Innergex reports year-end 2013 results

THE COMPANY COMPLETES ANOTHER ACTIVE YEAR AND INCREASES THE DIVIDEND 


        --  Power generated increases 13% to 2,382 GWh for the year and
            reaches 95% of long-term average
        --  Revenues increase 12% to $198.3 million and Adjusted EBITDA
            increases 11% to $148.9 million for the year
        --  Fourth quarter results affected by weak hydrology in British
            Columbia
        --  Board of Directors declares a dividend increase of $0.02 to
            $0.60 per common share on an annual basis

LONGUEUIL, QC, Feb. 25, 2014 /CNW Telbec/ - Innergex Renewable Energy Inc. 
(TSX: INE) ("Innergex" or the "Corporation") releases its operating and 
financial results for the year ended December 31, 2013.

"Our year-end results reflect several achievements, including the completion 
of two hydro facilities and the beginning of construction of three hydro 
projects in British Columbia, the commissioning of a wind farm and the 
acquisition of a hydro facility in Quebec, and the negotiation of a power 
purchase agreement for a wind energy project, also in in Quebec. We are 
pleased with the contributions of these achievements and the overall 
performance of our operating facilities, despite disappointing results in the 
fourth quarter resulting mainly from very dry weather conditions in British 
Columbia", declares Michel Letellier, President and Chief Executive Officer of 
the Corporation.

"As a result of the addition of four operating facilities over the last few 
months, the Board of Directors has decided to increase the dividend 
distributed to our common shareholders by 3.4% to $0.60 on an annual basis", 
adds Mr. Letellier.

OPERATING RESULTS
                              Three months ended             Years ended
                                  December 31                December 31
    Amounts shown are in
    thousands of Canadian
    dollars except as         2013         2012        2013          2012
    noted otherwise.                  (restated)3               (restated)3
                                                                           
    Power generated (MWh)   496,613       531,564   2,381,820     2,104,945
    Long-term average (MWh) 608,787       538,835   2,502,562     2,169,182
    Revenues                 41,365        47,117     198,259       176,655
    Adjusted EBITDA1         25,565        34,247     148,916       133,792
    Net earnings (loss)       3,421         (595)      45,431       (5,383)
    Net earnings (loss), $
    per share2                 0.05        (0.00)        0.43        (0.03)
    Free Cash Flow1             N/A           N/A      58,982        43,897
    Payout Ratio1               N/A           N/A         93%          115%
    1 Please refer to the "Non-IFRS measures disclaimer" for the definition
      of Adjusted EBITDA, Free Cash Flow and Payout Ratio.
    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.
    Annual results

During the year ended December 31, 2013, the Corporation's facilities produced 
2,382 GWh of electricity, or 95% of the long-term average (LTA). Overall, 
hydroelectric facilities produced 93% of their LTA. In Ontario and Quebec, 
water flows have remained better than average at most facilities throughout 
the year. In British Columbia, above-average water flows at most facilities in 
the second and third quarter could not compensate for below-average hydrology 
in the first and fourth quarters, as this province had one of the driest years 
on record, with precipitations approximately 30% below average. Overall, wind 
farms produced 101% of their LTA, as above-average wind conditions during the 
third quarter were enough to offset the lower-than-average wind conditions 
during the first, second and fourth quarters. The Stardale solar farm produced 
103% of its LTA.

For the year ended December 31, 2013, the Corporation recorded revenues of 
$198.3 million, compared with $176.7 million in 2012, and Adjusted EBITDA of 
$148.9 million, compared with $133.8 million in 2012. These increases of 12% 
and 11% respectively are attributable mainly to the full-year contribution of 
the Stardale solar farm commissioned in May 2012 and the Brown Lake and Miller 
Creek hydroelectric facilities acquired in October 2012, the additional 
capacity at the Gros-Morne wind farm since November 2012 and the acquisition 
of the Magpie hydroelectric facility in July 2013. These contributions were 
partly offset by hydroelectricity production levels that were lower in British 
Columbia and the United States, compared with last year, resulting in fewer 
revenues available to absorb operating and general and administrative 
expenses, which are not directly correlated to production levels.

For the year ended December 31, 2013, the Corporation recorded net earnings of 
$45.4 million (basic and diluted net earnings of $0.43 per share), compared 
with a net loss of $5.4 million (basic and diluted net loss of $0.03 per 
share) in 2012. This variation is due mainly to the reasons mentioned above 
and to a higher unrealized net gain and a smaller realized net loss on 
derivative financial instruments in 2013 compared with 2012. Excluding the 
unrealized net gains and realized net losses on derivative financial 
instruments and related income taxes, net earnings for the year ended December 
31, 2013 would have been $12.6 million, compared with a net loss of $1.1 
million in 2012.

