Stock Name: INE
Amount: CAD 0.3125
Announcement Date: 21/03/2012
Record Date: 28/03/2012
Dividend Detail:
POWER GENERATED INCREASES 55% DUE TO CLOUDWORKS ACQUISITION AND
FAVOURABLE HYDROLOGY AND WIND REGIMES
For the Year
Power generated increases 55% to 1,905,426 MWh;
Operating Revenues increase 62% to $148.3 million and EBITDA increases
63% to $111.2 million.
For the Fourth Quarter
Power generated increases 18% to 403,920 MWh;
Operating Revenues increase 24% to $33.1 million and EBITDA increases
15% to $21.8 million.
LONGUEUIL, QC, March 21, 2012 /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,��2011.
"The Company continues to execute its strategic plan, increasing the
number of operating facilities, projects under construction and under
development, as well as the pipeline of prospective projects", stated
Michel Letellier, President and Chief Executive Officer of the
Corporation. The integration of the Cloudworks acquisition completed
during the year contributed to the significant growth in operating
revenues and earnings. Furthermore, the commissioning of two new wind
farms expanded the Corporation's portfolio of cash flow generating
facilities. Mr.��Letellier also noted that "2011 was extremely busy,
considering that at one point we were overseeing construction on as
many as six sites simultaneously, in each of our three geographic
markets across Canada and in each of our three renewable energy
sectors. We are very satisfied with our progress on all fronts."
OPERATING RESULTS
Amounts shown are in thousands of Canadian dollars except as noted
otherwise.
�� | �� | �� | �� | ||
Highlights | Three-month period | �� | Twelve-month period | ||
For the period ended December 31 | 2011 | 2010 | �� | 2011 | 2010 |
���� | �� | �� | �� | �� | �� |
Power generated (MWh) | 403,920 | 343,754 | �� | 1,905,426 | 1,227,435 |
Long-term average (MWh) | 465,144 | 325,236 | �� | 1,884,531 | 1,269,059 |
Operating revenues | 33,134 | 26,831 | �� | 148,260 | 91,385 |
EBITDA | 21,756 | 18,878 | �� | 111,196 | 68,111 |
Net earnings (loss) | (21,002) | 14,745 | �� | (43,704) | (68,703) |
Net earnings (loss), $ per share | (0.18) | 0.23 | �� | (0.59) | (1.13) |
Adjusted net earnings (loss) | (6,716) | 3,351 | �� | 1,176 | (1,169) |
Annual Results
The substantial increases in power generated, operating revenues, and
EBITDA recorded for the year ended December 31, 2011 result mainly from
the Cloudworks acquisition made last April. These results also reflect
a full year of consolidation following the strategic combination by way
of reverse takeover of the Corporation by Innergex Power Income Fund in
March 2010. Furthermore, power generated reached 101% of long-term
average for the year as a whole.
The decrease in net loss for the year resulted in part from higher
EBITDA. This earnings' improvement was offset by higher finance costs
and depreciation and amortization expenses resulting from the
Cloudworks acquisition, as well as a greater unrealized net loss on
derivative financial instruments caused by a decrease in benchmark
interest rates; the Corporation uses these derivative instruments to
hedge the Corporation's debt against interest rate fluctuations. Since
the Corporation does not use hedge accounting, changes in the fair
market value of derivative financial instruments have a direct effect
on net earnings. In addition, an unrealized loss of $51.8��million on
unitholders' capital was recorded in 2010, following the adoption of
IFRS.
As mentioned, the Corporation uses derivative financial instruments to
manage its exposure to the risk of rising interest rates on its debt
financing and therefore protect the economic value of its projects. At
December��31,��2011, 88% of the Corporation's actual debt and planned
indebtedness were protected from interest rate increases.
Fourth Quarter Results
For the three-month period ended December 31, 2011, the increases in
power generated, operating revenues, and EBITDA were due mainly to the
addition of the Harrison operating facilities acquired as part of the
Cloudworks acquisition. The more modest increase in EBITDA can be
attributed to higher operating expenses, including planned sand removal
operations at the Horseshoe Bend facility. Furthermore, power generated
in the fourth quarter was below the long-term average, mainly because
of weak hydrology in British Columbia.
