- Revenues Proportionate up 3% to $198.4
million in Q2 2021 compared with Q2 2020.
- Adjusted EBITDA Proportionate up 4% to $146.0 million in Q2 2021 compared with Q2
2020.
- Commissioning of the Griffin Trail wind facility in
Texas and ramp-up of production at
the Hillcrest solar facility in Ohio.
- Completion of the Energía Llaima acquisition at the beginning
of Q3 2021.
- Exclusion of the results from the Flat Top and Shannon joint
venture facilities, from April 1,
2021 onwards, due to the projects' assets and liabilities
being classified as disposal groups held for sale, following the
February 2021 Texas Events.
- The Corporation acquired an 18 MW run-of-river hydro facility
in Chile. The transaction closed
on August 3, 2021. The facility
commissioned in 2011 was acquired for a total enterprise value of
US$40.5 million ($50.5 million) with an equity investment for
Innergex of US$16.6 million
($20.6 million), broken down to
payment to the shareholders and the partial repayment of the
existing debt and other costs.
All amounts are in
thousands of Canadian dollars, unless otherwise indicated and are
for continuing operations unless otherwise
indicated.
|
LONGUEUIL, QC, Aug. 3, 2021 /CNW/ - Innergex Renewable Energy
Inc. (TSX: INE) ("Innergex" or the "Corporation") today
released its operating and financial results for the second quarter
ended June 30, 2021.
"We are pleased that our Hillcrest solar facility in
Ohio reached commercial operation
under its power purchase agreement and that sales of electricity
commenced at the beginning of May. This commissioning along with
higher production at most of our hydro facilities this quarter
compared to the same period last year contributed to delivering
positive results," said Michel
Letellier, President and Chief Executive Officer of
Innergex. "Since the end of the quarter, we have completed the
acquisition of the remaining interest in Energía Llaima and reached
commercial operation with our Griffin Trail wind project in
Texas, both of which align with
our growth strategy. We remain focused on pursuing organic
development and acquisitions to meet our Strategic Plan objectives
and reduce stress on our payout ratio."
FINANCIAL HIGHLIGHTS
|
Three months ended
June 30
|
Six months ended June
30
|
2021
|
2020
|
Change
|
2021
|
February
2021 Texas
Events
(9 days)3
|
2021
Normalized
|
2020
|
Change
|
Production
(MWh)
|
2,396,027
|
|
2,185,793
|
|
10
|
%
|
4,181,975
|
|
—
|
|
4,181,975
|
|
3,865,390
|
|
8
|
%
|
Long-Term Average
(MWh) ("LTA")
|
2,543,061
|
|
2,342,496
|
|
9
|
%
|
4,489,951
|
|
—
|
|
4,489,951
|
|
4,146,730
|
|
8
|
%
|
Revenues
|
170,605
|
|
150,513
|
|
13
|
%
|
360,256
|
|
(54,967)
|
|
305,289
|
|
282,629
|
|
8
|
%
|
Adjusted
EBITDA1
|
122,685
|
|
105,336
|
|
16
|
%
|
265,804
|
|
(54,967)
|
|
210,837
|
|
195,755
|
|
8
|
%
|
Adjusted EBITDA
Margin1
|
71.9
|
%
|
70.0
|
%
|
|
73.8
|
%
|
(4.7)
|
%
|
69.1
|
%
|
69.3
|
%
|
|
Net Earnings
(Loss)
|
50,199
|
|
(1,566)
|
|
(3306)
|
%
|
(167,673)
|
|
64,219
|
|
(103,454)
|
|
(48,497)
|
|
113
|
%
|
Adjusted Net Earnings
(Loss)
|
18,658
|
|
4,484
|
|
316
|
%
|
(8,882)
|
|
—
|
|
(8,882)
|
|
(4,057)
|
|
119
|
%
|
Net Earnings (Loss)
Attributable to Owners, $ per share - basic and diluted
|
0.23
|
|
(0.02)
|
|
|
(1.01)
|
|
0.37
|
|
(0.64)
|
|
(0.36)
|
|
|
Production
Proportionate (MWh)1
|
2,588,928
|
|
2,575,868
|
|
1
|
%
|
4,638,549
|
|
—
|
|
4,638,549
|
|
4,545,631
|
|
2
|
%
|
Revenues
Proportionate1
|
