Innergex reports first quarter 2014 results

DEVELOPMENT REMAINS ON TRACK 


        --  Power generated increases 8% to 417 GWh for the quarter and
            reaches 84% of long-term average
        --  Revenues increase 5% to $37.6 million and Adjusted EBITDA
            remains unchanged at $25.3 million for the quarter
        --  Projects under development continue to advance as planned

LONGUEUIL, QC, May 13, 2014 /CNW Telbec/ - Innergex Renewable Energy Inc. 
(TSX: INE) ("Innergex" or the "Corporation") releases its operating and 
financial results for the first quarter ended March 31, 2014.

"This was another busy quarter for Innergex, as we finalized the commissioning 
of two hydroelectric facilities in British Columbia, we reached agreements 
with BC Hydro regarding two projects under development, and we signed a 
20-year power purchase agreement with Hydro-Québec Distribution for a wind 
energy project", declares Michel Letellier, President and Chief Executive 
Officer of the Corporation. "While our operating results for the quarter were 
affected by abnormally low water flows in British Columbia, we remain 
completely confident in the long-term annual performance expectations of our 
hydroelectric facilities. We are also very pleased with the performance of our 
wind and solar facilities during the quarter, as we continue to benefit from 
the diversification of our portfolio of assets. We continue to focus on 
advancing our five projects under development with power purchase agreements 
and on preparing prospective projects for submission under the current request 
for proposals for new wind energy procurement in Quebec", adds Mr. Letellier.

OPERATING RESULTS
                                            Three months ended March 31  
    Amounts shown are in thousands of                                    
    Canadian dollars except as noted
    otherwise.                            2014                     2013
    Power generated (MWh)              417,209                  386,171  
    Long-term average (MWh)            498,964                  461,529  
    Revenues                            37,599                   35,688  
    Adjusted EBITDA1                    25,329                   25,403  
    Net loss                          (38,105)                    (178)  
    Net (loss) earnings, $ per share2   (0.30)                     0.01  
                                                                         
                                      Trailing 12-months ended March 31  
                                          2014                     2013  
    Free Cash Flow1                     49,790                   52,258  
    Payout Ratio1                          112 %                    101 %
    1 Please refer to the "Non-IFRS measures disclaimer" for the definition
      of Adjusted EBITDA, Free Cash Flow and Payout Ratio.
    2 Net (loss) earnings per share is calculated as net (loss) earnings
      attributable to owners of the parent, less dividends declared on
      preferred shares, divided by the weighted average number of common
      shares outstanding.
    First quarter results

During the three-month period ended March 31, 2014,  the Corporation's 
facilities produced 417 GWh of electricity, or 84% of the long-term average 
(LTA) of 499 GWh. Overall, the hydroelectric facilities produced 67% of their 
LTA, as water flows were below-average in all regions except Ontario, and 
especially in British Columbia. Overall, wind farms produced 105% of their 
LTA, due to above-average wind regimes. The Stardale solar farm produced 101% 
of its LTA. The 8% increase in production compared with the same period last 
year is attributable mainly to the addition of the Magpie hydroelectric 
facility acquired in July 2013 and to the better performance of the wind 
facilities, while the contribution from the Northwest Stave River and Kwoiek 
Creek hydroelectric facilities, commissioned at the end of 2013, was limited 
given particularly low water flows in British Columbia.

For the three-month period ended March 31, 2014, the Corporation recorded 
revenues of $37.6 million, compared with $35.7 million in 2013, corresponding 
to a 5% increase. This increase is attributable mainly to the contribution of 
the Magpie hydroelectric facility acquired in July 2013 and to the better 
performance of the wind facilities compared with the same period last year. 
Furthermore, the smaller increase in revenues than in production during the 
quarter is attributable to the lower average selling price for electricity, 
resulting mainly from the addition of the Magpie facility, for which the 
selling price is considerably lower than for most other facilities of the 
Corporation. Adjusted EBITDA for the period was unchanged at $25.3 million, 
compared with $25.4 million for the same period last year. The fact that 
Adjusted EBITDA remained unchanged while revenues increased during the quarter 
is attributable to the higher operating, general and administrative expenses, 
which increased due to the greater number of facilities in operation and are 
not directly correlated to production levels.

