INNERGEX Q3 2023 BATTERY STORAGE FACILITY COMMISSIONED AND TWO FUNDING INITIATIVES COMPLETED
Achieved commissioning of the Salvador 50 MW/250 MWh (5 hours) battery storage project in Chile
Closed a partnership with Crédit Agricole Assurances for a 30% minority interest in Innergex's France portfolio to accelerate and fund growth
Achieved Tax Equity commitment for the 329.8 MW Boswell Springs wind project in Wyoming, USA
Revenues and Production Tax Credits were up 9%
All amounts are in thousands of Canadian dollars, unless otherwise indicated. |
LONGUEUIL, QC, Nov. 8, 2023 /CNW/ - Innergex Renewable Energy Inc. (TSX: INE) ("Innergex" or the "Corporation") provides today an update on its funding initiatives, its development activities and its operating and financial results for the third quarter ended September 30, 2023.
"Our team's focus on execution is reflected in our ability to close funding initiatives, bring projects to commercial operation and advance solid potential projects. With the closing of both the tax equity financing for the Boswell Springs project and the partnership with Crédit Agricole Assurances in France, we are well positioned to continue to invest in greenfield development across our markets," said Michel Letellier, President and Chief Executive Officer of Innergex. "We remain efficient in both operating our facilities and growing our business. We continue to adapt and improve our approach to develop sustainable, secure and financially-sound projects to maximize our returns. The energy transition is supported more evidently every day translating into massive opportunities for Innergex. Our team continues to develop proactively projects to not only seize but create the opportunities that will strengthen our position as a leader in the renewable energy sector."
The Corporation executed the commissioning of its Salvador battery storage project. The Corporation also executed on two of its funding initiatives: the closing of a US$322.7 million ($441.6 million) tax equity commitment for its Boswell Springs wind facility and the completion of its partnership agreement with Crédit Agricole Assurances for a 30% minority interest in Innergex's portfolio in France, representing a €129.5 million ($188.8 million) investment.
PROJECTS UNDER CONSTRUCTION
Name (Location) | Type | Ownership % | Gross | Gross | PPA term | Expected | |||||
Innavik (QC, Canada) | Hydro | 50 | 7.5 | 54.7 | 40 | 2023 | |||||
San Andrés Battery Storage (Chile) | Storage | 100 | Note | 3 | — | — | 2023 | ||||
Hale Kuawehi (Hawaii, U.S.) | Solar | 100 | 30.0 | 1 | 87.4 | 2 | 25 | 2024 | |||
Boswell Springs (Wyoming, U.S.) | Wind | 100 | 329.8 | 1262.0 | 30 | 2024 | |||||
1. Solar project with a battery storage capacity of 30 MW/120 MWh (4 hours). |
2. PPA is a fixed lump sum capacity payment for the availability of dispatchable energy. |
3. Battery storage capacity of 35 MW/175 MWh (5 hours). |
The Salvador battery energy storage project was commissioned in October 2023, generating revenues from the sale of energy. It is expected to be receiving capacity payments towards the end of the year. An official inauguration event took place on site with several Chilean government representatives. The Innavik hydro project started delivering power to the Inuit community of Inukjuak, Nunavik, Quebec, while commissioning activities are ongoing. The San Andrés battery storage project is also advancing, the interconnection was completed and the commissioning should begin by the end of the year. At Boswell Springs, the construction activities are ahead of schedule, while the site will be closing in the coming days for the winter season. In Hawaii, the Hale Kuawehi amended PPA, with a 56% rate increase, executed with HECO was approved by the Public Utility Commission and construction activities are progressing.
PROSPECTIVE AND DEVELOPMENT PROJECTS
Regarding the Corporation's portfolio of prospective projects, growth continues in all regions. The Canadian market development team participated in the 1,500 MW request for proposals ("RFP") of Hydro-Québec. Two projects for a total of 400 MW were proposed. Retained projects are expected to be announced in the coming months. Development activities in Canada have accelerated with many provinces announcing their intention to secure renewable electricity in the months to come. The US market also presents attractive opportunities and significant progress were made with promising greenfield projects. In Chile, Innergex submitted an offer in the RFP launched by Codelco, the main Chilean mining company, for a total of 250 GWh per year of renewable energy production, from 2026 to 2040. In France, the team continues to move projects forward through the administrative and social acceptance stages and to initiate new potential wind and solar projects. During the quarter, 587 MW of new prospective projects were added to the Corporation's portfolio.