198,400
|
|
192,004
|
|
3
|
%
|
460,135
|
|
(95,273)
|
|
364,862
|
|
356,375
|
|
2
|
%
|
Adjusted EBITDA
Proportionate1
|
145,962
|
|
139,950
|
|
4
|
%
|
354,853
|
|
(95,273)
|
|
259,580
|
|
255,965
|
|
1
|
%
|
Adjusted EBITDA
Proportionate Margin1
|
73.6
|
%
|
72.9
|
%
|
|
77.1
|
%
|
(6.0)
|
%
|
71.1
|
%
|
71.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trailing twelve
months ended June 30
|
|
|
|
|
2021
|
February
2021 Texas
Events
(9
days)2
|
2021
Normalized
|
2020
|
Change
|
Cash Flow from
Operating Activities
|
|
|
|
252,213
|
|
(16,801)
|
|
235,412
|
|
200,742
|
|
17
|
%
|
Free Cash
Flow1
|
|
|
|
76,702
|
|
15,789
|
|
92,491
|
|
73,844
|
|
25
|
%
|
Payout
Ratio1,2
|
|
|
|
164
|
%
|
(28)
|
%
|
136
|
%
|
150
|
%
|
|
1.
|
Adjusted EBITDA,
Adjusted EBITDA Margin, Production Proportionate, Revenues
Proportionate, Adjusted EBITDA Proportionate, Adjusted EBITDA
Proportionate Margin, Free Cash Flow and Payout Ratio are not
recognized measures 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.
|
For the trailing
twelve months ended June 30, 2021, the Free Cash Flow and Payout
Ratio are normalized to exclude the impacts of the February 2021
Texas Events. Please refer to the "February 2021 Texas Events"
section of the 2021 Second Quarter Report for more
information.
|
3.
|
For the six months
ended June 30, 2021, the operating results are normalized to
exclude the impacts of the February 2021 Texas Events. Please refer
to the "February 2021 Texas Events" section of the 2021 Second
Quarter Report for more information.
|
OPERATING PERFORMANCE
For the six-month period ended June 30, 2021, Production
Proportionate was 93% of the LTA and up 2% over the same period
last year. Revenues Proportionate, on a normalized basis,
increased 2% compared to the same period last year. The increase is
attributable to the Mountain Air and Salvador Acquisitions, higher
production at the hydro facilities in British Columbia and the ramp-up of production
at the Hillcrest solar project. This increase was partly offset by
the exclusion of the results from the Flat Top and Shannon joint
venture facilities, from April 1,
2021 onwards, due to the projects' assets and liabilities
being classified as disposal groups held for sale, following the
February 2021 Texas Events. The
increase was also partly offset by lower revenues at the wind
facilities in Quebec and
France and at the Foard City wind facility. Adjusted
EBITDA, on a normalized basis, was up 8% compared to last year
at $210.8 million and the
Adjusted EBITDA Proportionate, on a normalized basis,
increased by 1% at $259.6 million.
In the second quarter of 2021, the hydroelectric power
generation segment generated $74.7
million in Adjusted EBITDA Proportionate, representing a 17%
increase from the $63.8 million
generated in the same period last year, mainly due to a higher
contribution from the facilities in British Columbia, attributable to higher
revenues from higher production mainly due to higher water flows
and compared with the 2020 figures that included the impact of the
curtailment imposed by BC Hydro for six facilities. This increase
is partly offset by lower average selling prices at some facilities
in British Columbia and in
Quebec and by a lower contribution
from the Umbata Falls facility in Ontario due to lower revenues from lower
production. Revenues Proportionate for the segment were up 14% at
$91.2 million. Production
Proportionate was up 16%.
