Innergex reports second quarter 2013 results

CAPACITY ADDITIONS, FINANCINGS, AND DEVELOPMENT ON TRACK 


    --  Production increases 14% for the quarter, and 16% for 6 months
    --  Operating revenues increase 16% to $63.2 million for the
        quarter, and 20% to $98.9 million for 6 months
    --  Adjusted EBITDA increases 15% to $51.3 million for the quarter,
        and 22% to $76.7 million for 6 months
    --  Power generated reaches 103% of long-term average for the
        quarter, and 96% for 6 months
    --  Magpie acquisition closed on July 25, 2013

LONGUEUIL, QC, Aug. 8, 2013 /CNW Telbec/ - Innergex Renewable Energy Inc. 
(TSX:INE) ("Innergex" or the "Corporation") releases its operating and 
financial results for the second quarter ended June30, 2013.

"Capacity additions have continued to fuel Innergex's growth in the second 
quarter. At the same time, we have continued to advance the construction of 
three projects expected to reach commercial operation before the end of the 
year and the development of five projects under permit phase; we also closed 
three project financings and extended the revolving term credit facility for 
greater financing flexibility. A few weeks ago, we also completed the 
previously announced acquisition of the Magpie hydroelectric facility", 
declares Michel Letellier, President and Chief Executive Officer of the 
Corporation.

OPERATING RESULTS
Amounts shown are in thousands of Canadian dollars except as noted otherwise.  
                                                             
                              Three months               Six months

For the periods ended     2013       2012          2013        2012
June 30
                                  Restated(3)               Restated(3)
                                                                       

Power generated (MWh)   792,542       694,662   1,178,711     1,013,996

Long-term average (MWh) 766,961       691,966   1,228,490     1,086,625

Operating revenues       63,167        54,360      98,855        82,429

Adjusted EBITDA(1)       51,260        44,604      76,663        62,893

Net earnings (loss)      31,039      (11,865)      30,861       (4,060)

Net earnings (loss), $                                     
per share(2)               0.28        (0.12)        0.29        (0.03)

(1) Adjusted EBITDA is defined as operating revenues less operating
    expenses, general and administrative expenses and prospective
    project expenses.

(2) Net earnings (loss) per share is calculated as net earnings (loss)
    attributable to owners of the parent, less dividends declared on
    preferred shares, divided by the weighted average number of common
    shares outstanding.

(3) 2012 results have been restated to reflect the application of IFRS
    11.

Second quarter results

For the three-month period ended June30, 2013, electricity production 
reached 792.5GWh, or 103% of the long-term average, compared to 100% in the 
corresponding quarter last year. Production levels are attributable to 
above-average water flows in all geographic markets, especially Ontario and 
the United States, while wind conditions were slightly lower than anticipated 
at all of the wind farms, except Gros-Morne which had above-average 
production. The Stardale solar farm produced slightly more than its long-term 
average.

Operating revenues increased by 16% for the quarter, due mainly to the 
contribution of the Stardale solar farm (which began commercial operations in 
May 2012), additional capacity of the Gros-Morne wind farm (which began 
commercial operations in November 2012), and the acquisition of the Brown Lake 
and Miller Creek hydroelectric facilities (which closed in October 2012). 
Adjusted EBITDA increased by 15%, mainly as a result of higher operating 
revenues.

For the second quarter of 2013, the Corporation recorded net earnings of 
$31.0million, compared to net loss of $11.9million in the corresponding 
quarter last year, due to an increase in Adjusted EBITDA and to an unrealized 
net gain on derivative financial instruments of $27.3million (unrealized net 
loss of $27.1million in 2012). Net earnings for the quarter also include a 
net realized loss on derivative financial instruments of $3.3million 
resulting from the settlement of the Northwest Stave River bond forward 
contracts upon closing of the long-term financing for this project. This loss 
is compensated by the low fixed interest rate on the loan for its 40-year 
term. Excluding the realized net loss and the unrealized net gain on 
derivative financial instruments (unrealized net loss in 2012), as well as the 
related income taxes, the net earnings for the quarter would have been 
$13.2million (compared to net earnings of $8.2million in 2012). This 
increase is due mainly to the increase in Adjusted EBITDA during the quarter.