FUNDING INITIATIVES
Innergex closed a US$322.7 million ($441.6 million) tax equity commitment ("Upfront Investment") with J.P. Morgan and Capital One (the "Tax Equity Investors") for the 329.8 MW Boswell Springs Wind Project located in Wyoming, United States. The Tax Equity Investors have committed to fund the Upfront Investment at substantial completion and to make cash payments as production tax credits are generated ("PAY-GO") over a 10-year period.
Innergex and Crédit Agricole Assurances, in collaboration with Crédit Agricole Centre-Est, have concluded their long-term partnership. The partnership allows Crédit Agricole Assurances to gain a 30% minority interest in Innergex's portfolio in France, representing a €129.5 million ($188.8 million) investment. The proceeds were used to reduce Innergex's revolving credit facilities and will fund the Corporation's development activities over the coming years.
The Corporation made significant progress with the financing of three unlevered Canadian hydro assets and still expects it to be completed by the end of the year. The targeted proceeds from this financing could total approximately $170 million.
The Corporation also intends to finance another three unlevered Canadian hydro assets in 2024 for an additional approximate amount of $80 million.
FINANCIAL HIGHLIGHTS
The lower water flows in British Columbia, which suffered from an extremely dry summer, and the lower wind regimes in Quebec impacted the overall production of the Corporation, which reached 88% of the long-term average. Had production levels been equal to their long-term average for these two specific items during the three and nine months period ended on September 30, 2023, revenues could have been higher by approximately $30.5 million and $60.3 million, respectively. The recent acquisition of the three Sault Ste. Marie solar facilities in Ontario and overall performance of the other assets in Innergex's portfolio contributed to partly offset the effect of these unusual weather events.
On January 1, 2023, the Corporation amended the presentation of its consolidated statements of earnings (refer to Section 7- Significant Accounting Policies of the Management's Discussion and Analysis for the three- and nine- months ended September 30, 2023 ("MD&A") for more information). Concurrently, certain Non-IFRS measures have been amended (refer to Section 5- Non-IFRS Measures of the MD&A for more information).
Three months ended | Nine months ended | |||
2023 | 2022 | 2023 | 2022 | |
Production (MWh) | 2,654,439 | 2,736,471 | 7,918,191 | 7,896,968 |
Production as a percentage of LTA | 88 % | 91 % | 88 % | 92 % |
Revenues and Production Tax Credits | 292,179 | 268,728 | 780,048 | 715,011 |
Operating Income | 99,778 | 108,002 | 256,069 | 269,870 |
Adjusted EBITDA1 | 180,233 | 167,636 | 512,322 | 476,789 |
Net Earnings (Loss) | 4,381 | 20,980 | 16,150 | (38,540) |
Adjusted Net Earnings (Loss)1 | 5,198 | (465) | 5,113 | (5,034) |
Net Earnings (Loss) Attributable to Owners, $ per share - basic and diluted | 0.04 | 0.11 | 0.06 | (0.20) |
Production Proportionate (MWh)1 | 2,867,819 | 2,993,839 | 8,351,684 | 8,343,421 |
Revenues and Production Tax Credits Proportionate1 | 316,848 | 296,612 | 826,430 | 764,182 |
Adjusted EBITDA Proportionate1 | 201,177 | 191,554 | 548,814 | 515,484 |
Trailing twelve months ended | ||||
2023 | 2022 | |||
Cash Flow from Operating Activities | 311,114 | 412,447 | ||
Free Cash Flow1,2 | 121,200 | 186,327 | ||
Payout Ratio1,2 | 121 % | 78 % | ||
Normalized Payout Ratio1 | 75% - 82% | |||
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 section 5- Non-IFRS Measures for more information. |
2. For more information on the calculation and explanation, please refer to Section 4- CAPITAL AND LIQUIDITY | Free Cash Flow and Payout Ratio of the MD&A. |
OPERATING PERFORMANCE
THREE-MONTH PERIOD ENDED SEPTEMBER 30, 2023
(compared with the same period last year unless otherwise indicated)
Production for the three-month period ended September 30, 2023, was 88% of LTA. Innergex's share of production of joint ventures and associates1 was 87% of LTA, translating into a Production Proportionate1 at 88% of LTA.
Revenues and Production Tax Credits ("PTCs") were up 9% at $292.2 million.
