- Acquisition of the San Andrés solar facility in Chile in Q1 2022 adding net 51 MW
- Definitive agreement to acquire the Aela portfolio of wind
assets of net 332 MW in Chile in
Q1 2022
- $172.5 million Bought Deal Equity
Financing and $37.3 million
Concurrent Private Placement in Q1 2022
- Addition of five new projects at the development stage in Q1
2022: Auxy Bois Régnier, Boswell Springs, Palomino, Salvador battery storage and San Andrés
battery storage
- The dispute with BC Hydro regarding the curtailment notices of
May 2020 was settled to Innergex's
satisfaction in Q1 2022
______________________________
|
All amounts are in
thousands of Canadian dollars, unless otherwise
indicated.
|
LONGUEUIL, QC, May 10, 2022
/CNW Telbec/ - Innergex Renewable Energy Inc. (TSX: INE)
("Innergex" or the "Corporation") today released its operating and
financial results for the first quarter ended March
31, 2022.
"I am very pleased to continue our expansion with the
acquisitions announced in Q1 2022, the advancement made to our
portfolio of projects and the addition of 5 projects at a
development stage. I am particularly proud to pursue our growth in
the battery energy storage segment with two projects in
Chile for which we have secured
procurement," said Michel Letellier,
President and Chief Executive Officer of Innergex. "The Quebec
Government's recent announcements for increasing wind and other
renewable energy supply demonstrate the immense growth potential of
Innergex and announces a new era of increased demand for green
electricity in Canada. In
addition, the recent events in Europe and the IPCC report have increased the
political desire for energy self-sufficiency and clean electricity
which bodes well for the renewable energy sector in our
international markets."
FINANCIAL HIGHLIGHTS
|
Three months ended March 31
|
2022
|
2021
|
Impacts from
the February
2021 Texas
Events (9 days)3
|
2021
Normalized3
|
Change
|
Production
(MWh)
|
2,304,600
|
1,785,947
|
—
|
1,785,947
|
29 %
|
Long-Term Average (MWh)
("LTA")
|
2,434,130
|
1,946,893
|
—
|
1,946,893
|
25 %
|
Revenues
|
188,723
|
189,651
|
(54,967)
|
134,684
|
40 %
|
Operating, general,
administrative and
prospective projects expenses
|
58,197
|
46,532
|
—
|
46,532
|
25 %
|
Adjusted
EBITDA1
|
130,526
|
143,119
|
(54,967)
|
88,152
|
48 %
|
Adjusted EBITDA
Margin1
|
69.2 %
|
75.5 %
|
(10.0) %
|
65.5 %
|
|
Net (Loss)
Earnings
|
(34,930)
|
(217,872)
|
64,219
|
(153,653)
|
(77) %
|
Adjusted Net
Loss1
|
(2,336)
|
(27,540)
|
—
|
(27,540)
|
(92) %
|
Net Loss Attributable
to Owners, $ per share
- basic and diluted
|
(0.18)
|
(1.24)
|
0.37
|
(0.87)
|
|
Production
Proportionate (MWh)1
|
2,358,027
|
2,049,621
|
—
|
2,049,621
|
15 %
|
Revenues
Proportionate1
|
216,116
|
261,735
|
(95,273)
|
166,462
|
30 %
|
Adjusted EBITDA
Proportionate1
|
154,911
|
208,891
|
(95,273)
|
113,618
|
36 %
|
Adjusted EBITDA
Proportionate Margin1
|
71.7 %
|
79.8 %
|
(11.5) %
|
68.3 %
|
|
|
|
|
|
|
|
|
Trailing twelve months ended March
31
|
|
2022
|
2021
|
February 2021
Texas Events
(9 days)3
|
2021
Normalized3
|
Change
|
Cash Flow from
Operating Activities
|
290,386
|
276,045
|
(16,801)
|
259,244
|
12 %
|
Free Cash
Flow1
|
129,448
|
73,762
|
15,789
|
89,551
|
45 %
|
Payout
Ratio1,2
|
106 %
|
170 %
|
(30) %
|
140 %
|
|
1.
|
These measures are not
a recognized measure 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 of the Management's Discussion and
Analysis for the three-month period ended March 31, 2022 for more
information.
|
2.