The Corporation reported a net loss for the fourth quarter, compared to
net earnings the previous year, as the increase in EBITDA was offset by
higher finance costs and depreciation and amortization expenses
resulting from the Cloudworks acquisition. Net losses for the quarter
also resulted from a large unrealized net loss on derivative financial
instruments, compared to an unrealized net gain on derivative
instruments in the fourth quarter of 2010.
The Corporation believes that adjusted net earnings (loss) represent
important additional information because they provide a profitability
measure that excludes certain elements that have no impact on cash on
hand, such as unrealized net gains or losses on derivative financial
instruments, unitholders' capital, and foreign exchange, as well as the
associated deferred tax impact of these items.
�� | �� | �� | �� | ||
Adjusted Net Earnings (Loss) | Three-month period | �� | Twelve-month period | ||
For the period ended December 31 | 2011 | 2010 | �� | 2011 | 2010 |
�� | �� | �� | �� | �� | �� |
Net earnings (loss) | (21,002) | 14,745 | �� | (43,704) | (68,703) |
�� | �� | �� | �� | �� | �� |
Add (deduct): | �� | �� | �� | �� | �� |
�� | �� | �� | �� | �� | �� |
Non-cash expense related to royalty agreement | - | - | �� | - | 983 |
Unrealized net loss (gain) on derivative financial instruments | 19,596 | (15,479) | �� | 61,479 | 20,761 |
Unrealized loss on unitholders' capital | - | - | �� | - | 51,761 |
Unrealized net gain on foreign exchange | (27) | (20) | �� | - | (28) |
Deferred income tax expense (recovery) associated with the above elements | (5,284) | 4,106 | �� | (16,599) | (5,943) |
Adjusted net earnings (loss) | (6,716) | 3,351 | �� | 1,176 | (1,169) |
The Corporation also believes that adjusted cash flows from operating
activities provide another important measure of its operating
performance and sustainability:
�� | �� | �� | �� |
Adjusted Cash Flows From Operating Activities | Twelve-month period | ||
For the period ended December 31 | 2011 | �� | 2010 |
�� | �� | �� | �� |
Cash flows from operating activities | 43,445 | �� | 8,163 |
Change in non-cash operating working capital items | 23,728 | �� | 21,838 |
Transaction costs | 1,863 | �� | 5,159 |
Distributions paid to unitholders | - | �� | 9,688 |
Net funds withdrawn from the reserve accounts (not funded from long-term debt) | 7,989 | �� | 42 |
Adjusted cash flows from operating activities | 77,025 | �� | 44,890 |
The improvement in adjusted cash flows from operating activities for the
year ended December 31, 2011 is due mainly to the $43.1 million
increase in EBITDA compared to the previous year and to a $7.9 million
withdrawal from reserve accounts, which were partly offset by a $19.8
million increase in interest paid.
HIGHLIGHTS OF 2011 - INNERGEX CONTINUES TO DELIVER ON ITS COMMITMENTS
Acquisition of Cloudworks Energy Inc. - Geographic diversification and a
strong pipeline of development and prospective projects
On April 4, 2011, Innergex closed the acquisition of Cloudworks Energy
Inc. for total consideration of $191 million, which included a 50.01%
interest in six operating run-of-river hydroelectric facilities, three
wholly-owned development projects with 40 year PPAs, and over 800��MW of
prospective projects in various stages of development. As of the
closing date, Cloudworks' assets had increased the Corporation's net
installed capacity by 23% and increased the weighted average remaining
PPA term (including development projects) from 21 to 25 years. The six
Harrison Operating Facilities are expected to generate approximately
$53 million in revenues annually (based on 100% ownership and including
$6 million in revenues from the ecoENERGY Program).