Main contributors:
The Sault Ste. Marie Acquisition, closed on March 9, 2023;
Higher production at the Curtis Palmer facilities in the United States;
Favourable pricing at the Phoebe and Foard City facilities in the United States;
Higher production at the wind facilities in Chile, the United States and France; and
Higher revenues from new PPAs at wind facilities in France.
Main offsets:
Lower production at the hydro facilities in British Columbia;
Lower production at the Quebec wind facilities; and
Unfavourable pricing at the hydro facilities in Chile and the Griffin Trail facility in the United States.
Revenues and PTCs Proportionate1 were up 7% at $316.8 million compared to the same period last year.
NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2023
(compared with the same period last year unless otherwise indicated)
Production for the nine-month period ended September 30, 2023, was 88% of LTA. Innergex's share of production of joint ventures and associates1 was 96% of LTA, translating into a Production Proportionate1 at 89% of LTA.
Revenues and Production Tax Credits ("PTCs") were up 9% at $780.0 million.
Main contributors:
The Aela and Sault Ste. Marie acquisitions;
Higher production at the Curtis Palmer hydro facilities;
Favourable pricing at the Foard City facility;
Higher wind regimes and revenues from new PPAs at wind facilities in France;
Higher selling prices at the Phoebe and Hillcrest solar facilities.
Main offsets:
Lower production at the wind facilities in Quebec;
The BC Hydro Curtailment Payment recorded in Q1 2022;
Lower production at the hydro facilities in British Columbia;
Lower production and unfavourable pricing at the Griffin Trail facility; and
Unfavourable pricing at the hydro facilities in Chile.
Revenues and PTCs Proportionate1 were up 8% at $826.4 million compared to the same period last year.
CASH FLOW FROM OPERATING ACTIVITIES, FREE CASH FLOW3 AND PAYOUT RATIO3
THREE-MONTH PERIOD ENDED SEPTEMBER 30, 2023
(compared with the same period last year unless otherwise indicated)
Cash flows from operating activities decreased at $103.0 million, compared with $184.1 million.
Main contributor:
The realized gain on the settlement of the interest rate swaps as part of Innergex's refinancing of the non-recourse debt of its Chilean facilities in Q3 2022; and
The decrease of the non-cash working capital mainly related to timing.
Main offsets:
The decrease in finance costs paid, stemming mainly from the timing of interest payments for certain project loans and the interest paid upon refinancing of the former non-recourse debt in Chile in 2022, while the interest on the Chile Green Bonds is payable biannually in June and December.
NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2023
(compared with the same period last year unless otherwise indicated)
Cash flows from operating activities decreased at $217.5 million, compared with $336.6 million.
Main contributor:
The realized gain on the settlement of the interest rate swaps as part of Innergex's refinancing of the non-recourse debt of its Chilean facilities in Q3 2022; and
the increase in finance costs paid, stemming mainly from the Chile Green Bonds, the Sault Ste. Marie Acquisition and the timing of interest payments for certain project and corporate loans.
TRAILING TWELVE MONTHS ENDED SEPTEMBER 30, 2023
(compared with the same period last year unless otherwise indicated)
Free Cash Flow2 decreased at $121.2 million, compared with $186.3 million.
Main contributors:
A decrease in cash flows from operating activities before changes in non-cash operating working capital items stemming from the exceptionally low production in British Columbia in Q4 2022 and Q1 2023 due to drier weather, lower wind regimes for the wind facilities in Quebec, and the BC Hydro Curtailment Payment received in Q1 2022;
An increase in the interest paid mainly stemming from the refinancing of the non-recourse debt in Chile in Q3 2022 following the Aela Acquisition, and from the recent Sault Ste. Marie, Mountain Air and French acquisitions; and
An increase in maintenance capital expenditures mainly stemming from the recent acquisitions, from the recent weather-related damages at the Foard City facility, and from major component replacements at the wind facilities in Quebec.
Main offsets:
The contribution to cash flows from operating activities before changes in non-cash operating working capital items from the Aela, Curtis Palmer and Sault Ste. Marie acquisitions;
The increase in average merchant prices on certain USA and Chilean facilities; and
A decrease in Free Cash Flow attributed to non-controlling interests of the British Columbia hydro facilities, following exceptionally low production in British Columbia in Q4 2022 and Q1 2023, partly offset by an increase attributed to the Curtis Palmer Acquisition.
Payout Ratio2
For the trailing twelve months ended September 30, 2023, the dividends on common shares declared by the Corporation amounted to 121% of Free Cash Flow2 compared with 78% for the corresponding period last year.