Six-month results

For the six-month period ended June 30, 2013, electricity production reached 
1,178.7GWh, or 96% of the long-term average, compared to 93% in the 
corresponding period last year. Water flows were below average in British 
Columbia and in the United States and better-than-average in Quebec and 
Ontario during the first quarter, and were above-average in all geographic 
markets, especially Ontario and the United States, during the second quarter. 
Wind conditions have been slightly lower than anticipated at all the wind 
farms in the first half of the year, except Carleton which had above-average 
production. The Stardale solar farm production was very close to its long-term 
average, as better-than-average production in the second quarter compensated 
for lower-than-average production in January, due to unusually large snowfalls 
followed by extreme cold weather, which slowed snow removal activities.

Operating revenues increased by 20% in the first half of the year, due mainly 
to the contribution of the Stardale solar farm (which began commercial 
operations in May 2012), additional capacity of the Gros-Morne wind farm 
(which began commercial operations in November 2012), and the acquisition of 
the Brown Lake and Miller Creek hydroelectric facilities (which closed in 
October 2012). Adjusted EBITDA increased by 22%, mainly as a result of higher 
operating revenues and relatively stable general and administrative expenses, 
and lower prospective project expenses.

For the first half of 2013, the Corporation recorded net earnings of $30.9 
million, compared to a net loss of $4.1 million in the corresponding period 
last year, due to an increase in Adjusted EBITDA and to an unrealized net gain 
on derivative financial instruments $31.2million (unrealized net loss of 
$7.0million in 2012). Net earnings for the six-month period also include a 
net realized loss on derivative financial instruments of $3.3million 
resulting from the settlement of the Northwest Stave bond forward contracts 
upon closing of the long-term financing for this project. This loss is 
compensated by the low fixed interest rate on the loan for its 40-year term. 
Excluding the realized net loss and the unrealized net gain on derivative 
financial instruments (unrealized net loss in 2012), as well as the related 
income taxes, the net earnings for the six-month period ended June30, 2013 
would have been $10.2million (compared to net earnings of $1.1million in 
2012). This increase is due mainly to the increase in Adjusted EBITDA during 
the period.

Cash flows from operating activities

For the six-month period ended June30, 2013, cash flows generated by 
operating activities totalled $48.0 million ($32.0million in 2012). This 
increase is due primarily to a $13.8million increase in Adjusted EBITDA and 
a positive net variation of $3.6million in non-cash operating working 
capital items.

DEVELOPMENT PROJECTS

Kwoiek Creek hydroelectric facility
The construction of this hydroelectric facility began in the last quarter of 
2011. Currently, installation of the turbines and generators, and installation 
of electrical equipment in the plant sub-station have been completed; 
construction of the transmission line is nearly complete; and construction of 
the intake, installation of the penstock, and cabling of the powerhouse are 
all ongoing. Construction of this 49.9 MW facility is progressing as scheduled 
and budgeted and is expected to be completed in the last quarter of 2013.

Northwest Stave River hydroelectric facility
The construction of this hydroelectric facility began in the last quarter of 
2011. Currently, the powerhouse, penstock and transmission line are nearing 
completion and the intake civil and hydromechanical installations are well 
underway to be completed by the fall. The powerhouse superstructure is 
complete and the turbine and generating equipment is being installed. 
Construction of this 17.5 MW facility is progressing as scheduled and budgeted 
and is expected to be completed in the last quarter of 2013.

Viger-Denonville wind farm
The construction of this wind farm began in the first quarter of 2013. Current 
activities include road construction and concrete pouring of the turbine 
foundations, preparation of access roads for the delivery of turbines, 
excavation for the collector system, and installation of substation equipment. 
Construction of this 24.6 MW facility is progressing as scheduled and budgeted 
and is expected to be completed in the last quarter of 2013.