|
For more information on
the calculation and explanation, please refer to the the "Free Cash
Flow and Payout Ratio" section of the Management's Discussion and
Analysis for the three-month period ended March 31, 2022 for more
information.
|
3.
|
For the period ended
March 31, 2021, the operating results, the Cash Flow From Operating
Activities, Free Cash Flow and Payout Ratio are normalized to
exclude the impacts of the February 2021 Texas Events. Normalized
measures are not recognized measures under IFRS and therefore may
not be comparable to those presented by other issuer. Please refer
to the "February 2021 Texas Events" section of the Management's
Discussion and Analysis for the three-month period ended March 31,
2022 for more information.
|
OPERATING PERFORMANCE
Production for the three-month period ended March
31, 2022, was 95% of LTA. Innergex's share of production of
joint ventures and associates1 was 111% of LTA,
translating into a Production Proportionate1 at 95% of
LTA. Revenues were up 40% at $188.7
million compared with the same period last year, for which
Revenues were normalized to exclude the February 2021 Texas Events. This increase is
mainly explained by the contribution of the Curtis Palmer
Acquisition, the BC Hydro Curtailment Payment2, the
Quebec wind facilities resulting
mainly from higher production, the acquisition of the remaining 50%
interest in Energía Llaima, for which results are now included in
Innergex's consolidated revenues, the commissioning of the Griffin
Trail wind and Amazon Solar Farm Ohio - Hillcrest ("Hillcrest")
facilities and the acquisition of the San Andrés facility in
Chile on January 28, 2022. These items were partly offset
by lower average selling prices at the Foard City facility during
the quarter. Revenues Proportionate1 increased by 30% to
$216.1 million over the same
period last year, for which Revenues were normalized to exclude the
February 2021 Texas Events.
For the three-month period ended March 31, 2022,
Operating, general, administrative and prospective projects
expenses were up 25% at $58.2
million compared with the same period last year. The
increase is mainly attributable to higher corporate general and
administrative expenses to support the business, higher maintenance
costs at some of the hydro facilities in British Columbia, the acquisition of the
remaining 50% interest in Energía Llaima, the commissioning of the
Griffin Trail wind and Hillcrest solar facilities, the Curtis
Palmer Acquisition and the San Andrés Acquisition. These items were
partly offset by lower variable expenses following lower revenues
at the Foard City facility. The Adjusted EBITDA1 was 48%
higher at $130.5 million for the
three-month period ended March 31, 2022, compared with
the same period last year, for which the Adjusted
EBITDA1 was normalized to exclude the February 2021
Texas Events. The Adjusted EBITDA Proportionate1 reached
$154.9 million, a 36% increase
compared with the same period last year, for which the Adjusted
EBITDA Proportionate1 was normalized to exclude the
February 2021 Texas Events.
Innergex recorded a net loss of $34.9 million ($0.18 loss per share - basic and diluted) for the
quarter ended March 31, 2022, compared with a net loss
of $217.9 million ($1.24 loss per share - basic and diluted) for the
corresponding period in 2021. This was mainly due to the
February 2021 Texas Events, resulting
in a net unfavourable impact of $64.2
million, the recognition of $112.6
million in impairment charges and a mark-to-market loss on
the Flat Top and Shannon joint ventures in 2021. The decrease in
net loss is also explained by a $71.5 million favourable movement in the
realized portion of changes in fair value of financial instruments
mainly stemming from the net unfavourable impact of the
February 2021 Texas Events and an
$8.2 million increase in other net
income, mainly related to the production tax credits and tax
attributes allocated to the tax equity investors at the Griffin
Trail wind facility, following its commissioning during the third
quarter of 2021. These items were partly offset by a $37.5 million decrease in income tax recovery,
mainly related to the impacts of the February 2021 Texas Events, an unfavourable
$24.3 million unrealized change in
the fair value of financial instruments, a $21.3 million increase in depreciation and
amortization and a $6.8 million
increase in finance costs, mainly attributable to the Energía
Llaima and Curtis Palmer
acquisitions and the Griffin Trail and Hillcrest commissioning in
2021.
