SEVEN ACQUISITIONS COMPLETED, 14 NEW OPERATING
FACILITIES ADDED DIVIDEND INCREASED BY 3% - NEW BOARD MEMBER
APPOINTED
- Seventh acquisition of the year completed in October 2018 by acquiring the remaining interest
in the Cartier Wind Farms and Operating Entities.
- Revenues up 44% to $576.6 million
in 2018 compared with last year.
- Adjusted EBITDA rose 29% to $385.1
million in 2018 compared with last year.
- Adjusted EBITDA Proportionate rose 49% to $459.1 million in 2018 compared with last
year.
- Board of Directors declares a sixth consecutive annual dividend
increase of $0.02 to $0.70 per common share.
- Ouma Sananikone appointed to the
Board of Directors.
All amounts are in
Canadian dollars, except as noted.
|
LONGUEUIL, QC, Feb. 27,
2019 /CNW Telbec/ - Innergex Renewable Energy Inc. (TSX: INE)
("Innergex" or the "Corporation") today released its operating and
financial results for the fourth quarter and year ended
December 31, 2018. The improved performance stems mainly from
the contribution of the acquisitions achieved in 2018, from the
facilities commissioned in 2017 and from higher production.
"Our performance for the year once again proves that our 2018
achievements, in line with our five-year strategic plan ending in
2020, are delivering positive results and will continue to drive
our growth well into the coming years", said Michel Letellier, President and Chief Executive
Officer of Innergex. "Our biggest acquisition to date served as the
springboard for what would be a very busy year that included the
acquisition of several prospective projects, consolidating
ownership assets, and expanding our presence in both Canada and new international markets. While we
are proud of the growth we have achieved, we look forward to
continue on this path to build an even stronger and more
diversified Innergex. Our passion continues to drive us and we look
forward to further our strategy in the year ahead. Our tremendous
growth during this period is a testament to the skills and
experience of our diversified team of experts."
OPERATING
RESULTS
|
|
|
|
Amounts shown are
in thousands of Canadian dollars except as noted
otherwise.
|
Three months
ended
December 31
|
Year ended
December 31
|
2018
|
2017
|
2018
|
|
2017
|
|
|
|
Restated
2
|
|
|
Restated
2
|
|
Power generated
(MWh)
|
1,747,708
|
1,106,060
|
6,283,436
|
|
4,394,210
|
|
Long-term average
(MWh) ("LTA")
|
1,719,485
|
1,133,041
|
6,437,964
|
|
4,763,836
|
|
Revenues
|
166,159
|
107,973
|
576,616
|
|
400,263
|
|
Adjusted
EBITDA1
|
113,151
|
80,059
|
385,081
|
|
298,728
|
|
Adjusted EBITDA
Proportionate1
|
133,012
|
83,199
|
459,107
|
|
308,343
|
|
Net
earnings
|
13,953
|
3,513
|
25,718
|
|
19,136
|
|
Net earnings, $ per
share - basic and diluted
|
0.10
|
0.05
|
0.21
|
|
0.22
|
|
|
|
|
|
|
|
|
|
|
|
Year ended
December 31
|
|
|
|
2018
|
|
2017
|
|
Free Cash
Flow1
|
|
|
105,125
|
|
87,207
|
|
Payout
Ratio1
|
|
|
86
|
%
|
82
|
%
|
|
|
1.
|
Please refer to the
Non-IFRS Measures Disclaimer for the definition of Adjusted EBITDA,
Adjusted EBITDA Proportionate, Free Cash Flow and Payout
Ratio.
|
2.
|
For more information
on the restatement, please refer to the "Accounting Changes"
section of the Management's Discussion and Analysis for the fourth
quarter and year-end 2018.
|
Three-month period ended December
31, 2018
Production increased 58% compared to the
same quarter last year. The Corporation's facilities produced
1,747,708 MWh of electricity or 102% of the LTA of
1,719,485 MWh. Overall, the hydroelectric facilities produced
91% of their LTA, the wind farms produced 106% of their LTA, the
solar farms produced 82% of their LTA and the geothermal facilities
produced 110% of their LTA.