For the three-month period ended June 30, 2021, the wind
power generation segment posted $69.0
million in Adjusted EBITDA Proportionate, on a normalized
basis, representing a 12% decrease over the $78.5 million generated in the same period last
year. This decrease is mainly attributable to the exclusion of the
results from the Flat Top and Shannon joint venture facilities,
from April 1, 2021 onwards, due to
the projects' assets and liabilities being classified as disposal
groups held for sale, following the February
2021 Texas Events. The decrease is also attributable to a
lower contribution from the Quebec
facilities, the Foard City
facility in Texas and the Dokie
facility in British Columbia. The
decrease was partly offset by the Mountain Air Acquisition in
Idaho completed on July 15, 2020, and to a higher contribution from
the facilities in France. Revenues
Proportionate for the segment decreased by 13% to $85.0 million. Production Proportionate was down
18%.
The solar power generation segment generated $19.7 million in Adjusted EBITDA Proportionate in
the quarter, representing a 70% increase from the $11.6 million posted in the same period last year
due mainly to the contribution of the Salvador Acquisition in
Chile on May 14, 2020, the ramp-up of production at the
Hillcrest solar facility in Ohio
and to a higher contribution from the Phoebe facility attributable
to higher revenues from higher average selling prices despite lower
production. Revenues Proportionate for the segment increased by 58%
to $22.2 million. Production
Proportionate was up 30%.
FREE CASH FLOW AND PAYOUT RATIO
The following table summarizes the Free Cash Flow and Payout
Ratio normalized to exclude the impacts of the February 2021 Texas Events, for the trailing
twelve months ended June 30,
2021.
Free Cash Flow and
Payout Ratio calculation1
|
Trailing twelve
months ended June 30
|
2021
|
February 2021
Texas Events
(9 days) 2
|
2021
Normalized
|
2020
|
Free Cash
Flow2
|
76,702
|
|
15,789
|
|
92,491
|
|
73,844
|
|
|
|
|
|
|
Dividends declared on
common shares
|
125,711
|
|
—
|
|
125,711
|
|
111,022
|
|
Payout
Ratio2
|
164
|
%
|
(28)
|
%
|
136
|
%
|
150
|
%
|
1.
|
Free Cash Flow and
Payout Ratio are not recognized measures 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.
|
For the trailing
twelve months ended June 30, 2021, the Free Cash Flow and Payout
Ratio are normalized to exclude the impacts of the February 2021
Texas Events. Please refer to the "February 2021 Texas Events"
section of the 2021 Second Quarter Report for more
information.
|
For the trailing twelve months ended June 30, 2021, the
dividends on common shares declared by the Corporation amounted to
164% of Free Cash Flow. Excluding the impacts from the February 2021 Texas Events, the dividends on
common shares declared by the Corporation amounted to 136% of
Normalized Free Cash Flow, compared with 150% for the corresponding
period last year.
UPDATE ON DEVELOPMENT
(As at August 3, 2021)
On July 26, 2021, the 225.6 MW
Griffin Trail wind farm located in Texas reached its full
commissioning.
The Hillcrest solar project (Ohio) has achieved Commercial Operation for
PPA purposes and is approximately 99% complete. Full commercial
operation is scheduled in Q3 2021. Total estimated costs have been
revised to reflect some cost overruns and ongoing commercial
close-out discussions with the EPC Contractor.
Spillway and diversion excavation has started and is progressing
well for the Innavik hydro project (Quebec). Powerhouse concreting work has begun
and the turbines draft tube elbows and draft tubes are already
installed and poured. Residences bi-energy conversion contract was
awarded by the Kativik Municipal Housing Bureau and phase 1 of the
program will start in Q3 2021. Commercial operation is scheduled in
2022.