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.
|
The BC Hydro
Curtailment Payment refers to the curtailment notices sent by BC
Hydro in May 2020 for six hydro facilities which were disputed by
the Corporation on the basis that, under its Electricity Purchase
Agreements with BC Hydro, BC Hydro can exercise this right but is
required to compensate Innergex for energy that would have been
produced at the facilities in the absence of the curtailment. For
the period from May 22, 2020 to July 20, 2020, actual eligible
energy revenue that would have been produced at the facilities in
the absence of the curtailment amounts to $12.5 million ($14.2
million on a Revenues Proportionate1 basis). The dispute
was settled in the first quarter of 2022 to Innergex's satisfaction
(please refer to the "Capital and Liquidity" section of the
Management's Discussion and Analysis for the three-month period
ended March 31, 2022 for more information).
|
CASH FLOW FROM OPERATING ACTIVITIES, FREE CASH
FLOW2 AND PAYOUT RATIO2
For the three-month period ended March 31, 2022, cash flows
from operating activities totalled $84.9
million, compared with $60.0
million in the same period last year. The increase relates
primarily to the contribution from the Energía Llaima, Licán,
Curtis Palmer and San Andrés
acquisitions, the Hillcrest and Griffin Trail commissioning, and
the BC Hydro Curtailment Payment. These items were partly offset by
the February 2021 Texas Events, which
contributed to a $16.8 million
increase in cash flows from operating activities in the comparative
period, as the Phoebe solar facility's $33.9
million net payable related to the February 2021 Texas Events remained unpaid until
July 19, 2021.
The following table summarizes the Free Cash Flow3
and Payout Ratio3 normalized to exclude the impacts of
the February 2021 Texas Events, for
the trailing twelve months ended March 31,
2022.
Free Cash Flow and
Payout Ratio calculation1
|
Trailing twelve months
ended March 31
|
2022
|
2021
|
February 2021
Texas Events
(9 days)2
|
2021
Normalized2
|
Free Cash
Flow1,2,3
|
129,448
|
73,762
|
15,789
|
89,551
|
|
|
|
|
|
Dividends declared on
common shares
|
137,517
|
125,649
|
—
|
125,649
|
Payout
Ratio1,2
|
106 %
|
170 %
|
(30)
%
|
140 %
|
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 March 31, 2021, the Free Cash Flow and Payout Ratio
are normalized to exclude the impacts of the February 2021 Texas
Events. Normalized measures are not recognized measures under
IFRS and therefore may not be comparable to those presented by
other issuers. Please refer to the "February 2021 Texas Events"
section of the Management's Discussion and Analysis for the
three-month period ended March 31, 2022 for more
information.
|
3.
|
Free Cash Flow for the
trailing twelve months ended March 31, 2021 include the one-time BC
Hydro Curtailment Payment received during the first quarter of
2022.
|
For the trailing twelve months ended March 31, 2022, the
dividends on common shares declared by the Corporation amounted to
106% of Free Cash Flow3, compared with 170% for the
corresponding period last year. Excluding the impacts from the
February 2021 Texas Events (please refer to the "February 2021 Texas Events" section of the
Management's Discussion and Analysis for the three-month period
ended March 31, 2022 for more
information), the dividends on common shares declared by the
Corporation amounted to 140% of Normalized Free Cash
Flow3,4.
3.
|
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.
|
4.
|
Normalized measures are
not recognized measures under IFRS and therefore may not be
comparable to those presented by other issuers. Please refer to the
"February 2021 Texas Events" section of the Management's Discussion
and Analysis for the three-month period ended March 31, 2022 for
more information.
|
UPDATE ON DEVELOPMENT
(As at May 10, 2022)
On January, 28, 2022, Innergex completed the acquisition of the
50.6 MW San Andrés solar farm in Chile ("San Andrés"). The facility,
commissioned in 2014, is located in the Atacama Desert in northern
Chile. San Andrés was acquired for
a total consideration of US$26.8
million ($34.1 million). The
facility is expected to produce a gross long-term average of
approximately 118.9 GWh per year.
On February 3, 2022, Innergex
entered into an agreement to acquire 100% of the ordinary shares of
Aela Generación S.A. and Aela Energía SpA (together "Aela"), a 332
MW portfolio of three newly built operating wind assets in
Chile, for a purchase price of
US$685.5 million ($870.6 million) (the "Aela Acquisition"),
including the assumption of US$385.5
million ($489.6 million)
of existing debt, subject to customary closing adjustments. The
acquisition is expected to close in Q2 2022.