For the three-month period ended March 31, 2014, the Corporation recorded a 
net loss of $38.1 million (basic and diluted net loss of $0.30 per share), 
compared with a net loss of $0.2 million (basic and diluted net earnings of 
$0.01 per share) for the same period last year. This variation is due mainly 
to an unrealized net loss on derivative financial instruments of $36.0 million 
resulting from a decrease in benchmark interest rates during the three-month 
period, compared with an unrealized net gain of $3.8 million resulting from an 
increase in benchmark interest rates during the same period last year. 
Excluding the unrealized net loss or gain on derivative financial instruments 
and the related income taxes, the net loss for the three-month period ended 
March 31, 2014 would have been $10.5 million, compared with a net loss of $3.1 
million in 2013, due mainly to the reasons mentioned above and to higher 
interest expenses, attributable to the expensing of interest on the Kwoiek 
Creek and Northwest Stave River loans now that the facilities are in operation 
and to the addition of project-level debt related to the Magpie acquisition in 
July 2013.

Free Cash Flow and Payout Ratio

For the trailing 12-month period ended March 31, 2014, the Corporation 
generated Free Cash Flow of $49.8 million, compared with $52.3 million for the 
same period last year. This decrease is due mainly to the greater scheduled 
debt principal payments, as cash flows from operating activities, before 
changes in non-cash operating working capital items and adjusted for realized 
losses on derivative financial instruments, remained relatively unchanged. 
This is attributable mainly to production being below the long-term average 
over a longer period during the trailing 12-month period ended March 31, 2014, 
compared with the same period last year, especially in the hydroelectric 
generation segment.

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 trailing 12-month period ended March 31, 2014, 
dividends declared represented 112% of Free Cash Flow, compared with 101% for 
the same period last year. The negative variation is due mainly to the 
decrease in Free Cash Flow explained above as well as to the increase in 
dividends declared on common shares resulting from the higher number of shares 
outstanding by virtue of the Dividend Reinvestment Plan.

DEVELOPMENT PROJECTS

Tretheway Creek hydroelectric project

The construction of this hydroelectric facility began in October 2013. 
Clearing and bulk excavation for the intake, powerhouse and penstock are 
nearing completion. Intake concrete placement at the intake area and penstock 
delivery and installation at the site have begun. Excavation and rock support 
at the powerhouse continue as planned. In January 2014, the Corporation for 
all intents and purposes completed 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; this effectively 
eliminates the project's exposure to interest rate fluctuations.

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

The construction of the Upper Lillooet River and Boulder Creek hydroelectric 
facilities began in October 2013. As planned, construction activities had been 
halted for the winter period and resumed in March 2014. Clearing for the joint 
transmission line and access road is ongoing and site preparation is underway. 
Clearing and excavation for the intake, powerhouse and tunnel are expected to 
start in May. In January 2014, the Corporation for all intents and purposes 
completed a hedging program to fix the interest rate for these projects' 
financing through the use of derivative financial instruments until it closes 
the project-level financing; this effectively eliminates the projects' 
exposure to interest rate fluctuations. In March 2014, the Corporation 
announced it had reached agreements with BC Hydro regarding the Upper Lillooet 
Hydro Project, pursuant to which the higher installed capacities of the Upper 
Lillooet River and Boulder Creek projects were confirmed and the North Creek 
project was cancelled; these changes had been requested by the Corporation in 
early 2013. Also pursuant to these agreements, the commercial operation date 
for the Boulder Creek project will be no earlier than July 1, 2016.

Silver Creek hydroelectric project

The remaining permits to begin construction are in the process of being 
obtained and present no technical obstacles. The construction of the temporary 
camp commenced in early May 2014, with construction of the civil works planned 
to commence in June 2014. The turbine and generator supplier is continuing 
with design, and the civil contractor is commencing detailed design of the 
project components. In January 2014, the Corporation for all intents and 
purposes completed 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; this effectively eliminates the 
project's exposure to interest rate fluctuations.