Boulder Creek, North Creek, and Upper Lillooet hydroelectric facilities 
The Boulder Creek and Upper Lillooet projects have both received their Crown 
land tenure and water licence from the provincial government. The Corporation 
expects that towards the end of the summer it will have received all the 
necessary permits for these projects, at which time it will be able to begin 
construction activities. In addition, discussions are ongoing with BC Hydro to 
obtain its consent to amend the PPAs to increase the installed capacity of the 
Boulder Creek and Upper Lillooet projects and to cancel the North Creek 
project. Construction of the 25.3 MW Boulder Creek facility is expected to 
start in 2013 and the project is expected to reach commercial operation in 
2015. Construction of the 81.4MW Upper Lillooet facility is expected to 
start in 2013 and the project is expected to reach commercial operation in 
2016.

Tretheway Creek hydroelectric facility
The project has received its land tenure and its water licencefrom the 
provincial government.The remaining permits are in the process of being 
obtained. The Corporation continuestooptimize the design of the project 
and to discuss pricing and cost-saving options with civil works contractors, 
turbine and generator suppliers and transmission line contractors. The 
Corporation has requested BC Hydro's consent to increase the installed 
capacity. Construction on this 23.2MW facility is planned to start in 2013 
and the project is expected to reach commercial operation in 2015.

Big Silver Creek hydroelectric facility
The project has received its land tenure and its water licencefrom the 
provincial government.The remaining permits are in the process of being 
obtained. The Corporation continuestooptimize the design of the project 
and to discuss pricing and cost-saving options with civil works contractors, 
turbine and generator suppliers and transmission line contractors. 
Construction on this 40.6MW facility is planned to start in 2013 and the 
project is expected to reach commercial operation in 2016.

Mesgi'g Ugju's'n ("MU") wind farm
On May 10, 2013, as part of an announcement for the procurement of 800 MW of 
new wind energy, the Quebec government allocated 150 MW for a new wind energy 
project to the Mi'gmaq communities of Quebec, with whom Innergex has a 
partnership. The partners will share in the distributions from the project in 
varying proportions, based in part on their initial equity investment. 
Initially, the Corporation expects to fund a majority of the equity investment 
required for this project; as a result, it expects to receive approximately 
75% of the project's cash flows during the first year. However, during the 
first 15years, the Corporation's partner will have the right to gradually 
increase its equity investment in the project up to 65% (by purchasing 
portions of the Corporation's equity at a price based on the present value of 
future cash flows using a predetermined rate of return) and therefore receive 
a higher proportion of cash flows. In any event, starting in the 16(th) year, 
the Corporation will receive no less than 35% and no more than 40% of the 
project's annual cash flows for the remaining life of the project. Currently, 
the partners are in the process of negotiating the terms of a long-term power 
purchase agreement with Hydro-Québec Distribution. They expect to sign this 
PPA shortly. The environmental assessment for the project has already been 
completed and has been submitted to the Ministry of Sustainable Development, 
Environment, Wildlife and Parks. The partners expect to start construction on 
this project in 2015. The timing for the beginning of commercial operation is 
expected to be in 2016 or 2017.

SUBSEQUENT EVENTS

Closing of the Magpie hydroelectric facility acquisition
On July 25, 2013 the Corporation completed the previously announced 
acquisition of the Magpie facility located in Quebec from the Hydromega Group 
of Companies. Magpie is a 40.6MW run-of-river hydroelectric facility located 
on Crown lands in the Minganie Regional County Municipality in Northeastern 
Quebec. This facility began commercial operations in 2007 and all of the 
electricity it produces is sold to Hydro-Québec under a 25-year fixed-price 
power purchase agreement, which provides for an annual increase to the selling 
price of 1%. Magpie has an average annual production of approximately 
185,000MWh and is expected to generate annualized revenues of approximately 
$10.6million in 2013 (including payments received under the ecoENERGY 
program) and Adjusted EBITDA of approximately $8.2million. The Corporation 
has paid the final purchase price of $28.6 million in cash and assumes 
project-level debt totalling $55.4million, which includes $50.4 million in 
non-recourse financing with a blended fixed interest rate of 6.35%.