The Corporation recorded revenues of $166.2 million, up 54%, and Adjusted EBITDA of
$113.2 million, up 41%, mainly due to
the contribution of the geothermal facilities acquired as part of
Alterra in February 2018, to the 62%
interest in the Cartier Wind Farms acquired in October 2018 and to higher production at the
Upper Lillooet River hydro facility and French wind facilities. The
Adjusted EBITDA Margin decreased from 74.1% to 68.1% for the
three-month period due mainly to changes in our mix of segments as
geothermal operations have a lower EBITDA margin due to their
higher maintenance, daily operating costs and power purchasing
costs. The Adjusted EBITDA Proportionate reached $133.0 million, up 60%, due mainly to higher
Adjusted EBITDA and a higher Innergex's share of Adjusted EBITDA of
joint ventures and associates stemming from the addition of the
facilities acquired as part of Alterra and Energía Llaima in
2018.
For the three-month period ended December 31, 2018, the
Corporation recorded net earnings of $14.0
million (basic and diluted net earnings of $0.10 per share), compared with net earnings of
$3.5 million (basic and diluted net
earnings of $0.05 per share) for the
corresponding period in 2017. The $10.4
million increase in net earnings can be explained by the
$33.1 million increase in Adjusted
EBITDA and by the $15.0 million
positive change in the share of earnings of joint ventures and
associates, partly offset by the $15.0 million increase in finance costs,
$13.9 million increase in
depreciation and amortization and $6.7
million increase in other net expenses.
Year ended December 31,
2018
Production increased 43% compared to last
year. The Corporation's facilities produced 6,283,436 MWh of
electricity or 98% of the LTA of 6,437,964 MWh. Overall, the
hydroelectric facilities produced 94% of their LTA, the wind farms
produced 100% of their LTA, the solar facilities produced 101% of
their LTA and the geothermal facilities produced 104% of their
LTA.
The Corporation recorded revenues of $576.6 million, up 44%, and Adjusted EBITDA of
$385.1 million, up 29%, due mainly to
the contribution of the geothermal facilities acquired as part of
Alterra in February 2018, the French
wind facilities acquired in 2017 and the 62% interest in the
Cartier Wind Farms acquired in October
2018. The Adjusted EBITDA Margin decreased from 74.6% to
66.8% for the year due mainly to the same factors as for the
three-month period. The year's margin was also impacted by
challenging post-commissioning activities that have been mostly
addressed at the Upper Lillooet River facility. The Adjusted EBITDA
Proportionate reached $459.1 million, up 49%, mainly due to the
addition of the facilities acquired in 2018.
For the year ended December 31, 2018, the Corporation
recorded net earnings of $25.7 million (basic and diluted net
earnings of $0.21 per share),
compared with net earnings of $19.1 million (basic and diluted net
earnings of $0.22 per share) for the
corresponding period in 2017. The $6.6 million increase in net earnings can be
explained by the $86.4 million
increase in Adjusted EBITDA, $29.5 million positive change in the share
of earnings of joint ventures and associates and $4.4 million positive change in income
taxes, partly offset by the $52.3 million increase in finance costs, the
$42.4 million increase in
depreciation and amortization, the $12.8 million negative change in other net
expenses (revenues) and the $6.2 million negative change in unrealized
net loss (gain) on financial instruments.
Free Cash Flow and Payout Ratio
For the year
ended December 31, 2018, the Corporation generated Free Cash
Flow of $105.1 million,
compared with $87.2 million for
the corresponding period last year. The increase in Free Cash Flow
is due mainly to higher cash flows from operating activities before
changes in non-cash working capital items, partly offset by greater
scheduled debt principal payments, higher Free Cash Flow attributed
to non-controlling interests and higher maintenance capital
expenditures net of proceeds from disposals.