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

In March 2014, the Corporation and its Mi'gmaq partner signed a 20-year 
fixed-price power purchase agreement (PPA) with Hydro-Québec Distribution. 
Rather than a selling price of $0.089 per kWh in 2014 dollars with an annual 
adjustment based on 100% of the Consumer Price Index until the end of the PPA, 
the Corporation opted for the equivalent in the form of a selling price of 
$0.1012 per kWh in 2014 dollars with an annual adjustment based on 100% of the 
Consumer Price Index through the end of 2016 and on 20% thereafter until the 
end of the PPA; it therefore respects the maximum of $0.09 per kWh established 
by the Government of Quebec under its ongoing request for proposals for 450 MW 
of new wind energy capacity. Furthermore, since there has been no request for 
a public hearing pursuant to the province's environmental review process, 
there will be no hearings for this project. Negotiations with potential 
turbine suppliers are ongoing. Pre-construction activities are expected to 
start in late 2014, construction is expected to start in 2015 and commercial 
operation is expected to begin at the end of 2016. In April 2014, the partners 
for all intents and purposes completed a hedging program to fix the interest 
rate for this project's financing through the use of derivative financial 
instruments until they close the project-level financing; this effectively 
eliminates the project's exposure to interest rate fluctuations.

SUBSEQUENT EVENTS

Discount of 2.5% granted on the purchase price of shares issued under the 
Dividend Reinvestment Plan (DRIP)

On May 13, 2014, the Corporation elected to grant a discount of 2.5% on the 
purchase price of shares issued to shareholders participating in the DRIP. 
Consequently, starting with the next dividend payment on July 15, 2014 to 
shareholders of record on June 30, 2014, 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, less the discount of 2.5%.

DIVIDEND DECLARATION

Dividends to preferred shareholders

On May 13, 2014, the Corporation declared a dividend of $0.3125 per Series A 
preferred share payable on July 15, 2014, to Series A preferred shareholders 
of record at the close of business on June 30, 2014.

On May 13, 2014, the Corporation declared a dividend of $0.359375 per Series C 
preferred share payable on July 15, 2014, to Series C preferred shareholders 
of record at the close of business on June 30, 2014.

Dividend to common shareholders

On May 13, 2014, the Corporation declared a dividend of $0.15 per common share 
payable on July 15, 2014, to common shareholders of record at the close of 
business on June 30, 2014.

CONFERENCE CALL REMINDER

The Corporation will hold a conference call tomorrow, Wednesday May 14, 2014 
at 10:00 a.m. EDT. The first quarter results 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. Media and the public may also access 
this conference call on a listen-only mode. A replay of the conference call 
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 disclaimer

The consolidated financial statements for the three-month period ended March 
31, 2014 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, plus cash 
receipts by the Harrison Hydro L.P. for the wheeling services to be provided 
to other facilities owned by the Corporation over the course of their PPA, 
plus or minus other elements such as transaction costs related to realized 
acquisitions (which are financed at the time of the acquisition) and realized 
losses or gains on derivative financial instruments used to hedge the interest 
rate on project-level debt. 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 disclaimer

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 key 
expectations and 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
    obtainment of permits, start of
    construction,
    work conducted and start of
    commercial operation for
    Development Projects or             Performance of counterparties, such
    Prospective Projects                as the
                                        EPC contractors
    For each development project, the
    Corporation provides an estimate of Delays and cost overruns in the
    project costs                       design and
    based on its extensive experience   construction of projects
    as a developer, directly related
    incremental internal                Obtainment of permits
    costs, site acquisition costs and
    financing costs, which are          Equipment supply
    eventually adjusted for             Interest rate fluctuations and
    projected costs provided by the     availability of
    engineering, procurement and        financing
    construction (EPC)
    contractor retained for the         Relationships with stakeholders
    project.
                                        Regulatory and political risks
    The Corporation provides
    indications regarding scheduling    Higher-than-expected inflation
    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 
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CO: Innergex Renewable Energy Inc.
ST: Quebec
NI: UTI ERN DIV  
-0- May/13/2014 17:37 GMT
 
 
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