On February 10, 2022, Innergex
entered into foreign exchange forward contracts with an aggregate
notional amount of US$100.0 million
($124.9 million) to manage its
exposure to exchange rate fluctuations related to the purchase
price. In addition, in order to manage its exposure to the risk of
increasing interest rates on a portion of the expected refinancing
of the Aela Acquisition and the existing Chilean projects, Innergex
has entered into forward start interest rate swaps on between
February 17 and March 1, 2022, with an aggregate notional
amount of US$331.2 million
($413.9 million). Furthermore, to
mitigate the interest rate risk related to the Alterra term loan,
Innergex has entered into interest rate swaps between February 24 and February 28, 2022,
respectively, with an aggregate notional amount of $145.0 million.
The Salvador Battery Storage project with a 50 MW/250 MWh (5
hours) capacity and the San Andrés Battery Storage project with a
35 MW/175 MWh (5 hours) capacity were promoted to the development
stage with an expected Commercial Operation Date (''COD'') in
2023.
The Prospective Projects' pipeline will allow several
opportunities in the years to come, with 11 projects currently at
an advanced stage, for a total 508 MW of installed capacity.
During the quarter, some project in construction and development
in the United States faced
challenges related mainly to supply chain issues as well as the
recent decision by the U.S. Department of Commerce to initiate
anticircumvention inquiries into the import of solar panels from
Asian countries, which impacted projects' schedule. For more
information, please refer to the "Construction Activities" and
''Development Activities'' sections of the Management's Discussion
and Analysis for the three-month period ended March 31, 2022.
SUBSEQUENT EVENTS
On April 29, 2022, to take
advantage of the currently favourable energy pricing environment in
France, Innergex entered into
three power purchase agreements for its Antoigné, Porcien and
Vallottes wind facilities (the "New PPAs"), which are to take
effect on August 1, 2022,
concurrently with the termination of the current power purchase
agreements. In addition, the New PPAs effectively increase the
contracted period of the facilities to
December 31, 2025.
On May 10, 2022, the Corporation
amended its existing revolving term credit facility, extending the
term from 2023 to 2027 and increasing the borrowing limit to
$950.0 million.
On May 10, 2022, Innergex
announced that it has awarded Mitsubishi Power an order for two
utility-scale battery energy storage systems ("BESS"). These
projects will be colocated with solar energy and enable peak
shifting by storing excess solar energy during the day and
dispatching at night. Innergex's 68 MW Salvador solar photovoltaic
facility will add 50 MW/250 MWh (5 hours) of energy
storage, and its 50.6 MW San Andrés solar photovoltaic facility
will add 35 MW/175 MWh (5 hours) of energy storage.
DIVIDEND DECLARATION
The following dividends will be paid by the Corporation on
July 15, 2022:
Date of
announcement
|
Record date
|
Payment date
|
Dividend per
common share
|
Dividend per Series
A
Preferred
Share
|
Dividend per Series
C
Preferred Share
|
May 10, 2022
|
June 30,
2022
|
July 15,
2022
|
$0.180
|
$0.202750
|
$0.359375
|
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.
Innergex's share of Revenues of joint ventures and associates,
Revenues Proportionate, Adjusted EBITDA, Adjusted EBITDA Margin,
Innergex's share of Adjusted EBITDA of joint ventures and
associates, Adjusted EBITDA Proportionate, Adjusted EBITDA Margin
Proportionate, Adjusted Net Loss, 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.
Revenues Proportionate, Adjusted EBITDA, and corresponding
Margin and Proportionate measures
References in this document to "Revenues Proportionate" are to
Revenues, plus Innergex's share of Revenues of the joint ventures
and associates, other income related to PTCs, and Innergex's share
of the operating joint ventures' and associates' other income
related to PTCs.
References in this document to "Adjusted EBITDA" are to net
earnings (loss), to which are added (deducted) income tax expense
(recovery), finance costs, depreciation and amortization,
impairment charges, other net income, share of (earnings) loss of
joint ventures and associates, and change in fair value of
financial instruments. 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, other
income related to PTCs, and Innergex's share of other income
related to PTCs of the joint ventures and associates.
References in this document to "Adjusted EBITDA Margin" are to
Adjusted EBITDA divided by revenues. References in this document to
"Adjusted EBITDA Margin Proportionate" are to Adjusted EBITDA
Proportionate, divided by Revenues Proportionate.
