Innergex reports first quarter 2016 results
News Release
For Immediate Distribution
INNERGEX REPORTS FIRST QUARTER 2016 RESULTS
ACQUISITIONS IN BRITISH COLUMBIA AND IN FRANCE
- Production was 119% of long-term average (“LTA”)
- Revenues increased 8% to $62.5 million compared with the same period last year
- Adjusted EBITDA rose 11% to $47.7 million compared with the same period last year
- Innergex and the Cayoose Creek Indian Band have completed the acquisition of the 16 MW Walden North hydroelectric facility (the “Walden Facility”) in British Columbia
- The Corporation signed the final agreements to purchase a portfolio of eight wind power projects located in France, of a total installed capacity of 131 MW
- Innergex has received approval from TSX to renew the normal course issuer bid on its common shares and to commence one on its preferred shares
LONGUEUIL, Quebec, May 10, 2016 – Innergex Renewable Energy Inc. (TSX: INE) (“Innergex” or the “Corporation”) today released its operating and financial results for the three-month period ended March 31, 2016.
“We had a great and busy quarter in which we completed the Walden acquisition in BC and announced the penetration of a new market with the acquisition of seven operating facilities in France” declared Michel Letellier, President and Chief Executive Officer of the Corporation. “Our operating results reflects the contribution of the Tretheway Creek hydroelectric facility, which began commercial operation at the end of last year. We continue to focus on advancing our four projects currently under construction and to investigate other opportunities in Canada and abroad”, Mr. Letellier added.
OPERATING RESULTS
Amounts shown are in thousands of Canadian
dollars except as noted otherwise. Three months ended March 31
| 2016 | 2015 | ||||
| Power generated (MWh) | 664,387 | 658,427 | |||
| Long-term average (MWh) | 557,022 | 542,769 | |||
| Revenues | 62,481 | 57,727 | |||
| Adjusted EBITDA1 | 47,681 | 42,955 | |||
| Net earnings (loss) | 7,197 | (37,810) | |||
| Net earnings (loss), $ per share – basic and diluted | 0.07 | (0.31) | |||
| Trailing 12 months ended March 31 | |||||
| 2016 | 2015 | ||||
| Free Cash Flow1 | 77,217 | 82,212 | |||
| Payout Ratio1 | 84% | 74% | |||
1 Please refer to the “Non-IFRS measures disclaimer” for the definition of Adjusted EBITDA, Free Cash Flow and Payout Ratio.
Electricity Production
During the three-month period ended March 31, 2016, the Corporation’s facilities produced 664 GWh of electricity or 119% of the LTA of 557 GWh. Overall, the hydroelectric facilities produced 133% of their LTA, due mainly to above-average water flows in all markets but Ontario. Overall, the wind farms produced 98% of their LTA, due to below-average wind regimes. The Stardale solar farm produced 108% of its LTA, due to above-average solar regimes. The production increase of 1% over the same period last year, is attributable to production that was above the long-term average of the hydroelectric facilities in Quebec during the quarter and to the contribution of the BC Tretheway Creek hydroelectric facility, which began commercial operation in November 2015, partly offset by lower production at some of the Corporation’s other British Columbia facilities.
Revenues
For the three-month period ended March 31, 2016, the Corporation recorded revenues of $62.5 million, compared with $57.7 million in 2015. This 8% increase is attributable mainly to better results from the Quebec hydro facilities, compared to the same period last year, and to the contribution of the Tretheway Creek hydroelectric facility commissioned at the end of 2015, which was partly offset by lower production at some of the other British Columbia facilities. The higher rate of increase for revenues than for production (8% and 1% respectively) is explained by the fact that the production increase occurred at facilities that have more lucrative PPAs.
Adjusted EBITDA
For the three -month period ended March 31, 2016, the Corporation recorded Adjusted EBITDA of $47.7 million, compared with $43.0 million for the same period last year. This 11% increase is mainly due to the increase in production and revenues explained above and to the reduction in general and administrative expenses, partly offset by an increase of prospective project expenses. As a result, the Adjusted EBITDA Margin rose from 74.4% to 76.3%.
Net Earnings (Loss)
Excluding the unrealized net gain on derivative financial instruments (“Derivatives”), the realized loss on Derivatives and the related income taxes, the net earnings for the period ended March 31, 2016 would have been $6.8 million, compared with net earnings of $6.2 million in 2015.
For the three-month period ended March 31, 2016, the Corporation recorded net earnings of $7.2 million (basic and diluted net earnings of $0.07 per share), compared with a net loss of $37.8 million (basic and diluted net loss of $0.31 per share) in 2015. The $37.8 million net loss in 2015 was due mainly to the financial impact of the Derivatives. In the present quarter, no realized gain or loss was recorded by the Corporation on its Derivatives while an unrealized net loss of $ 1.3 million was recorded, compared with a $68.0 million realized loss on Derivatives partly offset by a $12.0 million unrealized net gain on Derivatives in March 2015.
Free Cash Flow and Payout Ratio
For the twelve-month period ended March 31, 2016, the Corporation generated Free Cash Flow of $77.2 million, compared with $82.2 million for the same period last year. This decrease is due mainly to lower cash flows from operating activities before changes in non-cash operating working capital items and realized losses on derivative financial instruments. The Free Cash Flow was further reduced by greater scheduled debt principal payments, which were partly offset by lower cash flows attributed to the minority interest.
The Payout Ratio represents the dividends declared on common shares divided by Free Cash Flow. The Corporation believes the Payout Ratio is a measure of its ability to sustain current dividends and dividend increases as well as its ability to fund its growth. For the trailing twelve -month period ending on ended March 31, 2016, the dividends on common shares declared by the Corporation corresponded to 84% of Free Cash Flow, compared with 74% for the corresponding prior twelve-month period. This negative change is due mainly to the decrease in Free Cash Flow explained above and to the higher number of common shares outstanding by virtue of the conversion, at the holders’ request, of a portion of the 5.75% convertible debentures into common shares and by virtue of the DRIP, partly offset by the purchase and cancellation of 1,190,173 shares under the Corporation’s normal course issuer bid.
BUSINESS ACQUISITIONS
Completion of the Acquisition of the Walden Facility
On February 25, 2016, the Corporation, in partnership with the Cayoose Creek Indian Band, completed the previously announced acquisition from FortisBC of the Walden Facility located in the province of British Columbia, Canada. The Walden Facility is a 16 MW facility commissioned in 1992 and located on private land in Cayoosh Creek near Lillooet, close to several of the Corporation’s other hydroelectric facilities.
Innergex and Cayoose Creek Development Corporation, the economic arm of the Cayoose Creek Indian Band, have formed the Cayoose Creek Limited Partnership, which in turn has acquired the assets that make up the facility. The transaction closed at a total purchase price of $9.2 million.
Acquisition of eight Wind Power Projects in France and a Private Placement of $50.0 million
On March 21, 2016, Innergex announced the potential acquisition of seven operating wind power projects with an installed capacity of 87 MW and another project currently under construction with an installed capacity of 44 MW from a German company, wpd europe GmbH, for a total of 131 MW.