Acquisition of Stardale - Diversification into an additional energy
source to hydro and wind
On April 20, 2011 Innergex completed the acquisition of the 33.2��MWDC Stardale solar photovoltaic farm, for a total consideration of
approximately $11.8 million. Construction of the Stardale project began
in November 2010; the solar farm is expected to begin commercial
operations during the second quarter of 2012. All of the energy
delivered by the Stardale project is covered by three Renewable Energy
Standard Offer Program contracts ("RESOP" contracts) with the Ontario
Power Authority ("OPA"), each with a 20-year term beginning on the
commercial operation date. Stardale is expected to generate revenues of
approximately $16 million annually for the Corporation.
Approval by the R��gie de l'��nergie of the Viger-Denonville PPA - Growing
the number of development projects
On November 22, 2011, the Corporation announced it had received approval
from the R��gie de l'��nergie for the 20-year PPA awarded in December
2010 by Hydro-Qu��bec in respect of the Viger-Denonville community wind
farm project located in the Qu��bec municipalities of
Saint-Paul-de-la-Croix and Saint-��piphane. Developed through a 50-50
joint venture with the Rivi��re-du-Loup Regional County Municipality,
the Viger-Denonville wind farm project will include 12 wind turbines
with an installed capacity of 24.6 MW. Construction is expected to
begin in the spring of 2013. The wind farm is expected to begin
commercial operation in December 2013 and to generate annual revenues
of approximately $5 million for the Corporation.
Commissioning of two new wind farms - Increasing cash flow generating
facilities
Located on the Gasp�� Peninsula in Quebec, the Montagne S��che and
Gros-Morne I wind farms were built through the Cartier Wind Energy
joint venture, in which Innergex owns a 38% interest and a 50%
management stake. Both wind farms were commissioned on time and in line
with budgets. The Montagne S��che wind farm began commercial operations
on November 25, 2011; with 39 wind turbines and a gross installed
capacity of 58.5 MW (net 22.2 MW), it is expected to generate revenues
of approximately $5��million annually for the Corporation. The
Gros-Morne I wind farm began commercial operations on November 29,
2011; with 67 wind turbines and a gross installed capacity of 100.5 MW
(net 38.2��MW), it is expected to generate revenues of approximately
$8��million annually for the Corporation.
Almost $700 million of financing raised in the capital markets
In April, Innergex completed a common share issue of $39 million by way
of private placement as part of the Cloudworks acquisition. At the same
time, it completed a public offering of common shares totalling
$166��million. In July, the Corporation executed a loan agreement with
Bank of Tokyo Mitsubishi UFJ, Ltd. as lead arranger and administrative
agent, for the construction and long-term debt financing of the
Stardale project consisting of a $111.7 million non-recourse term loan
and a $5.6��million letter of credit facility. In August, Innergex
completed the extension and refinancing of its $170 million revolving
credit facility, with a five-year $350 million revolving term credit
facility, providing improved borrowing flexibility and conditions.
DEVELOPMENT PROJECTS
Gros-Morne II wind farm
The construction of this wind farm began in the second quarter of 2010.
At the end of 2011, all the foundations had been completed, all the
roads had been built and the substation had been energized. As planned,
construction activities have been halted for the winter period; they
will resume in the spring of 2012. Innergex expects the Gros-Morne II
project to be completed by December 1, 2012.
Viger-Denonville wind farm
Current activities include environmental studies, consultation with the
various stakeholders and applications for obtaining the relevant
permits. As of the date of this press release, the interconnection
agreement with Hydro-Qu��bec had also been concluded. Construction of
this project is expected to start in the spring of 2013.
Stardale solar farm
The construction of this solar farm began in November 2010. At as
December 31, 2011, 96% of inverter substation buildings and the entire
substation grounding system had been completed and 24% of PV SolarWorld
modules had been installed on rackings. As of the date of this press
release, the vast majority of the PV modules had been installed on
rackings and preparation for commissioning activities was under way.
