(Montreal) Volatile weather conditions have caused Quebec renewable energy producer Innergex to lose revenue, whose dividend exceeds the money generated by its activities.
In the second quarter, electricity production reached 90% of the long-term average production (LTA), compared to 92% in the same period last year. Unfavorable winds in the United States (wind power), dry weather in British Columbia (hydroelectricity) and the underperformance of the solar sector explain the difference.
Exceptional weather conditions can influence energy production, whether wind, solar or hydroelectricity, explains the President and Chief Executive Officer, Michel Letellier, in a conference call, Wednesday, to discuss quarterly results.
The leader thus defended his strategy of diversifying the company’s portfolio through different renewable energy sources and across different geographical regions, including the United States, Canada, Chile and France.
“Diversification is the key,” he replies. I am surprised that our portfolio did not produce a better result, but I am convinced that our strategy is the right one. »
The lower-than-expected production comes at a time when management is trying to reassure investors that the company has enough cash to seize opportunities amid soaring demand for renewables.
Over the past twelve months, the dividend paid to shareholders was higher than the money generated by Innergex’s activities. The dividend represented 127% of free cash flow, compared to 82% in the same period last year.
Management estimates that with thresholds comparable to the average, excluding the activities in Chile, the ratio would have been between 75% and 80% for the last twelve months.
Mr. Letellier said in an interview on Monday that the company was about to raise nearly 400 million in cash with the sale of a stake in its portfolio in France to Crédit Agricole as well as by mortgaging certain free assets. of debts.
“We have quite a bit (cash), he said Monday. We hope that we will have a lot of success in the calls for tenders, so that will allow us to finance all the development of the sector here in North America. »
During the analyst call, the executive said the company had enough cash to avoid issuing stock, which would dilute shareholder equity. “Obviously that could change if we have a lot of success in our bidding. »
Mr. Letellier remained coy when asked to reiterate the goal of generating $1 of cash flow per share in 2025.
“We’ll get back to you in late fall to give you more predictions on that aspect. It is certain that if we do not carry out the mergers and acquisitions that we had planned, that will have consequences on the short-term achievement of our objectives. »
In the second quarter, the company generated a net profit of 24.8 million, compared to a loss of 59.5 million in the same period last year. Revenues, for their part, amounted to 269.5 million, compared to 238.5 million in the same period last year.
Innergex shares gained 14 cents, or 1.12%, to $12.62 on the Toronto Stock Exchange in the afternoon.