Free Cash Flow and Payout Ratio

For the year ended December 31, 2013, the Corporation generated Free Cash Flow 
of $59.0 million, compared with $43.9 million for the same period last year. 
This increase is due mainly to greater cash flows from operations resulting 
from the increase in the number of facilities in operation, partly offset by 
greater scheduled debt principal payments resulting from the start of the 
amortization period on a number of project-level debts (Rutherford Creek, 
Stardale, Montagne Sèche), as well as higher dividends paid on preferred 
shares following the issuance of Series C preferred shares in December 2012.

The Payout Ratio represents the dividends declared on common shares divided by 
Free Cash Flow. The Corporation believes it is a measure of its ability to 
sustain current dividends and dividend increases, as well as its ability to 
fund its growth. For the year ended December 31, 2013, the Corporation 
declared dividends of $0.58 per common share, the same amount as in 2012. 
These dividends represented 93% of Free Cash Flow, compared with 115% for the 
same period last year. The improvement is due mainly to the greater Free Cash 
Flow generated as explained above.

Fourth quarter results

For the three-month period ended December 31, 2013, the Corporation's 
facilities produced 497 GWh of electricity, or 82% of the LTA. Overall, 
hydroelectric facilities produced 74% of their LTA, as above-average water 
flows in Ontario and at most facilities in Quebec were not sufficient to 
compensate for below-average water flows in British Columbia and the United 
States. Production levels in British Columbia were affected by one of the 
driest years on record and also by a shutdown for capital improvements at the 
Miller Creek facility between August 8 and November 13. Overall, wind farms 
produced 95% of their LTA due to below-average wind conditions during the 
quarter, except Baie-des-Sables which experienced average wind conditions. The 
Stardale solar farm produced 100% of its LTA.

For the three-month period ended December 31, 2013, the Corporation recorded 
revenues of $41.4 million, compared with $47.1 million in 2012, and Adjusted 
EBITDA of $25.6 million, compared with $34.2 million in 2012, due mainly to 
below-average water flows in British Columbia and the United States, compared 
with above-average water flows in the same period last year, which more than 
offset the full-quarter contribution of the Brown Lake and Miller Creek 
hydroelectric facilities acquired in October 2012, the addition of capacity at 
the Gros Morne wind farm in November 2012 and the acquisition of the Magpie 
hydroelectric facility in July 2013. The greater decrease in Adjusted EBITDA 
is due mainly to the fact that operating and general and administrative 
expenses have increased as a result of the Corporation operating a greater 
number of facilities and that these expenses are not directly correlated to 
production levels.

For the three-month period ended December 31, 2013, the Corporation recorded 
net earnings of $3.4 million (basic and diluted net earnings per share of 
$0.05), compared with a net loss of $0.6 million in 2012 (basic and diluted 
net loss per share of $0.00). This improvement is due mainly to an unrealized 
net gain on derivative financial instruments of $11.7 million, compared with 
an unrealized net gain of $5.3 million in 2012, which offset the decrease in 
Adjusted EBITDA in the fourth quarter of 2013. Excluding the unrealized net 
gains on derivative financial instruments and the related income taxes, the 
Corporation would have recognized a net loss of $5.5 million for the fourth 
quarter ended December 31, 2013, compared with a net loss of $4.9 million in 
2012.

2013 HIGHLIGHTS
        --  The 24.6 MW Viger-Denonville wind farm, developed in
            partnership with the Rivière-du-Loup Regional County
            Municipality, was constructed during the year and commissioned
            on November 19.
        --  The 17.5 MW Northwest Stave River and the 49.9 MW Kwoiek Creek
            hydroelectric facilities were completed in December and were
            commissioned effective December 18, 2013 and January 1, 2014,
            respectively.
        --  Construction began at the Tretheway Creek, Upper Lillooet River
            and Boulder Creek hydroelectric projects in British Columbia.
        --  The acquisition of the 40.6 MW Magpie hydroelectric facility
            closed on July 25.
        --  In May, the Corporation's partner, the Assembly of Mi'gmaq
            Communities of Quebec, was awarded 150 MW for the Mesgi'g
            Ugju's'n wind energy project in Gaspésie, Quebec. In December,
            the partners signed a letter of intent with Hydro-Québec
            Distribution for a 20-year power purchase agreement, subject to
            an order-in-council by the Quebec government.
        --  Three project-level financings totalling $186.5 million were
            closed, including $61.7 million for the Viger-Denonville wind
            farm, $72.0 million for the Northwest Stave River hydroelectric
            facility and $52.8 million for the refinancing of the Carleton
            wind farm. The Corporation's $425.0 million revolving term
            credit facility was also extended to 2018.
        --  A $7.0 million capital improvement program was completed at the
            Miller Creek hydroelectric facility, increasing its long-term
            average production by 5%.
        --  The Corporation signed a letter of intent and a Traditional
            Knowledge Protocol Agreement with the Saik'uz First Nation
            regarding the development of a wind energy project of
            approximately 210 MW in British Columbia. This project is
            currently undergoing an Environmental Assessment.
        --  In December, the Corporation was added to the S&P/TSX Composite
            Index, as well as the S&P/TSX Composite Dividend Index, the
            S&P/TSX Equity Income Index and the S&P/TSX Composite Low
            Volatility Index.