For the year ended December 31, 2018, the dividends on
common shares declared by the Corporation amounted to 86% of Free
Cash Flow, compared with 82% for the corresponding period last
year. This change results mainly from higher dividend payments as a
result of the issuance of 24,327,225 shares on
February 6, 2018, related to the Alterra acquisition, to the
increase in the quarterly dividend, to additional shares following
the exercise of share options and to additional shares issued under
the Dividend Reinvestment Plan ("DRIP").
FOURTH QUARTER OPERATIONAL HIGHLIGHTS
On October 22, 2018, Innergex completed the
acquisition of the Hillcrest photovoltaic solar prospective project
of approximately 200 MWAC located in Brown County, Ohio. Interconnection service
agreements are in place with PJM to interconnect to the Duke
Energy-owned Hillcrest substation, that would allow a commercial
operation date in the fourth quarter of 2020.
On October 24, 2018, the
Corporation completed the acquisition of TransCanada's 62% interest
in five wind farms in Quebec's
Gaspé peninsula, known as Baie-des-Sables, Carleton, Gros-Morne, L'Anse-à-Valleau and
Montagne Sèche (the "Cartier Wind Farms"), and its 50% interest in
the operating entities of the Cartier Wind Farms (the "Cartier
Operating Entities") for a total consideration of approximately
$620 million. Innergex already owned
the remaining interests in both the Cartier Wind Farms and Cartier
Operating Entities.
Also on October 24, 2018, the
Corporation obtained two short-term credit facilities to cover the
purchase price and transaction costs in their entirety. Innergex
has obtained a $400 million one-year
non-recourse credit facility to be repaid using the proceeds of a
non-recourse long-term project level financing. The Corporation
also obtained a one-year term credit facility of $228 million to be reimbursed through the
strategic divestment of selected assets that would be optimal for
the long-term performance and outlook of the Corporation.
On December 19, 2018, the
Corporation announced the closing of a non-recourse financing of
$570.4 million with regards to four
operating wind farms ("Cartier Credit Facility"), known as
Carleton, Gros-Morne,
L'Anse-à-Valleau and Montagne Sèche. The Baie-des-Sables wind farm is not included to
secure the Cartier Credit Facility as it secures the corporate
revolving credit facilities. The Cartier Credit Facility has a term
of 14 years. Proceeds of the loan were used to repay the existing
credit facilities of the L'Anse-à-Valleau, Carleton and Montagne Sèche wind farms and to
repay the $400 million one-year
secured bridge loan granted to the Corporation at the time of the
acquisition of the Cartier Wind Farms and Cartier Operating
Entities. Innergex used the rest of the proceeds, net of expenses,
to deleverage its corporate revolving credit facilities.
On December 19, 2018, Innergex
amended and restated its corporate revolving credit facilities to
adjust the security package and extend the maturity date from
December 2022 to December 2023.
In the three-month period ended December
31, 2018, construction work continued at the Phoebe solar
project in Texas. The contractor has completed clearing
of the site and installation of the piles and trackers has
commenced. The Foard City wind
project also in Texas encounters
delays in obtaining the Determination of No Hazards from the
Federal Aviation Administration (FAA), which could result in a
reduction of total installed capacity of the project and affect its
expected commercial operation date, which was postponed to the
fourth quarter of 2019. The negotiation with the FAA, whose
deadline has been affected by the United
States government shutdown, is based on an acceptable
airspace perimeter determination. Mitigation solutions focused on a
reduced perimeter with airspace users have been identified and a
final agreement is being drafted by the parties. Issuance of
permits by the FAA is expected to resume and to follow its normal
course. Most scheduled construction activities are ongoing at the
site.
APPOINTMENT TO THE BOARD OF DIRECTORS
Innergex is
pleased to announce the appointment of Ms. Ouma Sananikone to its Board of Directors,
effective February 27, 2019.
Currently on the board of Macquarie Infrastructure Corporation
(USA), Ms. Ouma Sananikone has acted as chairman on a
number of companies and most recently served as non-executive
director on the board of directors of la Caisse de dépôt et
placement du Québec (Canada) and
Icon Parking Ltd (USA). She has an
extensive experience in banking and finance, particularly asset
management, having spent over 25 years in the industry. Ms.
