Strategy Execution
Increased portfolio diversification and added complementary storage capabilities via a 60 MW solar portfolio acquisition in Ontario and the deployment of Innergex’s first battery energy storage project in Chile
Advanced on the construction of the 330 MW Boswell Springs wind project in Wyoming
Demonstrated ability to grow in core markets by signing a long-term PPA with Hydro-Québec for a 102 MW wind project, and subsequent to the quarter end, being selected by Hydro-Québec for 400 MW of wind capacity
Started delivering power at the 7.5 MW Innavik hydro project in the north of Quebec, adding a key hydroelectric asset to the portfolio
Funding Initiatives
Executed partnership with Crédit Agricole Assurances for a 30% non-controlling interest in the portfolio in France. This transaction allowed to crystallize value for shareholders and was a validation of the Corporation’s growth strategy, bringing in a long-term strategic partner to accelerate development in France and increase financial flexibility
Closed on the financing of the 330 MW Boswell Springs wind project, allowing Innergex to continue executing on its organic growth strategy
Concluded the financing of three unlevered hydro assets, which represents a new attractive internal funding lever to support growth
Capital Allocation Strategy Update
Announced updated capital allocation strategy to accelerate organic growth (see press release issued on February 21, 2024)
Q4 2023 Financial Results (compared to prior year results)
Production Proportionate was at 94% of LTA, up from 82%
Adjusted EBITDA Proportionate1 reached $186.4 million, up 30%
Fiscal year 2023 Financial Results (compared to prior year results)
Production Proportionate was at 90% of LTA, flat compared to the prior year
Adjusted EBITDA Proportionate1 reached $735.3 million, up 12%
2025 Targets and 2024 Financial Guidance
As a result of recent macroeconomic trends, Innergex is withdrawing its previously provided 2025 financial targets
Full year 2024 Adjusted EBITDA Proportionate1 is expected to be in the range of $725.0 million to $775.0 million
Full year 2024 Free Cash Flow per share1 is expected to be in the range of $0.70 to $0.85
Appointment to the Board of Directors
Marc-André Aubé joined the Board as of December 1, 2023
All amounts are in thousands of Canadian dollars, unless otherwise indicated.
LONGUEUIL, QC, Feb. 21, 2024 /CNW/ – Innergex Renewable Energy Inc. (TSX: INE) (“Innergex” or the “Corporation”) a leading global independent renewable power producer, today reported financial results for the fourth quarter and fiscal year ended December 31, 2023.
Michel Letellier, President and Chief Executive Officer, said, “We are very pleased to deliver better results for the fourth quarter and fiscal year 2023, while also progressing on our strategic growth initiatives. During the fourth quarter, we commissioned our 50 MW/250 MWh (5 hours) Salvador battery energy storage facility in Chile and started delivering energy at the Innavik hydro facility, providing further portfolio diversification, and allowing us to generate attractive risk-adjusted returns on invested capital.”
“We took proactive steps to strengthen our financial position and ensure that we have the necessary financial flexibility required to execute our growth strategy. With the financing for the Boswell Springs project, our partnership with Crédit Agricole Assurances in France, and our financing of three unlevered hydro assets, we are well positioned to continue to invest in greenfield development across our key markets. While making progress with our construction projects, we continue to win new project awards, which serve to validate our value proposition and ultimately support our growth trajectory.”
FINANCIAL HIGHLIGHTS
Three months ended
December 31
Year ended
December 31
2023
2022
2023
2022
Production (MWh)
2,703,285
2,357,039
10,621,478
10,254,005
Production as a percentage of LTA
94 %
81 %
90 %
90 %
Revenues and Production Tax Credits
261,526
220,212
1,041,574
935,223
Operating Income
(36,494)
(6,504)
219,575
263,366
Adjusted EBITDA1
175,421
135,376
687,743
612,165
Net Loss
(121,964)
(52,575)
(105,814)
(91,115)
Adjusted Net Loss1
(7,166)
(27,469)
(2,052)
(32,503)
Net Loss Attributable to Owners, $ per share – basic and diluted
(0.57)
(0.23)
(0.51)
(0.43)
Production Proportionate (MWh)1
2,808,877
2,448,629
11,160,580
10,792,064
Revenues and Production Tax Credits Proportionate1
276,225
231,576
1,102,655
995,758
Adjusted EBITDA Proportionate1
186,447
143,399
735,261
658,883
Year ended December 31
2023
2022
Cash Flow from Operating Activities
297,853
430,243
Free Cash Flow1,2
214,930
171,988
Payout Ratio1,2
68 %
85 %
Normalized Payout Ratio1
69% – 75%
Note: On January 1, 2023, the Corporation amended the presentation of its consolidated statements of earnings (refer to Section 8- ACCOUNTING POLICIES AND INTERNAL CONTROLS | Material Accounting Policies of the Management’s Discussion and Analysis for the three- and twelve- months ended December 31, 2023 (“MD&A”) for more information). Concurrently, certain Non-IFRS measures have been amended (refer to Section 6- NON-IFRS MEASURES of the MD&A for more information).