DEVELOPMENT PROJECTS

Tretheway Creek hydroelectric project

The construction of this hydroelectric facility began in October 2013. 
Installation of the construction camp has been completed and clearing and 
excavation for the intake, powerhouse and penstock are underway. Estimated 
project costs have been adjusted from $108.5 million to $111.5 million to 
reflect inflationary pressures on construction costs in British Columbia. 
During the fourth quarter of 2013, the Corporation began a hedging program in 
order to fix the interest rate for this project's financing through the use of 
derivative financial instruments, until it closes the project-level financing. 
This hedging program was essentially completed in January 2014, effectively 
eliminating the project's exposure to interest rate fluctuations.

Upper Lillooet River, Boulder Creek and North Creek hydroelectric projects 
(the "Upper Lillooet Hydro Project")

The construction of the Upper Lillooet River and Boulder Creek hydroelectric 
facilities began in October 2013. Geotechnical investigations at Upper 
Lillooet River's powerhouse and intake have been completed and construction 
camp preparations at Boulder Creek are underway. Clearing for the joint 
transmission line is also underway. As planned, construction activities have 
been halted for the winter period; they will resume in the spring of 2014. 
Estimated project costs have been adjusted to reflect a reallocation of costs 
between the two projects. During the fourth quarter of 2013, the Corporation 
began a hedging program in order to fix the interest rate for these projects' 
financings through the use of derivative financial instruments, until it 
closes the project-level financings. This hedging program was essentially 
completed in January 2014, effectively eliminating the projects' exposure to 
interest rate fluctuations.

Big Silver Creek hydroelectric project

The project has received its land tenure and water licence from the provincial 
government. The remaining permits are in the process of being obtained and 
present no technical obstacles. The turbine and generator supplier has been 
selected. Construction for this project is expected to begin in the spring of 
2014 once a leave to commence construction is obtained. The Corporation is 
currently negotiating with civil works and transmission line contractors. In 
light of these negotiations, estimated project costs have been adjusted from 
$191.8 million to $216.0 million to reflect inflationary pressures on 
construction costs in British Columbia, namely for the power tunnel. During 
the fourth quarter of 2013, the Corporation began a hedging program in order 
to fix the interest rate for this project's financing through the use of 
derivative financial instruments, until it closes the project-level financing. 
This hedging program was essentially completed in January 2014, effectively 
eliminating the project's exposure to interest rate fluctuations.

Mesgi'g Ugju's'n ("MU") wind project

In December 2013, the Corporation and its Mi'gmaq partner signed a letter of 
intent with Hydro-Québec Distribution for a 20-year fixed-price power 
purchase agreement, which is subject to an order-in-council by the Quebec 
government. Open houses have been conducted and an information session was 
held recently as part of the province's environmental review process. 
Negotiations with potential turbine suppliers are underway. Pre-construction 
activities are expected to start in 2014, construction is expected to start in 
2015, and commercial operation is expected to begin at the end of 2016. Upon 
signing the power purchase agreement, the Corporation intends to enter into a 
hedging program to fix the interest rate for this project's financing through 
the use of derivative financial instruments, until it closes the project-level 
financing.

DIVIDEND DECLARATION

Dividends to preferred shareholders

On February 25, 2014, the Corporation declared a dividend of $0.3125 per 
Series A preferred share payable on April 15, 2014, to Series A preferred 
shareholders of record at the close of business on March 31, 2014.

On February 25, 2014, the Corporation declared a dividend of $0.359375 per 
Series C preferred share payable on April 15, 2014, to Series C preferred 
shareholders of record at the close of business on March 31, 2014.

Dividends to common shareholders

On February 25, 2014, the Corporation declared a dividend of $0.15 per common 
share payable on April 15, 2014, to common shareholders of record at the close 
of business on March 31, 2014. On an annual basis, this represents an increase 
of $0.02, to $0.60 per common share.