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 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. In addition, Revenues Proportionate and
Adjusted EBITDA Proportionate measures help investors seize the
relative importance of PTCs generated by the operations, and
evaluate their contribution to the Corporation's operating
performance, as PTCs form an important part of certain wind
projects' economics in the United
States. Adjusted EBITDA Margin and Adjusted EBITDA Margin
Proportionate are used by investors to understand the relative
weight of certain jurisdictions, which are subject to various
competitive and energy pricing environments, to the Corporation's
and its reportable segments' operating performance. Readers are
cautioned that Revenues Proportionate, should not be construed as
an alternative to Revenues, as determined in accordance with IFRS.
Readers are also cautioned that Adjusted EBITDA, Adjusted EBITDA
Proportionate, Adjusted EBITDA Margin, and Adjusted EBITDA Margin
Proportionate, should not be construed as an alternative to net
earnings, as determined in accordance with IFRS. Please refer to
the "Financial Performance and Operating Results" section for more
information.
Below is a reconciliation of the non-IFRS measures to their
closest IFRS measures:
|
|
Three months ended
March 31, 2022
|
Three months ended
March 31, 2021
|
|
|
Consolidation
|
Share of joint
ventures
|
PTCs
|
Proportionate
|
Consolidation
|
Share of joint
ventures
|
PTCs
|
Proportionate
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
188,723
|
8,346
|
19,047
|
216,116
|
189,651
|
54,661
|
17,423
|
261,735
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
(34,930)
|
—
|
—
|
(34,930)
|
(217,872)
|
—
|
—
|
(217,872)
|
Income tax (recovery)
expense
|
|
(3,770)
|
—
|
—
|
(3,770)
|
(41,283)
|
773
|
—
|
(40,510)
|
Finance
costs
|
|
66,401
|
4,424
|
—
|
70,825
|
59,600
|
9,095
|
—
|
68,695
|
Depreciation and
amortization
|
|
80,231
|
4,195
|
—
|
84,426
|
58,885
|
8,955
|
—
|
67,840
|
Impairment of long-term
assets
|
|
—
|
—
|
—
|
—
|
—
|
112,609
|
—
|
112,609
|
EBITDA
|
|
107,932
|
8,619
|
—
|
116,551
|
(140,670)
|
131,432
|
—
|
(9,238)
|
Other net income,
before PTCs
|
|
(1,082)
|
(175)
|
—
|
(1,257)
|
(515)
|
1,601
|
—
|
1,086
|
Production tax credits
("PTCs")
|
|
(19,047)
|
—
|
19,047
|
—
|
(11,389)
|
(6,034)
|
17,423
|
—
|
Share of losses of
joint ventures and associates
|
|
2,208
|
(2,208)
|
—
|
—
|
207,984
|
(207,984)
|
—
|
—
|
Change in fair value of
financial instruments
|
|
40,515
|
(898)
|
—
|
39,617
|
87,709
|
129,334
|
—
|
217,043
|
Adjusted
EBITDA
|
|
130,526
|
5,338
|
19,047
|
154,911
|
143,119
|
48,349
|
17,423
|
208,891
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
Margin
|
|
69.2
%
|
64.0
%
|
|
71.7
%
|
75.5
%
|
88.5
%
|
|
79.8
%
|
Adjusted Net Loss
References to "Adjusted Net Loss" are to net earnings or losses
of the Corporation, to which the following elements are added
(subtracted): unrealized portion of the change in fair value of
financial instruments; realized portion of the Phoebe basis hedge,
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 such as the February 2021 Texas Events, the net income tax
expense (recovery) related to these items, and the share of loss
(income) of joint ventures and associates related to the above
items, net of related income tax.
