretion expected to result from such acquisitions, business strategy, future development and growth prospects (including expected growth opportunities under the Strategic Alliance with Hydro-Québec), business integration, governance, business outlook, objectives, plans and strategic priorities, and other statements that are not historical facts. Forward-Looking Information can generally be identified by the use of words such as "approximately", "may", "will", "could", "believes", "expects", "intends", "should", "would", "plans", "potential", "project", "anticipates", "estimates", "scheduled" or "forecasts", or other comparable terms that state that certain events will or will not occur. It represents the projections and expectations of the Corporation relating to future events or results as of the date of this press release.
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 June 30, 2024.
SOURCE Innergex Renewable Energy Inc.
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For more information: Investor Relations, Naji Baydoun, Director - Investor Relations, 450 928-2550 #1263, [email protected]; Media, Karine Vachon, Senior Director - Communications and ESG, 450 928-2550 #1222, [email protected]; Innergex Renewable Energy Inc., www.innergex.com
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