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 6- NON-IFRS MEASURES for more information.
2.
For more information on the calculation and explanation, please refer to 4- CAPITAL AND LIQUIDITY | Free Cash Flow and Payout Ratio of the MD&A.
OPERATING PERFORMANCE
FOURTH QUARTER 2023
Production for the quarter was marked by higher levels reached by the hydro facilities, partially offset by below average wind and solar resources. The increase in Revenues and Production Tax Credits compared to the same period last year was mainly due to higher production in the hydro segment in British Columbia, at the Curtis Palmer facilities in the United States and in the wind segment in France, as well as the acquisition of the Sault Ste. Marie solar facilities. Adjusted EBITDA Proportionate1 was favourably impacted by the same factors noted above, partially offset by higher operating, general and administrative expenses, as well as higher prospective projects expenses.
FISCAL YEAR 2023
Overall production for the year ended on December 31, 2023, reached 90% of LTA, flat compared to prior year, as higher hydro production was offset by below average wind and solar generation. The increase is mainly explained by the Aela and Sault Ste. Marie acquisitions, the higher production at the Curtis Palmer hydro facilities in the United States and increased wind regime and revenues from new PPAs in place at facilities in France. The increase is partly offset by lower wind regimes at the Quebec facilities, lower spot prices at the Chilean hydro facilities and unfavourable pricing and lower production at the Griffin Trail wind facility. Adjusted EBITDA Proportionate1 was favourably impacted by the same factors noted above, partially offset by higher operating, general and administrative expenses, as well as higher prospective projects expenses.
TRAILING TWELVE MONTHS CASH FLOW FROM OPERATING ACTIVITIES, FREE CASH FLOW1 AND PAYOUT RATIO1
Cash flows from operating activities decreased to $297.9 million, compared with $430.2 million in the prior year period. Main contributors were 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 foreign exchange forward contracts concurrent with the French Acquisition.
Free Cash Flow1 Increased to $214.9 million, compared with $172.0 million for the corresponding period last year. The increase is mainly due to the gain realized with the sale of a 30% non-controlling interest in Innergex’s portfolio in France. The gain crystallizes value to Innergex’s shareholders, mainly derived from the development portfolio, and from certain operational improvements, showcasing the ability of the development and operational teams to create tangible value.
The dividends on common shares declared by the Corporation amounted to 68% of Free Cash Flow1, compared with 85% for the corresponding period last year.
Had production levels been equal to their long-term average during the year ended December 31, 2023, excluding Chile and the gain realized in the French portfolio, Free Cash Flow1 and Payout Ratio1 would have been in a range of $197 million to $212 million and 69% to 75%, respectively.
PROJECTS UNDER CONSTRUCTION
Name
(Location)
Type
Ownership
(%)
Gross
installed
capacity
(MW)
Gross
estimated
LTA (GWh)
PPA term
(years)
Expected
COD
San Andrés Battery Energy Storage (Chile)
Storage
100
Note
3
—
—
2024
Lazenay (France)
Wind
25
9.0
27.8
—
2024
Hale Kuawehi (Hawaii, U.S.)
Solar and storage
100
30.0
1
87.4
2
25
2024
Boswell Springs (Wyoming, U.S.)
Wind
100
329.8
1,262.0
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).
Innergex continues to advance its projects under construction. The San Andrés battery energy storage project will represent its second investment in storage technology in Chile, further supporting …
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