Closing of the Viger-Denonville wind project financing
On August 7, 2013, Parc éolien communautaire Viger-Denonville, s.e.c. 
("Viger-Denonville, L.P.") closed a $61.7million non-recourse construction 
and term project financing for the Viger-Denonville wind energy project, 
located in Quebec. The $61.7million construction loan will carry a fixed 
interest rate of 6.0% (through the use of swaps) starting on December31, 
2013; following the start of the project's commercial operation, it will 
convert into an 18-year term loan. Viger-Denonville, L.P. has also closed a 
short-term loan of $5.5million carrying a floating interest rate, to finance 
the construction of the substation and collector system, for which it is 
entitled to be reimbursed by Hydro-Québec in 2014. These loans have been 
arranged by KfW IPEX-Bank GmbH as agent and lender. The proceeds of the 
financing will be used to fund just over 80% of the total project costs. 
Concurrent with the closing of the financing, Viger-Denonville, L.P. has 
settled the bond forward contracts used to hedge the interest rate on the debt 
and therefore protect the expected returns on the project, giving rise to a 
realized gain on derivative financial instruments of $2.2 million; this is 
equivalent to a fixed interest rate of approximately 5.5% on the loan.

Changes to the Dividend Reinvestment Plan (DRIP)
In view of current market conditions, the Corporation has elected to eliminate 
the 2.5% discount applicable to the purchase price of shares issued to 
shareholders participating in the DRIP. Therefore, shares purchased under the 
DRIP will continue to be issued from treasury, and the price will be the 
weighted-average trading price of the common shares on the Toronto Stock 
Exchange during the five (5) business days immediately preceding the dividend 
payment date. This change came into effect on August 8, 2013. Any decision by 
the Corporation to change either the purchase method for the shares or the 
discount granted on the purchase price of shares issued from treasury will be 
communicated by press release.

In addition, during the second quarter the Corporation amended the terms of 
its DRIP to remove the provision whereby under certain circumstances, the 
Corporation could choose to limit the amount of new equity made available 
under the plan for a given dividend payment, and make the dividend payment in 
cash instead. This change came into effect on May 23, 2013.

DIVIDEND DECLARATION

Dividends to preferred shareholders
On August8, 2013, the Corporation declared a dividend of $0.3125 per Series 
A preferred share payable on October15, 2013, to Series A preferred 
shareholders of record at the close of business on September30, 2013.

On August8, 2013, the Corporation declared a dividend of $0.359375 per 
Series C preferred share payable on October15, 2013, to Series C preferred 
shareholders of record at the close of business on September30, 2013.

Dividends to common shareholders
On August8, 2013, the Corporation declared a dividend of $0.145 per common 
share payable on October15, 2013, to common shareholders of record at the 
close of business on September30, 2013.

CONFERENCE CALL AND WEBCAST

The Corporation will hold a conference call and webcast tomorrow, Friday 
August 9, 2013 at 10:00 a.m. EDT. The second quarter results and a mid-year 
review will be presented by Mr. Michel Letellier, President and Chief 
Executive Officer of Innergex and by Mr.JeanTrudel, Chief Investment 
Officer and Senior Vice President - Communications. Investors and financial 
analysts are invited to access the conference call by dialing 647427-7450 or 
1888231-8191, or to access the webcast at 
http://services.choruscall.ca/links/innergex.html, or via the Corporation's 
website at www.innergex.com. Media and the public may also access this 
conference call and webcast, on a listen-only mode. A replay of the conference 
call and webcast will be available later the same day on the Corporation's 
website.

About Innergex Renewable Energy Inc.

