INNERGEX REPORTS SECOND QUARTER 2024 RESULTS
Strategic Execution
- Executed on a minority sale of interests in a 826 MW renewable energy portfolio in
Texas - Achieved commissioning of the 35 MW/175 MWh (5 hours) San Andrés battery energy storage facility in
Chile - Signed a 30-year PPA with Hydro-
Québec for the 100 MW Lotbinière Ndakina and the 300 MW Peshu Napeu wind projects - Renewed a 25-year PPA for the three
Portneuf facilities inQuebec subsequent to quarter end - Reaffirming full year 2024 financial guidance
Q2 2024 Financial Results
- Adjusted EBITDA Proportionate1 reached
$183.9 million , down 8% compared to Q2 2023 - Free Cash Flow per Share1 at
$1.35 for the trailing twelve-months endedJune 30, 2024 - Payout Ratio1 of 40% for the trailing twelve-months ended
June 30, 2024
All amounts are in thousands of Canadian dollars, unless otherwise indicated. |
"While the hottest temperatures ever recorded on earth continue to break records for a thirteenth month in a row and unusual climate events continue to impact populations across the globe, we strongly believe that our industry, and above all our mission, remain the single greatest tool to mitigate the effects of human-made climate change. With the Paris Agreement objectives in mind and the need for clean electricity increasing, our industry is poised to grow and
"Our teams remain focused on executing on our disciplined growth strategy, through both securing accretive greenfield opportunities such as the 300 MW Peshu Napeu and the 100 MW Lotbinière Ndakina wind projects in
FINANCIAL HIGHLIGHTS
|
Three months ended |
Six months ended |
||
2024 |
2023 |
2024 |
2023 |
|
Production (MWh) |
2,971,065 |
2,951,098 |
5,494,045 |
5,263,754 |
Production as a percentage of LTA |
91 % |
90 % |
93 % |
89 % |
|
|
|
|
|
Revenues and Production Tax Credits |
259,972 |
269,541 |
502,507 |
487,869 |
Operating Income |
75,849 |
93,322 |
138,868 |
156,291 |
Adjusted EBITDA1 |
172,912 |
186,989 |
337,646 |
332,089 |
Net Earnings (Loss) |
23,013 |
24,805 |
(14,646) |
11,769 |
Adjusted Net (Loss) Earnings1 |
(3,867) |
11,260 |
(24,100) |
(85) |
Net Loss Attributable to Owners, $ per share - basic and diluted |
0.09 |
0.10 |
(0.12) |
0.02 |
Production Proportionate (MWh)1 |
3,105,950 |
3,123,901 |
5,692,320 |
5,483,869 |
Revenues and Production Tax Credits Proportionate1 |
274,924 |
285,127 |
526,924 |
509,582 |
Adjusted EBITDA Proportionate1 |
183,891 |
199,194 |
354,576 |
347,637 |
|
|
|
|
|
|
|
Trailing twelve months ended |
||
|
|
|
2024 |
2023 |
Cash Flow from Operating Activities |
|
|
256,475 |
392,250 |
Free Cash Flow1,2 |
|
|
275,059 |
115,342 |
1. |
These measures are not recognized measures under IFRS and therefore may not be comparable to those presented by other issuers. Production and Production Proportionate are key performance indicators for the Corporation that cannot be reconciled with an IFRS measure. Please refer to the NON-IFRS MEASURES section for more information. |
2. |
For more information on the calculation and explanation, please refer to the 4- CAPITAL AND LIQUIDITY | Free Cash Flow and Payout Ratio section of the MD&A. |
FINANCIAL HIGHLIGHTS PER SEGMENT
|
|
Consolidated |
Proportionate1 |
||||
|
|
Three months ended |
Three months ended |
||||
|
|
2024 |
2023 |
Change |
2024 |
2023 |
Change |
|
|
|
|
|
|
|
|
Revenues and Production Tax Credits |
|
259,972 |
269,541 |
(4) % |
274,924 |
285,127 |
(4) % |
Adjusted EBITDA |
|
|
|
|
|
|
|
Hydro |
|
81,932 |
88,136 |
(7) % |
91,126 |
98,219 |
(7) % |
Wind |
|
85,534 |
86,091 |
(1) % |
87,319 |
88,213 |
(1) % |
Solar |
|
29,671 |
34,104 |
(13) % |
29,671 |
34,104 |
(13) % |
Other corporate expenses2 |
|
(24,225) |
(21,342) |
(14) % |
(24,225) |
(21,342) |
(14) % |
Adjusted EBITDA1 |
|
172,912 |
186,989 |
(8) % |
183,891 |
199,194 |
(8) % |
1. |
These measures are not recognized measures under IFRS and therefore may not be comparable to those presented by other issuers. Revenues and Production Tax Credits Proportionate, Adjusted EBITDA and Adjusted EBITDA Proportionate are key performance indicators for the Corporation that cannot be reconciled with an IFRS measure. Please refer to the NON-IFRS MEASURES section for more information. |