Had production levels been equal to their long-term average during the trailing twelve months ended September 30, 2023, Free Cash Flow and Payout Ratio would have been in a range of $180 million to $195 million and 75% to 82%, respectively.
SUBSEQUENT EVENTS
On October 19, 2023, the Corporation has closed a US$322.7 million ($441.6 million) tax equity commitment for the Boswell Springs wind project. The proceeds will be received at substantial completion of the construction of the project and used to repay the tax equity bridge loan previously concluded.
On October 26, 2023, the Corporation has completed the long-term partnership with Crédit Agricole Assurances, in connection with Crédit Agricole Centre-Est, for a 30% minority interest in Innergex's portfolio in France, representing a €129.5 million ($188.8 million) investment. The proceeds were used to reduce Innergex's revolving credit facilities and will fund the Corporation's development activities over the coming years.
DIVIDEND DECLARATION
The following dividends will be paid by the Corporation on January 15, 2024:
Date of | Record date | Payment date | Dividend per | Dividend per Series A Preferred Share | Dividend per Series C |
November 8, 2023 | December 31, 2023 | January 15, 2024 | $0.1800 | $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. | 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. |
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 sustain current dividends 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 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
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 September 30, 2023 | Three months ended September 30, 2022 | ||||||
Consolidation | Share of | Proportionate | Consolidation | Share of | Proportionate | ||
Revenues and Production Tax Credits | 292,179 | 24,669 | 316,848 | 268,728 | 27,884 | 296,612 | |
Operating income | 99,778 | 16,919 | 116,697 | 108,002 | 19,690 | 127,692 | |
Depreciation and amortization | 102,434 | 4,025 | 106,459 | 82,953 | 4,228 | 87,181 | |
ERP implementation | 3,175 | — | 3,175 | 542 | — | 542 | |
Realized loss on power hedges | (25,154) | — | (25,154) | (23,861) | — | (23,861) | |
Adjusted EBITDA | 180,233 | 20,944 | 201,177 | 167,636 | 23,918 | 191,554 | |
Nine months ended September 30, 2023 | Nine months ended September 30, 2022 | ||||||
Consolidation | Share of | Proportionate | Consolidation | Share of | Proportionate | ||
Revenues and Production Tax Credits | 780,048 | 46,382 | 826,430 | 715,011 | 49,171 | 764,182 | |
Operating income | 256,069 | 24,281 | 280,350 | 269,870 | 26,049 | 295,919 | |
Depreciation and amortization | 273,365 | 12,211 | 285,576 | 242,297 | 12,646 | 254,943 | |
ERP implementation | 9,093 | — | 9,093 | 542 | — | 542 | |
Realized loss on power hedges | (26,205) | — | (26,205) | (35,920) | — | (35,920) | |
Adjusted EBITDA | 512,322 | 36,492 | 548,814 | 476,789 | 38,695 | 515,484 | |
Adjusted Net Earnings (Loss)
References to "Adjusted Net Earnings (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 Earnings (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 Earnings (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 Earnings (Loss).
Below is a reconciliation of Adjusted Net Earnings (Loss) to its closest IFRS measure:
Three months ended September 30 | Nine months ended September 30 | |||
2023 | 2022 | 2023 | 2022 | |
Net earnings (loss) | 4,381 | 20,980 | 16,150 | (38,540) |
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 | (292) | (300) | (731) | (1,305) |
Unrealized portion of the change in fair value of financial instruments | 678 | 48,026 | (15,790) | 116,523 |
Realized (gain) loss on termination of interest rate swaps | — | (71,676) | (3,712) | (71,676) |
ERP implementation | 3,175 | 542 | 9,093 | 542 |
Realized gain on foreign exchange forward contracts | (344) | (2,040) | (378) | (3,214) |
Income tax expense (recovery) related to above items | (2,400) | 4,003 | 481 | (7,364) |
Adjusted Net Earnings (Loss) | 5,198 | (465) | 5,113 | (5,034) |
Free Cash Flow and Payout Ratio
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 disposals, scheduled debt principal payments, the portion of Free Cash Flow attributed to non-controlling interests, and preferred share dividends declared, plus or minus other elements that are not representative of the Corporation's long-term cash-generating capacity, such as gains and losses on the Phoebe basis hedge due to their limited occurrence, 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 Enterprise Resource Planning 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. Free Cash Flow is a measure of the Corporation's ability to sustain current dividends as well as its ability to fund its growth from its cash generating operations, in the normal course of business.
