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Innergex reports second quarter 2014 results

 PROGRESS ON SEVERAL FRONTS        --  Production increases 13% for the quarter and reaches 96% of         long-term average; increases 12% for the six-month period and         reaches 92% of long-term average     --  Revenues increase 10% to $69.6 million for the quarter and 8%         to $107.2 million for the six-month period     --  Adjusted EBITDA increases 5% to $53.8 million for the quarter         and 3% to $79.1 million for the six-month period     --  Projects under development continue to advance as planned  LONGUEUIL, QC, Aug. 7, 2014 /CNW Telbec/ - Innergex Renewable Energy Inc.  (TSX: INE) ("Innergex" or the "Corporation") releases its operating and  financial results for the second quarter ended June 30, 2014.  "We are very pleased to have completed the acquisition of the SM-1  hydroelectric facility in Quebec and to have begun construction activities at  the Big Silver Creek hydroelectric project in British Columbia. In addition,  construction activities have intensified at our three other hydroelectric  projects in BC, and preconstruction activities for the Mesgi'g Ugju's'n wind  project are progressing well", declares Michel Letellier, President and Chief  Executive Officer of the Corporation. "We are also very active in preparing  submissions to the request for proposals for 450 MW of new wind energy in  Quebec, and submissions for promoter-developer qualification in view of an  upcoming request for proposals for new wind and solar energy in Ontario", adds  Mr. Letellier.  OPERATING RESULTS     Amounts shown      are in      thousands of      Canadian      dollars      except as      noted      otherwise.         Three months ended June 30                                   Six months ended June 30     -------------                    2014        2013                   2014                               2013                    ----        ----                   ----                               ----     Power      generated      (MWh)                  898,722           792,542                               1,315,931           1,178,711     Long-term      average (MWh)          934,874           766,961                               1,433,838           1,228,490     --------------          -------           -------                               ---------           ---------     Revenues                 69,649            63,167                                 107,248              98,855     Adjusted      EBITDA(1)               53,817            51,260                                  79,146              76,663     ----------               ------            ------                                  ------              ------     Net (loss)      earnings              (14,189)           31,039                                (52,294)             30,861     Net (loss)      earnings, $      per share(2)            (0.10)             0.28                                  (0.40)               0.29     -------------             -----              ----                                   -----                ----                                                            Trailing 12-months ended June 30                                                                                        2014                2013                                                                                        ----                ----     Free Cash      Flow(1)                                                                         48,347              56,803     Payout      Ratio(1)                                                                         118 %               96 %     =========                                                                          ====                 ===          (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.  Electricity Production  During the three-month period ended June 30, 2014, the Corporation's  facilities produced 899 GWh of electricity or 96% of the long-term average  (LTA) of 935 GWh. Overall, the hydroelectric facilities produced 98% of their  LTA, as water flows were above-average in Quebec and the United States,  below-average in Ontario and only slightly below average in British Columbia.  Overall, the wind farms produced 82% of their LTA, due to below-average wind  regimes. The Stardale solar farm produced 113% of its LTA, due to  above-average solar regimes.  During the six-month period ended June 30, 2014, the Corporation's facilities  produced 1,316 GWh of electricity or 92% of the LTA of 1,434 GWh. Overall, the  hydroelectric facilities produced 90% of their LTA, due mainly to  below-average water flows during the first quarter, especially in British  Columbia. Overall, the wind farms produced 95% of their LTA, due mainly to  below-average wind regimes during the second quarter, which more than offset  above-average wind regimes during the first quarter. The Stardale solar farm  produced 109% of its LTA, due mainly to above-average solar regimes during the  second quarter.  Production increases of 13% and 12% for the three- and six-month periods ended  June 30, 2014 respectively, compared with the same periods last year, are  attributable mainly to the addition of the Magpie hydroelectric facility  acquired in July 2013 and the addition of the Kwoiek Creek and Northwest Stave  River hydroelectric facilities commissioned at the end of 2013.The SM-1  hydroelectric facility acquired in June 2014 contributed only marginally to  operating results during the second quarter.  Revenues  For the three-month period ended June 30, 2014, the Corporation recorded  revenues of $69.6 million, compared with $63.2 million in 2013, corresponding  to a 10% increase. For the six-month period ended June 30, 2014, the  Corporation recorded revenues of $107.2 million, compared with $98.9 million  in 2013, corresponding to an 8% increase. For both the three- and six-month  periods, the increase in revenues is attributable mainly to the increase in  production. Furthermore, the smaller increase in revenues 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 three-month period ended June 30, 2014, the Corporation recorded  Adjusted EBITDA of $53.8 million, compared with $51.3 million in 2013,  corresponding to a 5% increase. For the six-month period ended June 30, 2014,  the Corporation recorded Adjusted EBITDA of $79.1 million, compared with $76.7  million in 2013, corresponding to a 3% increase. When compared with the  increases in production and revenues described above, the smaller increase in  Adjusted EBITDA for the three- and six-month periods is attributable to the  higher operating, general and administrative and prospective project expenses,  which are not directly correlated to production levels.  Net Loss  Excluding the unrealized net loss or gain and the realized loss on derivative  financial instruments and the related income taxes, net earnings for the  three-month period ended June 30, 2014 would have been $8.5 million, compared  with net earnings of $11.3 million in 2013, and the net loss for the six-month  period ended June 30, 2014  would have been $2.8 million, compared with net  earnings of $8.3 million in 2013, due mainly to production below the LTA, to  higher operating, general and administrative and prospective project expenses,  and to higher finance costs 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.  