2. |
Other corporate expenses include corporate general and administrative expenses and prospective project expenses. |
|
|
Consolidated |
Proportionate1 |
||||
|
|
Six months ended |
Six months ended |
||||
|
|
2024 |
2023 |
Change |
2024 |
2023 |
Change |
|
|
|
|
|
|
|
|
Revenues and Production Tax Credits |
|
502,507 |
487,869 |
3 % |
526,924 |
509,582 |
3 % |
Adjusted EBITDA |
|
|
|
|
|
|
|
Hydro |
|
134,966 |
128,872 |
5 % |
147,007 |
138,700 |
6 % |
Wind |
|
203,210 |
199,572 |
2 % |
208,099 |
205,292 |
1 % |
Solar |
|
47,910 |
47,988 |
— % |
47,910 |
47,988 |
— % |
Other corporate expenses2 |
|
(48,440) |
(44,343) |
(9) % |
(48,440) |
(44,343) |
(9) % |
Adjusted EBITDA1 |
|
337,646 |
332,089 |
2 % |
354,576 |
347,637 |
2 % |
1. |
These measures are not recognized measures under IFRS and therefore may not be comparable to those presented by other issuers. Revenues and Production Tax Credits Proportionate, Adjusted EBITDA and Adjusted EBITDA Proportionate are key performance indicators for the Corporation that cannot be reconciled with an IFRS measure. Please refer to the NON-IFRS MEASURES section for more information. |
2. |
Other corporate expenses include corporate general and administrative expenses and prospective project expenses. |
OPERATING PERFORMANCE
SECOND QUARTER 2024
Production in the quarter is primarily explained by below average wind regimes in most regions, lower water flows in
SIX-MONTH PERIOD ENDED
Production for the six-month period ended
CASH FLOW FROM OPERATING ACTIVITIES, FREE CASH FLOW1 AND FREE CASH FLOW PER SHARE1
For the three months ended
For the six months ended
Free Cash Flow1 for the trailing twelve months ended
Free Cash Flow1 per share for the trailing twelve months ended
For the trailing twelve months ended
PROJECTS UNDER CONSTRUCTION
(Location) |
Type |
Ownership |
Gross installed |
Gross estimated |
PPA term |
Expected |
|
||||
|
|||||||||||
|
|||||||||||
Hale Kuawehi ( |
Solar |
100 |
|
30.0 |
|
87.4 |
|
25 |
3.0 |
2024 |
|
Storage |
|
30.0 |
2 |
|
|
||||||
|
Wind |
100 |
|
329.8 |
|
1,262.0 |
|
30 |
|
2024 |
|
Total Gross Installed Capacity in Construction Activities (MW) |
|
|
|
389.8 |
|
|
|
|
|
|
|
1. |
This information is intended to inform readers of the projects' potential impact on the Corporation's results. Actual results may vary. These estimates are up-to-date as at the date of this press release. |
|
2. |
Battery storage capacity of 30 MW/120 MWh (4 hours). |
|
3. |
PPA is a fixed lump sum capacity payment for the availability of dispatchable energy. |
EXECUTING ON GROWTH STRATEGY AND FINANCIAL PRIORITIES
On
The Corporation continues to participate in Canadian power calls, including in
The Corporation has a large-scale diversified ~10 GW prospective project portfolio supporting development and upcoming bid activities.
REAFFIRMING 2024 FINANCIAL GUIDANCE
Full year 2024 Adjusted EBITDA Proportionate1 and Free Cash Flow1 per share are expected to be in the range of
"Our first six months results were below expectations due to limited hydro, wind and solar resources in several regions. However, our ability to maintain high asset availability, to remain efficient in our operations and to pursue our disciplined approach towards capital management support reaffirming our financial guidance for 2024," said
SUBSEQUENT EVENTS
On
DIVIDEND DECLARATION
The following dividends will be paid by the Corporation on
Date of announcement |
Record date |
Payment date |
Dividend per common share |
Dividend per Series A Preferred Share |
Dividend per Series C |
|
|
|
|
$0.2028 |
|
1. |
This is not a recognized measure under IFRS and therefore may not be comparable to those presented by other issuers. Please refer to the "Non-IFRS Measures" section for more information. |
2. |
These assumptions are based on information currently available to the Corporation and this list of assumptions is not exhaustive. Please refer to the Section 5 - OUTLOOK | 2024 Growth Targets of the MD&A for the year ended |
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.
