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1. Company Snapshot

1.a. Company Description

Innergex Renewable Energy Inc.operates as an independent renewable power producer in Canada, the United States, France, and Chile.It acquires, owns, develops, and operates hydroelectric facilities, and wind and solar farms, as well as energy storage facilities.


The company operates through three segments: Hydroelectric Power Generation, Wind Power Generation, and Solar Power Generation.As of February 23, 2022, it owned and operated 80 facilities with a net installed capacity of 3,101 megawatts, which included 40 hydroelectric facilities, 33 watersheds, 32 wind farms, and 8 solar farms; and had interests in under development and prospective projects at various stages of development.Innergex Renewable Energy Inc.


was founded in 1990 and is headquartered in Longueuil, Canada.

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1.b. Last Insights on INE

Innergex Renewable Energy Inc.'s recent earnings beat analyst expectations, with a 2,200% earnings surprise and 10.92% revenue surprise in Q4. The company delivered strong financial performance and outlined future growth strategies. A definitive agreement for acquisition by CDPQ at $13.75 per share has been signed, which may positively impact the company's future prospects.

1.c. Company Highlights

2. Innergex Renewable Energy's Earnings Report Highlights Strong Financial Performance and Growth Initiatives

Innergex Renewable Energy delivered a solid Q4 2024 performance, showcasing robust financial metrics that underscore its strategic initiatives and operational efficiency. The company reported EBITDA proportionate of $210 million for the quarter, surpassing the midpoint of its guidance. Full-year EBITDA reached $761 million, reflecting a 3% year-over-year increase. Free cash flow per share was $0.24 in Q4 and $1.06 for the year, exceeding the high end of the guidance range. These results highlight Innergex's ability to generate consistent cash flows despite macroeconomic challenges.

Publication Date: Mar -08

📋 Highlights
  • Strong Financial Performance:: The company exceeded Q4 and full-year EBITDA and free cash flow targets, with strong contributions from the Boswell Springs project and other initiatives.
  • Significant Debt and Liquidity:: Total debt of $6.6 billion was offset by $700 million in liquidity, supporting future investments and growth plans.
  • Positive 2025 Outlook:: The company expects a 13% increase in EBITDA proportionate in 2025, driven by Boswell Springs and new projects, with free cash flow per share projected to rise by 10%.
  • Strategic Growth Initiatives:: The company plans to focus on selective development, including 240 MW of projects under construction and potential RFPs in Canada, reflecting a disciplined approach to growth.
  • Strong Financial Position:: The company's balance sheet remains robust, enabling it to pursue growth opportunities and maintain financial flexibility for future investments.

Financial Performance and Operational Excellence

Innergex's financial performance in 2024 was bolstered by the successful completion of the Boswell Springs project, which contributed significantly to the company's EBITDA growth. The company's focus on operational excellence and cost management has allowed it to maintain strong margins despite inflationary pressures. Total debt stood at $6.6 billion, with liquidity of $700 million, providing a solid foundation for future growth initiatives. Innergex's ability to maintain a strong balance sheet while delivering on its project pipeline reinforces its position as a leader in the renewable energy sector.

Project Pipeline and Market Strategy

As of 2024, Innergex has added 16 new projects to its pipeline, totaling 1,900 MW, with 10 of these projects located in Canada. The company's cautious approach to tariffs and its emphasis on currency hedging and minimizing U.S. imports highlight its strategic focus on risk management and value creation.

Valuation and Financial Flexibility

Innergex's disciplined financial management and strategic focus on high-return projects position it as a reliable player in the renewable energy sector. With a strong balance sheet, a robust project pipeline, and a clear growth strategy, Innergex is well-positioned to capitalize on the global shift toward renewable energy.

3. NewsRoom

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Foss & Company Closes Solar Plus Battery Storage Tax Credit Transfer for Hawaiʻi Island Project

Sep -24

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La Caisse acquires Innergex and invests in Sizewell C nuclear project

Jul -22

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La Caisse finalizes the acquisition of Innergex and mobilizes a group of investors to support its long-term growth

Jul -21

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La Caisse Completes Acquisition of Innergex

Jul -21

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S&P Dow Jones Indices Announces Changes to the S&P/TSX Composite Index

Jul -18

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All Regulatory Approvals for the Proposed Acquisition of Innergex by La Caisse Have Been Obtained

Jul -16

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Renewable energy has leading role among Canada's Best Corporate Citizens

Jun -25

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Are Business Services Stocks Lagging GORILLA TECH GP (GRRR) This Year?

Jun -24

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (9.09%)

6. Segments

Wind

Expected Growth: 9.95%

Innergex Renewable Energy Inc.'s 9.95% wind segment growth is driven by increasing global demand for clean energy, declining wind turbine costs, and favorable government policies. Additionally, the company's strategic acquisitions, expansion into new markets, and improved operational efficiency also contribute to its growth momentum.

Hydroelectric

Expected Growth: 7.05%

Innergex Renewable Energy Inc.'s 7.05% growth in hydroelectric segment is driven by increasing demand for clean energy, government incentives for renewable power, and strategic acquisitions of existing hydroelectric facilities. Additionally, the company's focus on operational efficiency and cost reduction initiatives have contributed to the growth.

Solar

Expected Growth: 10.93%

Innergex Renewable Energy Inc.'s 10.93% growth in Solar segment is driven by increasing demand for clean energy, declining solar panel costs, and favorable government policies. Additionally, the company's strategic acquisitions, expansion into new markets, and focus on renewable energy projects have contributed to its growth.

7. Detailed Products

Hydroelectric Power

Innergex Renewable Energy Inc. generates electricity from hydroelectric power plants, harnessing the energy of moving water to produce clean and renewable energy.

Wind Power

Innergex develops and operates wind farms, converting wind energy into electricity, providing a clean and sustainable source of power.

Solar Power

Innergex designs and operates solar farms, harnessing sunlight to generate electricity, providing a clean and renewable source of energy.

Geothermal Power

Innergex explores and develops geothermal resources, generating electricity from heat from the Earth's interior, providing a reliable and clean source of power.

Energy Storage

Innergex develops and operates energy storage systems, enabling the efficient storage and dispatch of renewable energy, ensuring a stable and reliable grid.

8. Innergex Renewable Energy Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Innergex Renewable Energy Inc. is low due to the unique nature of renewable energy sources. The company's focus on hydroelectric, wind, and solar power makes it difficult for substitutes to emerge.

Bargaining Power Of Customers

The bargaining power of customers for Innergex Renewable Energy Inc. is medium. While the company has a diverse customer base, some large industrial customers may have significant bargaining power.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Innergex Renewable Energy Inc. is low. The company's focus on renewable energy sources reduces its dependence on traditional energy suppliers.

Threat Of New Entrants

The threat of new entrants for Innergex Renewable Energy Inc. is high due to the growing demand for renewable energy and decreasing costs of renewable energy technologies.

Intensity Of Rivalry

The intensity of rivalry for Innergex Renewable Energy Inc. is medium. While the company operates in a competitive industry, its diversified portfolio of renewable energy sources and long-term contracts help to mitigate the intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 85.79%
Debt Cost 5.67%
Equity Weight 14.21%
Equity Cost 5.67%
WACC 5.67%
Leverage 603.76%

11. Quality Control: Innergex Renewable Energy Inc. passed 1 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

13.74$

Current Price

13.74$

Potential

-0.00%

Expected Cash-Flows