LONGUEUIL - Innergex Renewable Energy Inc. (TSX: INE) ('Innergex' or the 'Corporation') today released its operating and financial results for the second quarter ended June 30, 2020.
The recent commissionings in the wind and solar segments contributed to posting increased results this quarter compared to the same period last year, despite the curtailment imposed by BC Hydro in the hydroelectric power generation segment.
'Along with the continued construction of Hillcrest and the good news that work resumed at Innavik, the past months were also very exciting in terms of development, with significant progress for our prospective and development projects,' said Michel Letellier, President and Chief executive Officer of Innergex. 'We made huge strides with our Griffin Trail wind project in Texas following the extension of the Production Tax Credit program. We also qualified two new solar and battery projects in the second Hawaii RFP, and we are rapidly progressing with multiple other promising projects in the Northeast and other parts of the United States. Our development efforts in France are beginning to pay off with the construction of the Yonne II wind farm, the development of our first stand-alone battery storage project and the advancement of other prospective projects. We are very optimistic for our future, which will combine our own development efforts with strategic acquisitions that will further solidify our balanced portfolio of assets. We recently completed two acquisitions that should have a positive impact on cash available for distribution and reduce pressure on our payout ratio.'
Update on COVID-19
Innergex took numerous measures to protect employees, suppliers and business partners from COVID-19.
Power production activities have continued in all segments as they have been deemed essential service in every region where we operate.
BC Hydro sent curtailment notices for some hydro facilities for the period from May 22, 2020 and to July 20, 2020. BC Hydro cites the current COVID-19 pandemic and related governmental measures taken in response to it as constituting a 'force majeure' event under the electricity purchase agreements ('EPAs'), and resulting in a situation in which BC Hydro is unable to accept or purchase energy under the EPAs. Innergex disputes that the current pandemic and related governmental measures in any way prevent BC Hydro from fulfilling its obligations to accept and purchase energy under the EPAs or enable it to invoke 'force majeure' provisions under the EPAs to suspend these obligations. Innergex complied with BC Hydro's curtailment request, but did so under protest and will seek to enforce its rights under the EPAs.
Our renewable power production is sold mainly through power purchase agreements, which include sufficient protection to prevent for material reduction in demand, to solid counterparts and no credit issues are anticipated. As such, we do not intend to make any changes to our workforce and we intend to maintain salaries and benefits.
Construction activities at our Hillcrest solar project continued without interruption while construction activities for the Innavik hydro project and Yonne II wind project have resumed in July 2020.
Support to Surrounding Communities
To support communities surrounding our facilities and projects in all segments, the Corporation launched the 'Time for Solidarity' campaign in March 2020.
The Corporation distributed $255,000 in total to local charities such as food banks, women shelters and relief organizations to alleviate the effects of the COVID-19 crisis. Employees were also invited to make personal donations to these charities and proudly raised $37,225. Such relief organizations included Centraide United Way, Ressort Gaspesie-Iles-de-la-Madeleine, BC First Nations Health Authority, BC Society of Transition Houses, Women in Need, BCAAFC - British Columbia Association of Aboriginal Friendship Centres, Moisson Montreal and Regroupement des centres d'amitie autochtones du Quebec in Canada, the Wichita Falls Feeding America Food Bank, United Way and Hope Emergency Services in the United States, Restos du Coeur in France, and Red de Alimentos and Banco de Alimentos Biobio Solidario in Chile.
About Innergex Renewable Energy Inc.
For 30 years, Innergex has believed in a world where abundant renewable energy promotes healthier communities and creates shared prosperity. As an independent renewable power producer which develops, acquires, owns and operates hydroelectric facilities, wind farms, solar farms and energy storage facilities, Innergex is convinced that generating power from renewable sources will lead the way to a better world. Innergex conducts operations in Canada, the United States, France and Chile and manages a large portfolio of high-quality assets currently consisting of interests in 75 operating facilities with an aggregate net installed capacity of 2,742 MW (gross 3,694 MW) and an energy storage capacity of 150 MWh, including 37 hydroelectric facilities, 32 wind farms and six solar farms. Innergex also holds interests in eight projects under development, three of which are under construction, with a net installed capacity of 520 MW (gross 594 MW) and an energy storage capacity of 189 MWh, as well as prospective projects at different stages of development with an aggregate gross capacity totaling 6,906 MW. Its approach to building shareholder value is to generate sustainable cash flows, provide an attractive risk-adjusted return on invested capital and to distribute a stable dividend.
Non-IFRS measures disclaimer
The unaudited consolidated financial statements for the six-month period ended June 30, 2020, 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. Innergex's share of Revenues of joint ventures and associates, Revenues Proportionate, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted EBITDA Proportionate, Adjusted EBITDA Proportionate Margin, Innergex's share of Adjusted EBITDA of joint ventures and associates, Adjusted Net Earnings (Loss) from Continuing Operations, Free Cash Flow, Adjusted Free Cash Flow, Payout Ratio and Adjusted Payout Ratio are not measures recognized by IFRS and have no standardized meaning prescribed by IFRS.
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 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 Strategic Alliance), business integration, governance, business outlook, objectives, plans and strategic priorities, and other statements that are not historical facts. 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 terms 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, including information regarding the Corporation's expected production, the estimated project costs, projected revenues, projected Adjusted EBITDA and projected Adjusted EBITDA Proportionate, Projected Free Cash Flow 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 U.S. projects for PTCs and ITCs and other statements that are not historical facts. Such information is intended 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, its ability to raise additional capital and the state of the capital markets, liquidity risks related to derivative financial instruments, variability in hydrology, 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, 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.
To combat the spread of the COVID-19, authorities in all regions where we operate have put in place restrictive measures for businesses. However, these measures have not impacted the Corporation in a material way to date as electricity production has been deemed essential service in every region where we operate. Only BC Hydro sent curtailment notices for some hydro facilities that the Corporation disputes. Our renewable power production is sold mainly through PPAs to solid counterparts. It is not excluded that current or future restrictive measures might have an adverse effect on the financial stability of the Corporation's suppliers and other partners, or on the Corporation's operating results and financial position. The issuance of permits and authorizations, negotiations and finalizations of agreements with regards to development and acquisition projects, construction activities and procurement of equipment could be adversely impacted by the COVID-19 restrictive measures.
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.
Contact:
Jean-Francois Neault
Tel: 450 928.2550
Email: jfneault@innergex.com
INNERGEX RENEWABLE ENERGY INC. 