Revenues and Production Tax Credits Proportionate, Adjusted EBITDA and Adjusted EBITDA Proportionate
Description of the measures
References in this document to "Revenues and Production Tax Credits Proportionate" are to Revenues and Production Tax Credits, plus
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
Below is a reconciliation of the non-IFRS measures to their closest IFRS measures:
|
|
Three months ended |
Three months ended |
||||
|
|
Consolidation |
Share of joint ventures |
Proportionate |
Consolidation |
Share of joint ventures |
Proportionate |
|
|
|
|
|
|
|
|
Revenues and Production Tax Credits |
|
259,972 |
14,952 |
274,924 |
269,541 |
15,586 |
285,127 |
|
|
|
|
|
|
|
|
Operating income |
|
75,849 |
6,422 |
82,271 |
93,322 |
8,136 |
101,458 |
Depreciation and amortization |
|
95,157 |
4,557 |
99,714 |
93,594 |
4,069 |
97,663 |
ERP implementation |
|
2,595 |
— |
2,595 |
3,349 |
— |
3,349 |
Realized loss on power hedges1 |
|
(689) |
— |
(689) |
(3,276) |
— |
(3,276) |
Adjusted EBITDA |
|
172,912 |
10,979 |
183,891 |
186,989 |
12,205 |
199,194 |
1. |
Represents the realized loss on power hedges excluding the |
|
|
Six months ended |
Six months ended |
||||
|
|
Consolidation |
Share of joint ventures |
Proportionate |
Consolidation |
Share of joint ventures |
Proportionate |
|
|
|
|
|
|
|
|
Revenues and Production Tax Credits |
|
502,507 |
24,417 |
526,924 |
487,869 |
21,713 |
509,582 |
|
|
|
|
|
|
|
|
Operating income |
|
138,868 |
7,869 |
146,737 |
156,291 |
7,362 |
163,653 |
Depreciation and amortization |
|
190,315 |
9,061 |
199,376 |
170,931 |
8,186 |
179,117 |
ERP implementation |
|
5,106 |
— |
5,106 |
5,918 |
— |
5,918 |
Realized gain (loss) on power hedges1 |
|
3,357 |
— |
3,357 |
(1,051) |
— |
(1,051) |
Adjusted EBITDA |
|
337,646 |
16,930 |
354,576 |
332,089 |
15,548 |
347,637 |
1. |
Represents the realized loss on power hedges excluding the |
Adjusted Net (Loss) Earnings
References to "Adjusted Net (Loss) Earnings" are to net earnings or losses of the Corporation, to which the following elements are added (subtracted): unrealized portion of the change in fair value of derivative financial instruments, realized loss on the termination of interest rate swaps, realized gain on foreign exchange forward contracts, realized loss on termination of power hedges, impairment charges, items that are outside of the normal course of the Corporation's cash generating operations, the net income tax expense (recovery) related to these items, and the share of loss (earnings) of joint ventures and associates related to the above items, net of related income tax.
The Adjusted Net (Loss) Earnings seeks to provide a measure that eliminates the earnings impacts of certain derivative financial instruments and other items that are outside of the normal course of the Corporation's cash generating operations, which do not represent the Corporation's operating performance.