Sananikone holds a BA (economics and political sciences) from the
Australian National University and a
Master of Commerce (economics) from the University of New South Wales. She is a recipient
of the Centenary Medal from the Australian Government for services
to the Australian finance industry.
"We are pleased to welcome Ms. Ouma
Sananikone to our Board," said Mr. Jean La Couture, Chairman of the Board of
Innergex. "Her extensive knowledge of the banking and finance
sectors as well as in large infrastructure projects will support
Innergex's growth strategy. We look forward to working with Ms.
Sananikone to advance the interests of the Corporation."
DIVIDEND DECLARATION
The following dividends will be
paid by the Corporation on April 15, 2019:
|
|
|
|
|
|
Date of
announcement
|
Record
date
|
Payment
date
|
Dividend per
common share
|
Dividend per
Series A
Preferred
Share
|
Dividend per
Series C
Preferred Share
|
February 27,
2019
|
March 29,
2019
|
April 15,
2019
|
$0.1750
|
$0.2255
|
$0.359375
|
ADDITIONAL INFORMATION
Innergex's 2018 year-end
audited 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 Thursday
February 28, 2019, at 9 AM
(EST). Investors and financial analysts are invited to
access the conference by dialing 1 888 231-8191 or
647 427-7450 or via https://bit.ly/2VwrUFM 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.
The
Corporation is an independent renewable power producer which
develops, acquires, owns and operates hydroelectric facilities,
wind farms, solar farms and geothermal power generation plants. As
a global corporation, Innergex conducts operations in Canada, the United
States, France,
Chile and Iceland. Innergex manages a large portfolio of
assets currently consisting of interests in 68 operating facilities
with an aggregate net installed capacity of 2,082 MW (gross
3,062 MW), including 37 hydroelectric facilities, 25 wind
farms, four solar farms and two geothermal facilities. Innergex
also holds interests in eight projects under development with a net
installed capacity of 900 MW (gross 983 MW), three of which
are currently under construction and prospective projects at
different stages of development with an aggregate gross capacity
totaling 8,147 MW. Respecting the environment and balancing the
best interests of the host communities, its partners, and its
investors are at the heart of the Corporation's development
strategy. Its approach for building shareholder value is to
generate sustainable cash flows, provide an attractive
risk-adjusted return on invested capital and to distribute a stable
dividend. Innergex Renewable Energy Inc. is rated BBB- by
S&P.
Non-IFRS measures disclaimer
The audited consolidated
financial statements for the year ended December 31, 2018,
have been prepared in accordance with International Financial
Reporting Standards ("IFRS"). However, 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 that these indicators are important, as
they provide management and the reader with additional information
about the Corporation's production and cash generation
capabilities, its ability to sustain current dividends and dividend
increases and its ability to fund its growth. These indicators also
facilitate the comparison of results over different periods.
Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted EBITDA
Proportionate, Free Cash Flow and Payout Ratio are not measures
recognized by IFRS and have no standardized meaning prescribed by
IFRS.
|
Three months
ended
December 31
|
Year ended
December
31
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
Restated
1
|
|
|
|
Restated
1
|
|
Net
earnings
|
13,953
|
|
3,513
|
|
25,718
|
|
19,136
|
|
Income tax expenses
(recovery)
|
1,376
|
|
(451)
|
|
2,694
|
|
7,101
|
|
Finance
costs
|
55,444
|
|
40,398
|
|
199,804
|
|
147,492
|
|
Depreciation and
amortization
|
48,349
|
|
34,476
|
|
171,797
|
|
129,429
|
|
EBITDA
|
119,122
|
|
77,936
|
|
400,013
|
|
303,158
|
|
Other net
expenses
|
9,139
|
|
2,480
|
|
15,273
|
|
2,453
|
|
Share of earnings of
joint ventures and associates
|
(16,722)
|
|
(1,707)
|
|
(34,110)
|
|
(4,638)
|
|
Unrealized net (gain)
loss on financial instruments
|
1,612
|
|
1,350
|
|
3,905
|
|
(2,245)
|
|
Adjusted
EBITDA
|
113,151
|
|
80,059
|
|
385,081
|
|
298,728
|
|
Adjusted EBITDA
margin
|
68
|
%
|
74
|
%
|
67
|
%
|
75
|
%
|
|
1.