Innergex believes that the presentation of this measure enhances the understanding of the Corporation's cash generation capabilities, its ability to sustain current dividends and its ability to fund its growth. Free Cash Flow is used by investors in this regard. Readers are cautioned that Free Cash Flow should not be construed as an alternative to cash flows from operating activities, as determined in accordance with IFRS. Please refer to the section 4- Free Cash Flow and Payout Ratio of the MD&A for the reconciliation of Free Cash Flow.
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 sustain current dividends as well as its ability to fund its growth. Payout Ratio is used by investors in this regard.
References to "Normalized Payout Ratio" are to dividends declared on common shares divided by the estimated Free Cash Flow had production levels been equal to their long-term average in all jurisdictions, excluding Chile. Innergex believes that this is a measure of its ability to sustain current dividends as well as its ability to fund its growth, free from circumstantial impacts on production. Normalized Payout Ratio is used by investors in this regard.
Free Cash Flow and Payout Ratio calculation | Trailing twelve months ended | |
2023 | 2022 | |
Cash flows from operating activities1 | 311,114 | 412,447 |
Add (Subtract) the following items: | ||
Changes in non-cash operating working capital items | 39,913 | 24,525 |
Prospective projects expenses | 25,196 | 27,331 |
Maintenance capital expenditures, net of proceeds from dispositions | (27,293) | (9,936) |
Scheduled debt principal payments | (174,507) | (167,578) |
Free Cash Flow attributed to non-controlling interests2 | (30,230) | (39,811) |
Dividends declared on Preferred shares | (5,632) | (5,632) |
Chile portfolio refinancing - hedging impact4 | 5,214 | 765 |
Add (subtract) the following specific items3: | ||
Realized (gain) loss on termination of interest rate swaps4 | (59) | (72,053) |
Realized (gain) loss on termination of foreign exchange forwards5 | (43,458) | — |
Principal and interest paid related to pre-acquisition period | 1,312 | — |
Acquisition and integration costs | 19,630 | 17,224 |
Realized gain on the Phoebe basis hedge | — | (955) |
Free Cash Flow | 121,200 | 186,327 |
Dividends declared on common shares | 147,024 | 144,862 |
Payout Ratio | 121 % | 78 % |
1. | Cash flows from operating activities for the trailing twelve months ended September 30, 2022 include the one-time BC Hydro Curtailment Payment received during Q1 2022. |
2. | 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. |
3. | These 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 gains and losses on the Phoebe basis hedge due to their limited occurrence (maturity attained on December 31, 2021), realized gains and losses on contingent considerations related to past business acquisitions, transaction costs related to realized acquisitions, 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. |
4. | The Free Cash Flow for the trailing twelve months ended September 30, 2022 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. |
5. | The Free Cash Flow for the trailing twelve months ended September 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. |
ADDITIONAL INFORMATION
Innergex's 2023 third quarter condensed interim consolidated financial statements, the notes thereto and the Management's Discussion and Analysis can be obtained on SEDAR at www.sedar.com 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, November 9, 2023 at 9 AM (EST). Investors and financial analysts are invited to access the conference by dialing 1 888 390-0605 or 416 764-8609 or via https://app.webinar.net/QNgY3ReanP4 or the Corporation's website at www.innergex.com. 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, which led to Innergex being recognized as Canada's best corporate citizen in 2023 by Corporate Knights. 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 86 operating facilities with an aggregate net installed capacity of 3,580 MW (gross 4,226 MW) and an energy storage capacity of 409 MWh, including 40 hydroelectric facilities, 35 wind facilities, 9 solar facilities and 2 battery energy storage facilities. Innergex also holds interests in 12 projects under development with a net installed capacity of 747 MW (gross 849 MW) and an energy storage capacity of 355 MWh, 4 of which are under construction, as well as prospective projects at different stages of development with an aggregate gross installed capacity totaling 9,939 MW. Its approach to building shareholder value is to generate sustainable cash flows, provide an attractive risk-adjusted return on invested capital and to distribute a stable dividend. 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 sustain current dividends 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; project performance; availability of capital resources and timely performance by third parties of contractual obligations; favourable market conditions for share issuance to support growth financing; favourable economic and financial market conditions; the Corporation's success in developing and constructing new facilities; 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 September 30, 2023.
SOURCE Innergex Renewable Energy Inc.
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