At the Tonnerre battery project in France, a supply, construction and maintenance
agreement has been signed with the selected battery supplier, EVLO,
a Hydro-Québec subsidiary. Construction on site has started in
July. Commissioning is expected in Q4 2021.
Projects under development are progressing well. The
Engineering, Procurement and Construction ("EPC") contractors were
selected and Limited Notice to Proceed are in progress at both the
Paeahu and Hale Kuawehi solar and battery storage
projects. Environmental studies are ongoing as other
permitting-related activities at both the Barbers Point and Kahana solar and
battery storage projects in Hawaii.
SUBSEQUENT EVENT
Innergex acquires remaining interests in Energía
Llaima
Innergex has entered into a stock purchase agreement
pursuant to which it has acquired, effective July 9, 2021, the remaining 50% interest in
Energía Llaima SpA ("Energía Llaima"), a renewable energy company
based in Chile, of which Innergex
already owned 50%, for an aggregate consideration of US$71.4 million ($89.4
million).
As a consideration for this transaction, Innergex has issued to
Energía Llaima's shareholders the number of Innergex common shares
for an aggregate value of US$71.4
million at a price per share equal to the 10-day volume
weighted average price prior to the closing of the acquisition, for
a total of 4,048,215 shares issued.
Additionally, as part of the Investor Rights Agreement between
Innergex and Hydro-Québec, Hydro-Québec owns a preferential
subscription right allowing it to maintain its 19.9% ownership.
Therefore, Hydro-Québec can subscribe to Innergex common shares in
connection with any issuance at an equal price, including in the
context of an acquisition. Hydro-Québec also has a subscription
right to maintain its ownership following any annual issuance
pursuant to equity securities, incentive securities or securities
granted in connection with compensation. In that regard, Innergex
has issued, concurrently with the closing of the transaction
described above, 1,148,050 common shares, for total proceeds of
$25.3 million, in order for
Hydro-Quebec to maintain its 19.9%
ownership.
Phoebe Solar Facility - Settlement of Outstanding
Amounts
On July 19, 2021,
Innergex reached an agreement to settle the amounts that remained
unpaid by the Phoebe solar facility following the February 2021 Texas Events. The aggregate cash
disbursement of US$24.0 million
($29.7 million) comprises the
agreed-upon settlement payment for the amounts disputed following
the February 2021 Texas Events, and a payment on the project's
tracking account balance1, net of unpaid energy sold by
the project during the negotiation process.
1.
|
Renewable energy
projects selling energy under a power hedge structure are exposed
to mismatch risk mainly driven by: (1) volume/shape risk, which
represents the risk of a shortfall in the actual energy produced in
comparison to the contractual hourly quantities; and (2) basis
risk, which represents a price differential risk between hub and
node per MWh of contracted energy. To cover for temporary
unfavourable mismatches, counterparties provide projects with a
tracking account; a working capital loan that is repaid with
subsequent favourable mismatches or cash payments.
|
Commissioning Activities - Griffin Trail Wind
Facility
On July 26, 2021,
Innergex completed the commissioning of the 225.6 MW Griffin Trail
wind facility located in north Texas. The construction loan of US$256.2 million ($319.0
million) was repaid on July 30,
2021 by a US$169.2
million ($210.6 million) tax
equity investment, while the Corporation contributed US$115.5 million ($143.8
million) in sponsor equity. The excess contribution of
the tax and sponsor equity funding will be used for construction
related spending and for holdback amounts following the end of the
construction activities.
Weather Conditions in British
Columbia, Canada
Recent weather conditions have caused wildfires to spread
throughout British Columbia. Wind
gusts have caused the Lytton Fire
to move rapidly towards the Kwoiek Creek facility's transmission
line. While the on-site employees are safe and the facility is in
no immediate danger, its operations have been halted temporarily as
the fire caused damages to the transmission line.