For more information on the restatement,
please refer to the "Accounting Changes" section of the
Management's Discussion and Analysis for the fourth quarter and
year-end 2018.
|
References in this document to "Adjusted EBITDA" are to net
earnings (loss) to which are added (deducted) provision (recovery)
for income tax expenses, finance cost, depreciation and
amortization, other net expenses, share of (earnings) loss of joint
ventures and associates and unrealized net (gain) loss on financial
instruments. Innergex believes that the presentation of this
measure enhances the understanding of the Corporation's operating
performance. Readers are cautioned that Adjusted EBITDA should not
be construed as an alternative to net earnings, as determined in
accordance with IFRS.
References in this document to "Adjusted EBITDA Margin" are to
Adjusted EBITDA divided by revenues. Innergex believes that the
presentation of this measure enhances the understanding of the
Corporation's operating performance.
References in this document to "Innergex's share of Adjusted
EBITDA of the joint ventures and associates" are to Innergex's
ownership interest in the equity or in the sponsors' equity when
applicable of the Adjusted EBITDA of the joint ventures and
associates.
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. Innergex believes that the
presentation of this measure enhances the understanding of the
Corporation's operating performance. Readers are cautioned that
Adjusted EBITDA Proportionate should not be construed as an
alternative to net earnings, as determined in accordance with
IFRS.
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, preferred share
dividends declared and the portion of Free Cash Flow
attributed to non-controlling interests, plus or minus other
elements that are not representative of the Corporation's long-term
cash generating capacity, such as transaction costs related to
realized acquisitions (which are financed at the time of the
acquisition), realized losses or gains on derivative financial
instruments used to hedge the interest rate on project-level debt
or the exchange rate on equipment purchases. Innergex believes that
presentation of this measure enhances the understanding of the
Corporation's cash generation capabilities, its ability to sustain
current dividends and dividend increases and its ability to fund
its growth. 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 "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 and dividend
increases as well as its ability to fund its growth.
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"). 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 terminology 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, such as expected production, projected revenues, projected
Adjusted EBITDA and projected Adjusted EBITDA Proportionate, 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 Innergex, including, without restrictions, assumptions
concerning project performance, economic, financial and
financial market conditions, expectations and assumptions
concerning availability of capital resources and timely performance
by third-parties of contractual obligations, receipt of regulatory
approvals and the divestiture of select assets. Although Innergex
believes that the expectations and assumptions on which such
forward-looking information is based are reasonable, under the
current circumstances, readers are cautioned not to rely unduly on
this forward-looking information as no assurance can be given that
they will prove to be correct. The forward-looking information
contained in this press release is made as of the date hereof and
Innergex does not undertake any obligation to update or revise any
forward-looking information, whether as a result of events or
circumstances occurring after the date hereof, unless so required
by law.
Since forward-looking information addresses future events and
conditions, it is by its very nature subject to inherent risks and
uncertainties. Forward-looking information involves 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. These include, but are not limited
to, the risks associated with the ability of Innergex to execute
its strategy for building shareholder value (including through the
potential divestiture of selected assets), its ability to raise
additional capital and the state of the capital markets, liquidity
risks related to derivative financial instruments, variability in
hydrology, geothermal resources, wind regimes and solar
irradiation, uncertainties surrounding the development of new
facilities, interest rate fluctuations and refinancing risks,
financial leverage and restrictive covenants governing current and
future indebtedness, failure to realize the anticipated benefits of
such acquisitions (including the acquisition of the Cartier Wind
Farms), variability of installations performance and related
penalties, foreign exchange fluctuations and the fact that revenues
from certain facilities will vary based on the market (or spot)
price of electricity.