Innergex Renewable Energy Inc. (TSX: INE) is a leading Canadian independent 
renewable power producer. Active since 1990, 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 currently consists of: 
(i)interests in 29 operating facilities with an aggregate net installed 
capacity of 617MW (gross 1,072MW), including 23 hydroelectric operating 
facilities, five wind farms, and one solar photovoltaic farm; (ii) interests 
in eight projects under development or under construction with an aggregate 
net installed capacity of 265MW (gross 413MW), for which power purchase 
agreements have been secured; and (iii) prospective projects with an aggregate 
net capacity totaling 2,900 MW (gross 3,125MW). Innergex Renewable Energy 
Inc. is rated BBB- by S&P and BB (high) by DBRS (unsolicited rating).

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.

Non-IFRS measures disclaimer

The consolidated financial statements for the three- and six-month periods 
ended June 30, 2013 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. Adjusted EBITDA is not a measure recognized by 
IFRS and has no standardized meaning prescribed by IFRS. References in this 
news release to "Adjusted EBITDA" are to operating revenues less operating 
expenses, general and administrative expenses and prospective project 
expenses. Investors are cautioned that these non-IFRS measures should not be 
construed as an alternative to net earnings as determined in accordance with 
IFRS.

Forward-looking information disclaimer

In order to inform shareholders and potential investors about the 
Corporation's future prospects, 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 "about", "approximate", "potential", "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. Such Forward-Looking Information includes, without limitation, 
statements with respect to the start or completion of the construction of any 
of the development projects, and closing of the acquisition of Hydromega 
assets.

The Forward-Looking Information includes forward-looking financial information 
or financial outlook, within the meaning of securities laws, such as projected 
revenues, projected construction costs, or approximate purchase price to 
inform investors and shareholders of the potential financial impact of 
recently announced acquisitions or expected results; such information may not 
be appropriate for other purposes.

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: 
execution of strategy; capital resources; derivative financial instruments; 
availability of water flows, wind regimes, and sun light; delays and cost 
over-runs in the construction and design of projects; health, safety and 
environmental risks; development of new facilities; permits; project 
performance; equipment failure; interest rate and refinancing risk; financial 
leverage and restrictive covenants; declaration of dividends is at the 
discretion of the Board; securing new power purchase agreements; senior 
management and key employees; litigation; performance of major counterparties; 
relationship with stakeholders; equipment supply; regulatory and political; 
ability to secure appropriate land; reliance on power purchase agreements; 
reliance upon transmission systems; water rental expenses; assessment of 
water, wind and sun resources; dam safety; natural disasters; force majeure; 
foreign exchange; insurance limits; credit rating may not reflect actual 
performance of the Corporation; potential undisclosed liabilities associated 
with acquisitions; integration of the facilities and projects acquired and to 
be acquired; failure to realize acquisition benefits; failure to close the 
acquisition of Hydromega hydroelectric facilities and development projects; 
shared transmission and interconnection facilities; introduction to solar 
photovoltaic power facility operation; and revenues from the Miller Creek 
facility based on the spot price of electricity. 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 this Forward-Looking Information. The Forward-Looking 
Information expressed verbally or in writing, by the Corporation or by a 
person acting on its behalf, is expressly qualified by this cautionary 
statement. The Forward-Looking Information contained herein is made as of the 
date of this news release and 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.



SOURCE  INNERGEX RENEWABLE ENERGY INC. 
Jean Trudel, MBA Chief Investment Officer and Senior Vice President - 
Communications 450 928-2550, ext. 252 jtrudel@innergex.com 
Marie-Josée Privyk, CFA, SIPC Director - Investor Relations 450 928-2550, 
ext. 222 mjprivyk@innergex.com www.innergex.com 
To view this news release in HTML formatting, please use the following URL: 
http://www.newswire.ca/en/releases/archive/August2013/08/c4741.html 
CO: INNERGEX RENEWABLE ENERGY INC.
ST: Quebec
NI: UTI ERN CONF  
-0- Aug/08/2013 18:36 GMT
 
 
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