Although Innergex expects the Stardale project to be completed in the
second quarter of 2012, it is scheduled to begin delivering electricity
in the first quarter of 2012.
Kwoiek Creek hydroelectric facility
As at December 31, 2011, all permits had been granted and the
engineering, procurement, and construction��("EPC") contractor had begun
the powerhouse and penstock excavation under limited notices to
proceed. During the last quarter of 2011, the turbine and power house
design, the transmission line design, the transmission line clearing,
and the penstock final design were done by the respective suppliers. As
of the date of this press release, the EPC contractor had been given
full notice to proceed and agreements with the electro mechanic and
transmission line suppliers had been signed. Construction of this
facility is expected to be completed by the end of the fourth quarter
of 2013.
Northwest Stave River hydroelectric facility
During the last quarter of 2011, the turbine supplier was selected and
the EPC contractor continued engineering and preliminary construction
work under limited notices to proceed. As planned, construction
activities have been halted for the winter period; they will resume in
the spring of 2012. Construction of this facility is expected to be
completed in the last quarter of 2013.
Boulder Creek, Tretheway Creek, North Creek, Upper Lillooet, and Big
Silver-Shovel Creek hydroelectric facilities
Current activities include geotechnical analysis, hydrometric
monitoring, environmental studies, consultation with the various
stakeholders, applications for obtaining the relevant permits, and
preliminary engineering. As of the date of this press release,
applications had been submitted to the Environmental Assessment Office
for the Boulder Creek, North Creek, and Upper Lillooet projects.
PROSPECTIVE PROJECTS
All of the prospective projects, with a combined potential net installed
capacity of 2,844 MW (gross 2,977 MW), are in the preliminary
development stage. Some prospective projects are targeted towards
specific future Requests For Proposals ("RFP"), Standing Offer Programs
("SOP"), or Feed-in Tariff ("FIT") programs and others will be
available for future RFPs yet to be announced. There is no certainty
that any prospective project will be realized.
During 2011, the Corporation submitted four applications of 10.0 MW each
under the FIT Program for solar photovoltaic projects in Ontario,
bringing Innergex's total number of FIT Program applications for solar
photovoltaic projects to six, with a combined capacity of 59.0 MW.
The Corporation also has several prospective projects that could be
eligible under British Columbia's SOP, including at least six
hydroelectric projects with a capacity of up to 15 MW each, which it
continues to investigate for submission.
SUBSEQUENT EVENTS
Subsequent to December 31, 2011, the Corporation has executed two
engagement letters for the construction and long-term debt financing of
the Kwoeik Creek and Northwest Stave River projects, for non-recourse
term loans of up to $160 million and $85 million, respectively.
DIVIDEND DECLARATION
Dividends to Preferred Shareholders
On March 21, 2012, the Corporation declared a dividend of $0.3125 per
Series A Preferred Share payable on April��16, 2012, to Series A
preferred shareholders of record at the close of business on March 30,
2012.
Dividends to Common Shareholders
On March 21, 2012, the Corporation declared a dividend of $0.1450 per
common share payable on April��16,��2012, to common shareholders of
record at the close of business on March��30, 2012.
CONFERENCE CALL REMINDER
The Corporation will hold a conference call tomorrow, Thursday, March
22, 2012 at 10:00 a.m. ET. The fourth quarter and annual results will
be presented by Mr. Michel Letellier, President and Chief Executive
Officer of Innergex and by Jean Trudel, Chief Investment Officer and
Senior Vice President - Communications. Investors and financial
analysts are invited to access the conference call by dialing 416��644-3426 or 1��800��731-5319. Media and the public may also access this conference call, on a
listen-only mode. A replay of the conference call will be available at 1��877��289-8525 (access code: 4507281#) until March 29, 2012, at 11:59��p.m.��ET.
NON-IFRS MEASURES
The consolidated financial statements for the three and twelve-month
periods ended December 31, 2011 have been prepared in accordance with
International Financial Reporting Standards ("IFRS").