The following table outlines Forward-looking information
contained in this press release, the principal assumptions used to
derive this information and the principal risks and uncertainties
that could cause actual results to differ materially from this
information.
|
|
Principal
Assumptions
|
Principal Risks and
Uncertainties
|
Expected
production
For each facility,
the Corporation determines a long-term average annual level of
electricity production ("LTA") over the expected life of the
facility, based on engineers' studies that take into consideration
a number of important factors: for hydroelectricity, the
historically observed flows of the river, the operating head, the
technology employed and the reserved aesthetic and ecological
flows; for wind energy, the historical wind and meteorological
conditions and turbine technology; for solar energy, the historical
solar irradiation conditions, panel technology and expected solar
panel degradation and for geothermal power facilities, the
historical geothermal resources natural depletion of geothermal
resources over time, the technology used and the potential of
energy loss to occur before delivery. Other factors taken into
account include, without limitation, site topography, installed
capacity, energy losses, operational features and maintenance.
Although production will fluctuate from year to year, over an
extended period it should approach the estimated LTA. On a
consolidated basis, the Corporation estimates its LTA by adding
together the expected LTAs of all the facilities in operation, for
the facilities that it consolidates. This consolidation excludes
however the facilities which are accounted for using the equity
method (Dokie, East Toba, Flat Top, Guayacan, Jimmie Creek, Mampil,
Montrose Creek, Pampa Elvira, Peuchén, Shannon, Umbata Falls and
Viger-Denonville).
|
Improper assessment
of water, wind, solar and geothermal resources and associated
electricity production
Variability in
hydrology, wind regimes, solar irradiation and geothermal
resources
Risks inherent in
geothermal resource
Equipment supply
risk, including failure or unexpected operations and maintenance
activity
Natural disasters and
force majeure
Regulatory and
political risks affecting production
Health, safety and
environmental risks affecting production
Variability of
installation performance and related penalties
Availability and
reliability of transmission systems
Litigation
|
Projected
revenues
For each facility,
expected annual revenues are estimated by multiplying the LTA by a
price for electricity stipulated in the PPA secured with a public
utility or other creditworthy counterparty mainly. In most cases
these PPAs stipulate a base price for electricity produced and, in
some cases, a price adjustment depending on the month, day and hour
of its delivery. This excludes facilities, which receive revenues,
based on the market (or spot) price for electricity, including the
Miller Creek hydroelectric facility, which receives a price based
on a formula using the Platts Mid-C pricing indices, the Horseshoe
Bend hydroelectric facility, for which 85% of the price is fixed
and 15% is adjusted annually as determined by the Idaho Public
Utility Commission. Revenues at the HS Orka facilities also
fluctuate with the price of aluminum, as certain of those PPAs are
linked to such price. In most cases, power purchase agreements also
contain an annual inflation adjustment based on a portion of the
Consumer Price Index. On a consolidated basis, the Corporation
estimates annual revenues by adding together the projected revenues
of all the facilities in operation that it consolidates This
consolidation excludes however the facilities which are accounted
for using the equity method (Dokie, East Toba, Flat Top, Guayacan,
Jimmie Creek, Mampil, Montrose Creek, Pampa Elvira, Peuchén,
Shannon, Umbata Falls and Viger-Denonville).
|
See principal
assumptions, risks and uncertainties identified under "Expected
Production"
Reliance on various
forms of PPAs
Revenues from certain
facilities will vary based on the market (or spot) price of
electricity
Fluctuations
affecting prospective power prices
Changes in general
economic conditions
Ability to secure new
Power Purchase Agreements or Renew any Power Purchase
Agreement
|
Projected Adjusted
EBITDA
For each facility,
the Corporation estimates annual operating earnings by adding
(deducting) to net earnings (loss) provision (recovery) for income
tax expenses, finance cost, depreciation and amortization, other
net expenses, share of (earnings) loss of joint ventures and
associates and unrealized net (gain) loss on financial instruments.