Below is a reconciliation of Adjusted Net (Loss) Earnings to its closest IFRS measure:
|
Three months ended |
Six months ended |
||
|
2024 |
2023 |
2024 |
2023 |
|
|
|
|
|
Net earnings (loss) |
23,013 |
24,805 |
(14,646) |
11,769 |
Add (Subtract): |
|
|
|
|
Share of unrealized portion of the change in fair value of financial instruments of joint ventures and associates, net of related income tax |
(149) |
(315) |
(457) |
(439) |
Unrealized portion of the change in fair value of financial instruments |
(106,130) |
(16,812) |
(86,573) |
(16,468) |
Realized loss on termination of power hedges |
74,496 |
— |
74,496 |
— |
Realized gain on termination of interest rate swaps |
(9,299) |
(3,712) |
(9,299) |
(3,712) |
ERP implementation |
2,595 |
3,349 |
5,106 |
5,918 |
Realized gain on foreign exchange forward contracts |
(19) |
(1) |
(47) |
(34) |
Income tax expense related to above items |
11,626 |
3,946 |
7,320 |
2,881 |
Adjusted Net (Loss) Earnings |
(3,867) |
11,260 |
(24,100) |
(85) |
Free Cash Flow, Free Cash Flow per Share and Payout Ratio
Description of the measures
References to "Free Cash Flow" are to cash flows from operating activities before changes in non-cash operating working capital items, less prospective projects expenses, maintenance capital expenditures net of proceeds from dispositions, scheduled debt principal payments, the portion of Free Cash Flow attributed to non-controlling interests, preferred share dividends declared, and gains realized on strategic transactions, plus or minus other elements that are not representative of the Corporation's long-term cash-generating capacity, such as realized gains and losses on contingent considerations related to past business acquisitions, transaction costs related to realized acquisitions, expenses related to the implementation of a cloud-based ERP solution, realized losses or gains on refinancing of certain borrowings or settlement of derivative financial instruments before their contractual maturity, and tax payments related to fiscal strategies for the purpose of improving the long-term cash generating capacity of
References to "Free Cash Flow per Share" are to Free Cash Flow divided by the weighted-average number of common shares outstanding during the period.
Free Cash Flow is a measure of the Corporation's ability to pay a dividend and its ability to fund its growth from its cash generating operations, in the normal course of business, and through strategic transactions. Free Cash Flow per Share is a measure of the Corporation's ability to derive shareholder returns on a per-share basis from its cash generating operations, in the normal course of business, and through strategic transactions.
References to "Payout Ratio" are to dividends declared on common shares divided by Free Cash Flow.
|
Trailing twelve months ended |
|
2024 |
2023 |
|
|
|
|
Cash flows from operating activities |
256,475 |
392,250 |
Add (Subtract) the following items: |
|
|
Changes in non-cash operating working capital items |
32,886 |
4,231 |
Prospective projects expenses |
34,347 |
26,333 |
Maintenance capital expenditures, net of proceeds from dispositions |
(24,540) |
(18,649) |
Scheduled debt principal payments |
(183,171) |
(167,262) |
Free Cash Flow attributed to non-controlling interests1 |
(44,717) |
(28,652) |
Dividends declared on Preferred shares |
(5,632) |
(5,632) |
|
4,704 |
4,830 |
Add (subtract) the following specific items2: |
|
|
Realized (gain) loss on termination of interest rate swaps3 |
(6,894) |
(71,735) |
Realized gain on termination of foreign exchange forwards4 |
— |
(43,458) |
Realized loss on termination of power hedges5 |
74,496 |
— |
Principal and interest paid related to pre-acquisition period |
— |
1,312 |
Acquisition, integration and ERP implementation expenses |
11,940 |
21,774 |
Gains realized on strategic transactions6 |
125,165 |
— |
Free Cash Flow |
275,059 |
115,342 |
Weighted-average number of shares outstanding |
203,377,123 |
203,538,847 |
Free Cash Flow per Share |
1.35 |
0.57 |
|
|
|
Dividends declared on common shares |
110,201 |
146,993 |
Payout Ratio |
40 % |
127 % |
|
|
|
1. |
The portion of Free Cash Flow attributed to non-controlling interests is subtracted, regardless of whether an actual distribution to non-controlling interests is made, in order to reflect the fact that such distributions may not occur in the period they are generated. |
2. |
Certain items are excluded from the Free Cash Flow and Payout Ratio calculations as they are deemed not representative of the Corporation's long-term cash-generating capacity, and include items such as realized gains and losses on contingent considerations related to past business acquisitions, transaction costs related to realized acquisitions, ERP implementation expenses, realized losses or gains on refinancing of certain borrowings or settlement of derivative financial instruments before their contractual maturity, and tax payments related to fiscal strategies for the purpose of improving the long-term cash generating capacity of |
3. |
The Free Cash Flow for the trailing twelve months ended |
4. |
The Free Cash Flow for the trailing twelve months ended |
5. |
The Free Cash Flow for the trailing twelve months ended |
6. |
The Free Cash Flow for the trailing twelve months ended |
ADDITIONAL INFORMATION
CONFERENCE CALL AND WEBCAST
The Corporation will hold a conference call and webcast on
About
For over 30 years,
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
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
Forward-Looking Information is based on certain key assumptions made by the Corporation, including, without restriction, those concerning hydrology, wind regimes and solar irradiation; performance of operating facilities, acquisitions and commissioned projects; availability of capital resources and timely performance by third parties of contractual obligations; favourable economic and financial market conditions; average merchant spot prices consistent with external price curves and internal forecasts; no material changes in the assumed
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
SOURCE