Innergex reports third quarter 2024 results

Press Release

LONGUEUIL, Quebec, November 6, 2024 – Innergex Renewable Energy Inc. (TSX: INE) (“Innergex” or the “Corporation”) a leading global independent renewable power producer, today reported financial results for the third quarter ended September 30, 2024.

“This quarter, we continued executing on our disciplined growth strategy. We have bid projects in the British Columbia call for power, advanced two battery energy storage projects to the development phase and completed the acquisition of a small hydro facility in Chile. We also renewed the PPA for the three Portneuf facilities subsequent to the end of the quarter,” said Michel Letellier, President and Chief Executive Officer.

“Climate conditions remain a challenge during the quarter. While the water resource was more abundant in British Columbia after drier conditions in the past two years, other regions faced below average resources impacting our electricity production in Q3 2024. It is discouraging to learn that greenhouse gas emissions reached a global record in 2023. At Innergex, we are aware of fluctuating global temperature variations, and these issues boost our motivation to pursue our mission to develop renewable energy facilities that can help limit global warming of our planet,” added Mr. Letellier.

FINANCIAL HIGHLIGHTS

	Three months ended		Nine months ended
	September 30		September 30
	2024	2023	2024		2023
Production (MWh)	2,595,984	2,654,439	8,095,663	7,918,191
Production as a percentage of LTA	87 %	88 %	91 %	88 %
Revenues and Production Tax Credits	258,612	292,179	761,119	780,048
Operating Income	71,645	99,778	210,513	256,069
Adjusted EBITDA1	170,971	180,233	508,617	512,322
Net Earnings (Loss)	7,898	4,381	(6,748)	16,150
Adjusted Net Earnings (Loss)1	11,263	5,198	(12,837)	5,113
Net Earnings (Loss) Attributable to Owners, $ per	0.03	0.04	(0.09)	0.06
share – basic and diluted
Production Proportionate (MWh)1	2,831,421	2,867,819	8,529,387	8,351,684
Revenues and Production Tax Credits Proportionate1	287,632	316,848	814,556	826,430
Adjusted EBITDA Proportionate1	195,981	201,177	550,557	548,814
			Trailing twelve months ended
			September 30
			2024		2023
Cash Flow from Operating Activities				311,114
			262,962
Free Cash Flow1,2				121,200
			260,911
Free Cash Flow per Share1,2			1.29	0.60

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 September 30			Three months ended September 30
		2024	2023	Change	2024	2023	Change
Revenues and Production Tax
		258,612	292,179	(11)%	287,632	316,848	(9)%
Credits
Adjusted EBITDA
Hydro		78,860	80,129	(2)%	101,423	99,280	2%
Wind		84,593	87,232	(3)%	87,040	89,025	(2)%
Solar		32,706	35,157	(7)%	32,706	35,157	(7)%
Other corporate expenses2		(25,188)	(22,285)	(13)%	(25,188)	(22,285)	(13)%
Adjusted EBITDA1		170,971	180,233	(5)%	195,981	201,177	(3)%

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
		Nine months ended September 30				Nine months ended September 30
		2024	2023	Change	2024		2023	Change
Revenues and Production Tax
		761,119	780,048	(2)%		814,556	826,430	(1)%
Credits
Adjusted EBITDA
Hydro		213,826	209,001	2%		248,430	237,980	4%
Wind		287,803	286,804	—%		295,139	294,317	—%
Solar		80,616	83,145	(3)%		80,616	83,145	—%
Other corporate expenses2		(73,628)	(66,628)	(11)%		(73,628)	(66,628)	(11)%
Adjusted EBITDA1		508,617	512,322	(1)%	550,557		548,814	—%

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

THIRD QUARTER 2024

The decrease in Revenues and Production Tax Credits compared to the same period last year is mainly explained by the lower prices at the Phoebe facility, lower production at the hydro facilities in Quebec, in Chile and at Curtis Palmer, and lower prices at the Griffin Trail and Foard City facilities in the United States. The decrease is partly compensated by higher production at hydro facilities in British Columbia, higher prices at the wind and hydro facilities in Chile and by the commissioning of the Salvador and San Andrés battery storage facilities in October 2023 and in May 2024, respectively.

Adjusted EBITDA Proportionate1 was impacted by the same factors noted above and by higher prospective project expenses, partly offset by lower operating expenses.

NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2024

The decrease in Revenues and Production Tax Credits compared to the same period last year was mainly due to lower prices and lower production at the solar facilities in the United States, lower prices at the Foard City and Griffin Trail wind facilities in the United States and lower production at the Curtis Palmer and Quebec hydro facilities. These items were partly offset by higher production at the hydro facilities in British Columbia, higher prices at the wind facilities in Chile, the addition of the two battery energy storage facilities in Chile and higher production at the solar facilities in Ontario and at the wind facilities in Quebec.

Adjusted EBITDA Proportionate1 was impacted by the same factors noted above and by higher prospective project expenses.

CASH FLOW FROM OPERATING ACTIVITIES, FREE CASH FLOW1 AND FREE CASH FLOW PER SHARE1

For the three months ended September 30, 2024, cash flows from operating activities totalled $109.5 million, compared with cash flows from operating activities of $103.0 million in the same period last year. The increase is mainly due to the realized gain on the monetization of certain interest rate swaps in the third quarter of 2024, partly offset by the operating performance previously discussed and the increase in finance costs paid relative to the timing of interest payments.

For the nine months ended September 30, 2024, cash flows from operating activities totalled $182.6 million, compared with $217.5 million in the same period last year. The decrease is mainly due to the realized loss on the settlement of the Phoebe power hedge, partly offset by the realized gain on the settlement of the interest rate swaps upon the repayment of the Foard City and Phoebe project debts, concurrent with the Texas Portfolio Transaction. Excluding this transaction, cash flows from operating activities for the nine months ended September 30, 2024 totalled $263.8 million. The increase from the comparative period mainly stems from the realized gain on the monetization of certain interest rate swaps in the third quarter of 2024, partly offset by the operating performance previously discussed.

Free Cash Flow1 for the trailing twelve months ended September 30, 2024 increased to $260.9 million, compared with $121.2 million for the corresponding period last year. The increase is mainly due to gains realized on strategic transactions in the French and the Texas portfolios during Q4 2023 and Q2 2024, respectively; the higher production at the hydro facilities in British Columbia; and the contribution to cash flows from operating activities from the commissioning of the Salvador and San Andrés battery energy storage facilities, along with the Sault Ste. Marie Acquisition. These items were partly offset by a decrease in cash flows from operating activities attributable to lower spot prices; an increase in Free Cash Flow1 attributed to non-controlling interests mainly attributable to the performance of the Harrison Hydro facilities, along with the contributions from the French and the Texas portfolios; and an increase in scheduled debt principal payments mainly stemming from the French and the Sault Ste. Marie facilities, partly offset by the repayment of the Foard City and Phoebe project debts in connection with the Texas Portfolio Transaction.

Free Cash Flow1 per share for the trailing twelve months ended September 30, 2024 increased to $1.29 from $0.60 for the corresponding period last year.

For the trailing twelve months ended September 30, 2024, the dividends on common shares declared by the Corporation amounted to 35% of Free Cash Flow1, compared with 121% for the corresponding period last year, after Innergex updated capital allocation strategy prioritizing the funding of our growth ambitions.

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