The Adjusted EBITDA consolidated excludes however the facilities
which are accounted for using the equity method (Dokie, East Toba,
Flat Top, Guayacan, Jimmie Creek, Mampil, Montrose Creek, Pampa
Elvira, Peuchén, Shannon, Umbata Falls and Viger-Denonville).
Innergex believes that the presentation of this measure enhances
the understanding of the Corporation's operating performance.
Readers are cautioned that Projected Adjusted EBITDA should not be
construed as an alternative to net earnings, as determined in
accordance with IFRS.
|
See principal
assumptions, risks and uncertainties identified under "Expected
Production" and "Projected Revenues"
|
Estimated project
costs, expected obtainment of permits, start of construction,
work conducted and start of commercial operation for
Development Projects or Prospective Projects
For each Development
Project and Prospective Project, the Corporation may provide (where
available) an estimate of potential installed capacity, estimated
project costs, project financing terms and each project's
development and construction schedule, based on its extensive
experience as a developer, in addition to information directly
related incremental internal costs, site acquisition costs and
financing costs, which are eventually adjusted for the projected
costs and construction schedule provided by the engineering,
procurement and construction ("EPC") contractor retained for the
project.
The Corporation
provides indications based on assumptions regarding its current
strategic positioning and competitive outlook, as well as
scheduling and construction progress, for its Development Projects
and its Prospective Projects, which the Corporation evaluates based
on its experience as a developer.
|
Uncertainties
surrounding development of new facilities
Performance of major
counterparties, such as suppliers or contractors
Delays and cost
overruns in the design and construction of projects
Ability to secure
appropriate land
Obtainment of
permits
Health, safety and
environmental risks
Social acceptance of
renewable energy projects
Ability to secure new
power Purchase Agreements or renew any power purchase
agreement
Relationships with
stakeholders
Equipment
supply
Interest rate
fluctuations and financing risk
Risks related to U.S.
PTCs and ITCs, changes in U.S. corporate tax rates and availability
of tax equity financing
Relationships with
stakeholders
Regulatory and
political risks
Higher-than-expected
inflation
Natural
disaster
Ability of the
Corporation to execute its strategy for building shareholder
value
Failure to realize
the anticipated benefits of completed and future
acquisitions
Changes in
governmental support to increase electricity to be generated from
renewable sources by independent power producers
Regulatory and
political risks
Foreign market growth
and development risks
Outcome of insurance
claims
|
Qualification for
PTCs and ITC
For certain
Development Projects in the United States, the Corporation has
conducted on- and off-site activities expected to qualify its
Development Projects for PTCs or ITC at the full rate and to obtain
tax equity financing on such a basis. To assess the potential
qualification of a project, the Corporation takes into account the
construction work performed and the timing of such work.
|
Risks related to U.S.
PTCs and ITCs, changes in U.S. corporate tax rates and availability
of tax equity financing
Regulatory and
political risks
Delays and cost
overruns in the design and construction of projects
Obtainment of
permits
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Potential
divestiture of selected assets
The Corporation
ability to successfully identify potential purchasers for some of
the Corporation's assets and its ability to assess and realize the
value of such assessment in a successful divestiture and the timing
of the completion of the transaction.
|
Ability of the
Corporation to execute its strategy for building shareholder
value
Regulatory and
political risks
Performance of
counterparties
Financial leverage
and restrictive covenants governing current and future
indebtedness
Fluctuations
affecting prospective power Prices
Variability in
hydrology, geothermal resources, wind regimes and solar
irradiation
Failure to realize
the anticipated benefits of completed and future acquisitions
(including the acquisition of the Cartier Wind Farms)
Ability to raise
additional capital and the state of the capital market
Interest rate
fluctuations and refinancing risk
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Although the Corporation believes that the expectations and
assumptions on which Forward-Looking Information is based are
reasonable, readers of this press release are cautioned not to rely
unduly on this Forward-Looking Information since no assurance can
be given that they will prove to be correct. The forward-looking
statements contained in this press release are made as of the date
hereof and Innergex undertakes no obligation to publicly update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise, unless so required by
applicable securities laws.
SOURCE Innergex Renewable Energy Inc.