However, some measures referred to in this news 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 its production and cash generation
capabilities, and facilitate the comparison of results over different
periods. EBITDA, adjusted net earnings, and adjusted cash flows from
operating activities are not measures recognized by IFRS and have no
standardized meaning prescribed by IFRS. References in this news
release to "EBITDA" are to earnings before interest, provision for
income taxes, depreciation and amortization, and other items.
References in this news release to adjusted net earnings and adjusted
cash flows from operating activities are explained in the tables
herein. Investors are cautioned that these non-IFRS measures should not
be construed as an alternative to net income as determined in
accordance with IFRS.
FORWARD-LOOKING INFORMATION
In order to inform shareholders of Innergex as well as potential
investors in the Corporation's future prospects, sections of this news
release may contain forward-looking information within the meaning of
securities legislation ("Forward-Looking Information"). Forward-Looking
Information can generally be identified by the use of words and
phrases, such as "may," "will," "estimate," "anticipate," "plans,"
"expects" or "does not expect," "is expected," "budget," "scheduled,"
"forecasts," "intends" or "believes," or variations of such words and
phrases that state that certain events will occur. Forward-Looking
Information represents, as of the date of this news release, the
estimates, forecasts, projections, expectations, or opinions of the
Corporation relating to future events or results. Forward-looking
Information involves known and unknown risks, uncertainties and other
important factors, which may cause the actual results or performance to
be materially different from any future results or performance
expressed or implied by the Forward-Looking Information. The material
risks and uncertainties which may cause the actual results and
developments to be materially different from the current expressed
expectations in this news release include, without limitation:
(i)��execution of strategy; (ii)��capital resources; (iii)��derivative
financial instruments; (iv)��current economic and financial crisis;
(v)��availability of water flows, wind and sun light; (vi) construction
and design; (vii)��development of new facilities; (viii)��project
performance; (ix)��equipment failure; *��interest rate and refinancing
risk; (xi)��financial leverage and restrictive covenants; and
(xii)��relationship with public utilities. Although the Corporation
believes that the expectations instigated by the Forward-Looking
Information are based on reasonable and valid hypotheses, there is a
risk that the Forward-looking Information may be incorrect. The reader
is cautioned not to rely unduly on these Forward-Looking Information.
The Forward-Looking Information expressed verbally or in writing, by
the Corporation or by a person acting on its behalf, are expressly
qualified by this cautionary statement. The Corporation 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 required by legislation.
Innergex Renewable Energy Inc. (TSX: INE) is a leading Canadian independent renewable power producer.
The Company develops, owns, and operates run-of-river hydroelectric
facilities, wind farms, and solar photovoltaic farms and carries out
its operations in Quebec, Ontario, British Columbia, and Idaho, USA.
Its portfolio of assets consists of: (i) interests in 25 operating
facilities with an aggregate net installed capacity of 461��MW (gross
847��MW), including 20 hydroelectric operating facilities and five wind
farms; (ii) interests in 10 projects under development or under
construction with an aggregate net installed capacity of 264��MW (gross
407��MW), for which power purchase agreements have been secured; and
(iii) prospective projects with an aggregate net capacity totaling more
than 2,844 MW (gross 2,977��MW).
The Corporation's strategy for building shareholder value is to develop
or acquire high-quality facilities generating sustainable cash flows
and providing a high return on invested capital, and to distribute a
stable dividend.
Innergex Renewable Energy Inc. is rated BBB- by S&P and BBB (low) by
DBRS.
The Corporation's Series A preferred shares (TSX: INE.PR.A) are rated
P-3 by S&P and Pfd-3 (low) by DBRS.
��
For further information:
Marie-Jos��e Privyk, CFA
Director - Investor Relations
Innergex Renewable Energy Inc.
Tel.: 450 928-2550, ext. 222
mjprivyk@innergex.com
Jean Trudel, MBA
Chief Investment Officer and
Senior Vice President - Communications
Innergex Renewable Energy Inc.
Tel.: 450 928-2550, ext. 252
jtrudel@innergex.com
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