For the quarter ended June 30, 2014, the Corporation recorded a net loss of  $14.2 million (basic and diluted net loss of $0.10 per share), compared with  net earnings of $31.0 million (basic and diluted net earnings of $0.28 per  share) in 2013. For the six-month period ended June 30, 2014, the Corporation  recorded a net loss of $52.3 million (basic and diluted net loss of $0.40 per  share) in 2013, compared with a net earnings of $30.9 million (basic and  diluted net earnings of $0.29 per share) for the same period last year. For  both the three- and six-month periods, the variation is attributable to the  reasons mentioned above and to an unrealized net loss on derivative financial  instruments of $29.1 million and $65.2 million respectively, resulting from a  decrease in benchmark interest rates during these periods, compared with an  unrealized net gain on derivative financial instruments of $27.3 million and  $31.2 million respectively, resulting from an increase in benchmark interest  rates for the same periods last year.  Free Cash Flow and Payout Ratio  For the trailing 12-month period ended June 30, 2014, the Corporation  generated Free Cash Flow of $48.3 million, compared with $56.8 million for the  same period last year. This decrease is due mainly to the greater scheduled  debt principal payments, and to lower cash flows from operating activities,  before changes in non-cash operating working capital items and realized losses  on derivative financial instruments, attributable mainly to production being  below the long-term average over a longer period during the trailing 12-month  period ended June 30, 2014, compared with the same period last year.  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 June 30, 2014,  dividends declared represented 118% of Free Cash Flow, compared with 96% 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 and the issuance of  4,027,051 common shares to pay for the acquisition of the SM-1 hydroelectric  facility.  DEVELOPMENT PROJECTS  Tretheway Creek hydroelectric project  The construction of this hydroelectric facility began in October 2013.  Construction of the overflow weir and diversion channel is completed;  excavation for the powerhouse and switchyard is also completed; installation  of the penstock, pouring of the concrete for the powerhouse foundation and  design and procurement of electrical equipment are ongoing.  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. The construction camp is now operational;  most of the clearing work has been completed for both sites; construction of a  new 4 km road and bridge has been completed and construction of a 3.6 km  access road to the Boulder Creek intake is almost complete. Excavation is  progressing for the Upper Lillooet River intake diversion channel, tunnel and  powerhouse and for the Boulder Creek tunnel. Clearing for the joint  transmission line and pole installation are ongoing, in preparation for  providing temporary power to the construction site by the fall.  Big Silver Creek hydroelectric project  Construction of this hydroelectric facility began in June, upon receipt of the  Leave to Commence Construction.  Clearing for the intake, penstock and  powerhouse is completed, construction of a permanent intake access bridge is  completed, and excavation for the powerhouse, intake and penstock is underway.  Mesgi'g Ugju's'n ("MU") wind project  Negotiations with potential turbine suppliers are ongoing and a selection  should be made by the fall. Since there has been no request for a public  hearing pursuant to the province's environmental review process, there will be  no hearing and the project is expected to receive the government decree by the  fall. Preconstruction 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.  Hedging program  For each of these five development projects, a hedging program has for all  intents and purposes been completed, to fix the interest rate for each  project's financing through the use of derivative financial instruments until  closing of the project-level financing; this effectively eliminates these  projects' exposure to interest rate fluctuations.  DIVIDEND DECLARATION  The following dividends will be paid by the Corporation on October 15, 2014:             Date of       Record date       Payment date   Dividend per           Dividend per            Dividend per          announcement                                      common share             Series A                Series C                                                                                 Preferred Share         Preferred Share     ---                                                                         ---------------         ---------------       August 7, 2014 September 30, 2014 October 15, 2014              $0.1500                 $0.3125                  $0.359375      ============== ================== ================              =======                 =======                  =========  CONFERENCE CALL AND WEBCAST  The Corporation will hold a conference and webcast call tomorrow, Friday  August 8, 2014 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. 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, or to access the webcast via the Corporation's website at  www.innergex.com or at http://cnw.ca/ezA5A. 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 33 operating facilities with an aggregate net installed capacity  of 687 MW (gross 1,194 MW), including 26 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- and six-month periods  ended June 30, 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 Prospective      Projects                     Performance of counterparties, such as the                                   EPC contractors     For each development          Delays and cost overruns in the design and construction      project, the                  financing costs,      Corporation provides          which are eventually      an estimate of                adjusted for      project costs based           projected costs      on its extensive              provided by the      experience as a               engineering,      developer, directly           procurement and      related incremental           construction (EPC)      internal costs, site          contractor retained      acquisition costs and                                   of projects     The Corporation               Obtainment of permits      provides indications          as a developer.      regarding scheduling      and construction      progress for its      development projects      and indications      regarding its      Prospective Projects,      based on its      extensive experience                                   Equipment supply                                   Interest rate fluctuations and availability of financing                                   Relationships with stakeholders                                   Regulatory and political risks                                   Higher-than-expected inflation     ---                           ------------------------------  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 for building shareholder value; its  ability to raise additional capital and the state of capital markets;  liquidity risks related to derivative financial instruments; variability in  hydrology, wind regimes and solar irradiation; delays and cost overruns in the  design and construction of projects; uncertainty surrounding the development  of new facilities; variability of installation performance and related  penalties; the ability to secure new power purchase agreements or to renew  existing ones; and the ability to realize the benefits of the acquisition of  the SM-1 hydroelectric facility.  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/August2014/07/c3692.html  CO: Innergex Renewable Energy Inc. ST: Quebec NI: UTI DIV ERN CONF  
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