It is too early to assess the damages and quantify the losses, both
direct and indirect, but the event is expected to be covered under
the Corporation's insurance facility. A force majeure event has
been notified to BC Hydro under the electricity purchase
agreement.
DIVIDEND DECLARATION
The following dividends will be
paid by the Corporation on October 15, 2021:
Date of
announcement
|
Record
date
|
Payment
date
|
Dividend per
common share
|
Dividend per Series
A
Preferred
Share
|
Dividend per Series
C
Preferred Share
|
August 3,
2021
|
September 30,
2021
|
October 15,
2021
|
$0.180
|
$0.202750
|
$0.359375
|
ADDITIONAL INFORMATION
Innergex's 2021 second quarter
unaudited 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 Wednesday,
August 4, 2021 at 10 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/3y6zw4s or the Corporation's website at
www.innergex.com. Journalists as well as the public may 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.
INVESTOR DAY
The Corporation will hold an investor day
on Wednesday, September 15, 2021 from
9 AM to 12 PM (EDT) for investors and
financial analysts. Please email investorrelations@innergex.com
prior to Wednesday, September 8, 2021
to attend.
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 77
operating facilities with an aggregate net installed capacity of
3,071 MW (gross 3,741 MW) and an energy storage capacity of
150 MWh, including 38 hydroelectric facilities, 32 wind farms and
7 solar farms. Innergex also holds interests in 8 projects
under development, 2 of which are under construction, with a net
installed capacity of 168 MW (gross 205 MW) and an energy storage
capacity of 329 MWh, as well as prospective projects at different
stages of development with an aggregate gross capacity totaling
6,931 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.
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 projected financial
performance, 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 expected
production, the estimated project costs, projected revenues,
projected Revenues Proportionate, projected Adjusted EBITDA and
projected Adjusted EBITDA Proportionate, Projected Free Cash Flow,
Projected 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, of the Corporation's
ability to sustain current dividends and to fund its growth and of
the possible outcomes of the proceedings initiated in Texas with regard to the Flat Top and Shannon
facilities. Such information may not be appropriate for other
purposes.
Forward-looking Information is based on certain key assumptions
made by Innergex, including, without restrictions, assumptions
concerning project performance, economic, financial and
financial market conditions, expectations and assumptions
concerning availability of capital resources and timely performance
by third-parties of contractual obligations, receipt of regulatory
approvals and the divestiture of select assets. Although Innergex
believes that the expectations and assumptions on which such
forward-looking information is based are reasonable, under the
current circumstances, readers are cautioned not to rely unduly on
this forward-looking information as no assurance can be given that
they will prove to be correct. The forward-looking information
contained in this press release is made as of the date hereof and
Innergex does not undertake any obligation to update or revise any
forward-looking information, whether as a result of events or
circumstances occurring after the date hereof, unless so required
by law.
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-
and six-month periods ended June 30, 2021.
Cautionary Statement Regarding Non-IFRS measures
The
unaudited condensed interim consolidated financial statements
for the three- and six-month periods ended June 30, 2021, have
been prepared in accordance with International Financial Reporting
Standards ("IFRS"). However, 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 that these indicators are important, as they provide
management and the reader with additional information about the
Corporation's production and cash generation capabilities, its
ability to sustain current dividends and dividend increases and its
ability to fund its growth. These indicators also facilitate the
comparison of results over different periods. Innergex's share of
Revenues of joint ventures and associates, Revenues Proportionate,
Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted EBITDA
Proportionate, Adjusted EBITDA Proportionate Margin, Innergex's
share of Adjusted EBITDA of joint ventures and associates, Adjusted
Net Earnings, Free Cash Flow, Adjusted Free Cash Flow, Payout Ratio
and Adjusted Payout Ratio are not measures recognized by IFRS and
have no standardized meaning prescribed by IFRS. Please refer to
the "Non-IFRS Measures" section of the Management's Discussion and
Analysis for the three- and six-month periods ended June
30, 2021.
SOURCE Innergex Renewable Energy Inc.