The Adjusted Net Loss seeks to provide a measure that eliminates
the earnings impacts of certain derivative financial instruments
and other items that are outside of the normal course of the
Corporation's cash generating operations, which do not represent
the Corporation's operating performance. Innergex
uses derivative financial instruments to hedge its
exposure to various risks. Accounting for derivatives requires that
all derivatives are marked-to-market. When hedge accounting is not
applied, changes in the fair value of the derivatives is recognized
directly in net earnings (loss). Such unrealized changes have no
immediate cash effect, may or may not reverse by the time the
actual settlements occur and do not reflect the Corporation's
business model toward derivatives, which are held for their
long-term cash flows, over the whole 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 does
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 is used by investors to evaluate and compare
Innergex's profitability before the impacts of unrealized portion
of the change in fair value of derivative financial instruments and
other items that are outside of the normal course of the
Corporation's cash generating operations. Readers are cautioned
that Adjusted Net Loss should not be construed as an alternative to
net earnings, as determined in accordance with IFRS. Please refer
to the "Operating Results" section of the Management's Discussion
and Analysis for the three-month period ended March 31, 2022 for reconciliation of the Adjusted
Net Loss.
Below is a reconciliation of Adjusted Net Loss to its closest
IFRS measure:
|
Three months ended
March 31
|
|
2022
|
2021
|
|
|
|
Net loss
|
(34,930)
|
(217,872)
|
Add
(Subtract):
|
|
|
February
2021 Texas Events:
|
|
|
Revenues
|
—
|
(54,967)
|
Power hedge
|
—
|
70,756
|
Share of loss of Flat Top and Shannon
|
—
|
64,197
|
Share of
impairment of Flat Top and Shannon
|
—
|
112,609
|
Share of
unrealized portion of the change in fair value of financial
instruments of joint ventures and associates, net of related
income tax
|
(660)
|
20,437
|
Unrealized
portion of the change in fair value of financial
instruments
|
40,785
|
16,523
|
Realized
loss on termination of interest rate swaps
|
—
|
2,885
|
Realized
loss on the Phoebe basis hedge
|
—
|
1,199
|
Realized
gain on foreign exchange forward contracts
|
(487)
|
(315)
|
Income tax
recovery related to above items
|
(7,044)
|
(42,992)
|
Adjusted Net
loss
|
(2,336)
|
(27,540)
|
Below is a reconciliation of Adjusted Net Loss adjustments to
each line item of the consolidated statements of earnings:
|
Three months ended
March 31
|
|
2022
|
2021
|
|
IFRS
|
Adj.
|
Non-IFRS
|
IFRS
|
Adj.
|
Non-IFRS
|
|
|
|
|
|
|
|
Revenues
|
188,723
|
—
|
188,723
|
189,651
|
(54,967)
|
134,684
|
Operating
expenses
|
40,038
|
—
|
40,038
|
30,993
|
—
|
30,993
|
General and
administrative expenses
|
14,139
|
—
|
14,139
|
9,750
|
—
|
9,750
|
Prospective projects
expenses
|
4,020
|
—
|
4,020
|
5,789
|
—
|
5,789
|
Adjusted
EBITDA
|
130,526
|
—
|
130,526
|
143,119
|
(54,967)
|
88,152
|
Finance
costs
|
66,401
|
—
|
66,401
|
59,600
|
—
|
59,600
|
Other net
income
|
(20,129)
|
487
|
(19,642)
|
(11,904)
|
315
|
(11,589)
|
Depreciation and
amortization
|
80,231
|
—
|
80,231
|
58,885
|
—
|
58,885
|
Share of (earnings)
losses of joint ventures and associates
|
2,208
|
422
|
2,630
|
207,984
|
(202,600)
|
5,384
|
Change in fair value of
financial instruments
|
40,515
|
(40,785)
|
(270)
|
87,709
|
(91,363)
|
(3,654)
|
Income tax (recovery)
expense
|
(3,770)
|
7,282
|
3,512
|
(41,283)
|
48,349
|
7,066
|
Net (loss)
earnings
|
(34,930)
|
32,594
|
(2,336)
|
(217,872)
|
190,332
|
(27,540)
|
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 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, realized losses or
gains on refinancing of certain borrowings or on derivative
financial instruments used to hedge the interest rate 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.
The Payout Ratio 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. The Payout Ratio level reflects the Corporation's
decision to invest yearly in advancing the development of its
Prospective Projects, for which investments must be expensed as
incurred. The Corporation considers such investments essential to
its long-term growth and success, as it believes that the
greenfield development of renewable energy projects offers the
greatest potential internal rates of return and represents the most
efficient use of management's expertise and value-added skills.
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.