CONFERENCE CALL AND WEBCAST REMINDER

The Corporation will hold a conference call and webcast tomorrow, Wednesday 
February 26, 2014 at 10:00 a.m. ET. Its 2013 year-end results and 2014 
objectives will be presented by Mr. Michel Letellier, President and Chief 
Executive Officer of Innergex and by Mr. Jean Trudel, Chief Investment Officer 
and Senior Vice President - Communications. Investors and financial analysts 
are invited to access the conference call by dialing 647 427-7450 or 1 888 
231-8191, and to access the webcast at 
http://services.choruscall.ca/links/innergexend13.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 32 operating facilities with an aggregate net installed capacity 
of 672 MW (gross 1,164 MW), including 25 hydroelectric operating facilities, 
six wind farms, and one solar photovoltaic farm; (ii) interests in five 
projects under development or under construction with an aggregate net 
installed capacity of 210 MW (gross 321 MW), for which power purchase 
agreements have been secured; and (iii) prospective projects with an aggregate 
net capacity totaling 2,900 MW (gross 3,125 MW). 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 that generate sustainable cash flows and 
provide a high return on invested capital, and to distribute a stable dividend.

Non-IFRS measures

The consolidated financial statements for the year ended December 31, 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 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, Free Cash Flow 
and Payout Ratio are not measures recognized by IFRS and have no standardized 
meaning prescribed by IFRS. References in this document to "Adjusted EBITDA" 
are to revenues less operating expenses, general and administrative expenses 
and prospective project expenses. References to "Free Cash Flow" are to cash 
flows from operations 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, as well as 
adjustments that represent cash inflows and outflows that are not 
representative of the Corporation's long-term cash generating capacity, such 
as transaction costs related to realized acquisitions, realized losses or 
gains on derivative financial instruments used to hedge the interest rate on 
project-level debt, and cash receipts by non-wholly owned subsidiaries for the 
wheeling services to be provided to another subsidiary. References to "Payout 
Ratio" are to dividends declared on common shares divided by Free Cash Flow. 
Readers are cautioned that Adjusted EBITDA should not be construed as an 
alternative to net earnings and Free Cash Flow should not be construed as an 
alternative to cash flows from operating activities, as determined in 
accordance with IFRS.

Forward-looking information

In order 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 "projected", 
"potential", "expect", "will", "should", "estimate", "forecasts", "intends", 
or other comparable terminology that states that certain events will or will 
not occur. It represents the estimates and expectations of the Corporation 
relating to future results and developments as of the date of this press 
release. It includes future-oriented financial information, such as estimated 
project costs, to inform readers of the potential financial impact of 
development projects. Such information may not be appropriate for other 
purposes.

Forward-Looking Information in this press release is based on certain 
principal assumptions made by the Corporation.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
                                        
    Estimated project costs, expected    Performance of counterparties,
    obtainment of permits, start of      such as the EPC contractors
    construction, work conducted and
    start of commercial operation for    Delays and cost overruns in the
    Development Projects or              design and construction of
    Prospective Projects                 projects
    For each development project, the    Obtainment of permits
    Corporation provides an estimate
    of project costs based on its        Equipment supply
    extensive experience as a
    developer, directly related          Interest rate fluctuations and
    incremental internal costs, site     availability of financing
    acquisition costs and financing
    costs, which are eventually          Relationships with stakeholders
    adjusted for projected costs
    provided by the engineering,         Regulatory and political risks
    procurement and construction (EPC)
    contractor retained for the
    project.
    The Corporation provides
    indications regarding scheduling
    and construction progress for its
    development projects and
    indications regarding its
    Prospective Projects, based on its
    extensive experience as a
    developer.


The material risks and uncertainties that may cause actual results and 
developments to be materially different from current expressed Forward-Looking 
Information are referred to in the Corporation's Annual Information Form in 
the "Risk Factors" section and include, without limitation: the ability of the 
Corporation to execute its strategy; its ability to access sufficient capital 
resources; liquidity risks related to derivative financial instruments; 
changes in hydrology, wind regimes and solar irradiation; delays and cost 
overruns in the design and construction of projects; the ability to develop 
new facilities; variability of installation performance and related penalties; 
and the ability to secure new power purchase agreements. 
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 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 of this press release, unless so 
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/February2014/25/c7231.html 
CO: Innergex Renewable Energy Inc.
ST: British Columbia
NI: UTI CONF DIV ERN  
-0- Feb/25/2014 22:41 GMT
 
 
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