References to "Adjusted Free Cash Flow" are to Free Cash Flow
excluding prospective project expenses. Adjusted Free Cash Flow is
used by investors to evaluate the Corporation's cash generation
capabilities and its ability to sustain current dividends, before
the impacts of the Corporation's decision to invest yearly in its
growth through investing in the development of its Prospective
Projects.
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 "Adjusted Payout Ratio" are to dividends declared
on common shares divided by Adjusted Free Cash Flow. Adjusted
Payout Ratio is used by investors to evaluate the Corporation's
ability to sustain current dividends, before the impacts of the
Corporation's decision to invest yearly in its growth through
investing in the development of its Prospective Projects.
Free Cash Flow and
Payout Ratio calculation
|
Trailing twelve months
ended March 31
|
2022
|
2021
|
February 2021
Texas Events
(9 days)3
|
2021
Normalized3
|
|
|
|
|
|
Cash flows from
operating activities4
|
290,386
|
276,045
|
(16,801)
|
259,244
|
Add (Subtract) the
following items:
|
|
|
|
|
Changes in
non-cash operating working capital items
|
47,411
|
(34,821)
|
33,894
|
(927)
|
Maintenance capital expenditures, net of proceeds from
disposals
|
(7,719)
|
(3,531)
|
—
|
(3,531)
|
Scheduled
debt principal payments
|
(163,323)
|
(151,609)
|
—
|
(151,609)
|
Free Cash
Flow attributed to non-controlling interests1
|
(34,297)
|
(15,701)
|
—
|
(15,701)
|
Dividends
declared on Preferred shares
|
(5,632)
|
(5,865)
|
—
|
(5,865)
|
Add (subtract) the
following non-recurring elements2:
|
|
|
|
|
Realized
loss on contingent considerations
|
—
|
3,568
|
—
|
3,568
|
Realized
(gain) loss on termination of interest rate swaps
|
(377)
|
2,885
|
—
|
2,885
|
Transaction
costs related to realized acquisitions
|
6,744
|
1,664
|
—
|
1,664
|
Realized (gain)
loss on the Phoebe basis hedge
|
(3,745)
|
1,127
|
(1,304)
|
(177)
|
Free Cash
Flow3
|
129,448
|
73,762
|
15,789
|
89,551
|
|
|
|
|
|
Dividends declared on
common shares
|
137,517
|
125,649
|
—
|
125,649
|
Payout
Ratio3
|
106 %
|
170 %
|
(30)
%
|
140 %
|
|
|
|
|
|
Adjust for the
following items:
|
|
|
|
|
Prospective projects expenses
|
25,598
|
|
|
18,858
|
Adjusted Free Cash
Flow
|
155,046
|
|
|
108,409
|
|
|
|
|
|
Adjusted Payout
Ratio
|
89 %
|
|
|
116 %
|
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.
|
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.
|
3.
|
For the trailing twelve
months ended March 31, 2021, the Free Cash Flow and Payout Ratio
are normalized to exclude the impacts of the February 2021 Texas
Events. Normalized measures are not recognized measures under IFRS
and therefore may not be comparable to those presented by other
issuers. Please refer to the "February 2021 Texas Events" section
of the Management's Discussion and Analysis for the three-month
period ended March 31, 2022 for more information.
|
4.
|
Cash flows from
operating activities for the trailing twelve months ended March 31,
2022 include the one-time BC Hydro Curtailment Payment received
during the first quarter of 2022.
|
ADDITIONAL INFORMATION
Innergex's 2022 first 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
Tuesday, May 10, 2022 at 5:30 PM (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/3rnpH1c 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.
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 80
operating facilities with an aggregate net installed capacity of
3,152 MW (gross 3,852 MW) and an energy storage capacity of
150 MWh, including 40 hydroelectric facilities, 32 wind farms and
8 solar farms. Innergex also holds interests in 14 projects
under development, 3 of which are under construction, with a net
installed capacity of 733 MW (gross 770 MW) and an energy storage
capacity of 754 MWh, as well as prospective projects at different
stages of development with an aggregate gross installed capacity
totaling 6,679 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 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, targeted Revenues
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. Please refer to Section 5 - Outlook of the 2021
Annual Report for details regarding the assumptions used with
respect to the 2022 growth targets and outlook for the 2020-2025
Strategic Plan.
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-month periods ended March 31, 2022.
SOURCE Innergex Renewable Energy Inc.