First Quarter Financial Results
The Company also announced today financial results for the first quarter ended
“In the first quarter, we continued our efforts to simplify the business and transition towards a pure-play regulated strategy, which included successfully winding down our international non-regulated development activities and our North American development joint venture,” said
- First Quarter Net Utility Sales and Net Energy Sales1 of
$519.9 million , an increase of 6%; - First Quarter Adjusted EBITDA1 of
$344.3 million , an increase of 1%; - First Quarter Adjusted Net Earnings1 of
$95.6 million , a decrease of 20%; and - First Quarter Adjusted Net Earnings1 per common share of
$0.14 , a decrease of 18%, in each case on a year-over-year basis.
All amounts in |
Three months ended |
||
2024 |
2023 |
Change |
|
Revenue |
$ 737.1 |
$ 778.6 |
(5) % |
Regulated Services Group Revenue |
636.6 |
688.2 |
(7) % |
Renewable Energy Group Revenue |
100.1 |
90.1 |
11 % |
Net earnings (loss) attributable to shareholders |
(89.1) |
270.1 |
(133) % |
Per common share |
(0.13) |
0.39 |
(133) % |
Cash provided by operating activities |
130.7 |
34.2 |
282 % |
Adjusted Net Earnings1 |
95.6 |
119.9 |
(20) % |
Per common share |
0.14 |
0.17 |
(18) % |
Adjusted EBITDA1 |
344.3 |
341.0 |
1 % |
Regulated Services Group Divisional Operating Profit1 |
257.0 |
245.7 |
5 % |
Renewable Energy Group Divisional Operating Profit1 |
86.3 |
95.2 |
(9) % |
Adjusted Funds from Operations1 |
189.2 |
208.1 |
(9) % |
Dividends per common share |
0.1085 |
0.1085 |
— |
Long-term Debt |
9,089.7 |
7,849.0 |
16 % |
1 |
Please refer to “Non-GAAP Measures” below for further details. |
First Quarter 2024 Highlights
- Regulated Divisional Operating Profit growth from new rate implementations and recovery of investments –
The Regulated Services Group recorded year-over-year growth in Divisional Operating Profit of 5% (see “Non-GAAP Measures” below). This increase is primarily due to the implementation of new rates and recovery of investments made at the CalPeco, Empire Oklahoma, and Granite State Electric Systems, as well as improved wind production atEmpire Electric . - Update of new renewable energy facilities within the
Renewable Energy Group – During the first quarter, the Company purchased the remaining 50% equity interest in the Sandy Ridge II Wind Facility. - Over
$2.3 billion of financing transactions closed, including successful remarketing of senior notes, underpins investor confidence in AQN – The first quarter of 2024 was busy on the financing front for AQN. Successful initiatives included:- Issuance of approximately
$850.0 million of Senior Notes – OnJanuary 12, 2024 ,Liberty Utilities Co. completed an offering of$850.0 million of senior notes. Net proceeds of the offering were used to repay indebtedness. - Issuance of approximately
$305.5 million of Securitized Utility Tariff Bonds – OnJanuary 30, 2024 ,Empire District Bondco, LLC completed an offering of approximately$305.5 million of securitized utility tariff bonds to recover previously incurred qualified extraordinary costs associated with theFebruary 2021 extreme winter storm conditions experienced inTexas and parts of the centralU.S. and energy transition costs related to the retirement of the Asbury generating plant. - Remarketing of 1.18% Senior Notes due 2026 – On
March 28, 2024 , the Company successfully remarketed its$1,150.0 million of previously-issued senior notes related to its green equity units. The proceeds from the remarketing were used, as an interim step prior to settlement of the purchase contracts issued as a component of the green equity units, to purchase a portfolio of treasury securities maturing onJune 13, 2024 , and funds generated upon maturity of the treasury portfolio are expected to be used onJune 17, 2024 to settle the purchase contracts.
- Issuance of approximately
- Progress on business simplification strategy – During the first quarter, the Company continued to execute on its previously-stated goal of simplifying the overall business. These initiatives included purchasing the 50% interest previously owned by Ares in
Liberty Development Energy Solutions B.V. andLiberty Development JV Inc. , which the Company had used as its non-regulated development platform, selling its interest in three development solar assets inSpain toAtlantica Sustainable Infrastructure plc , and selling its 100% equity interest in the 74.9 MW thermal facility inWindsor Locks, Connecticut . - Quarterly Adjusted Net Earnings per share growth offset by simplification and growth funding – For the quarter, the Company’s Adjusted Net Earnings per share were down
$0.03 year over year, with growth in the Company’s regulated business offset by the winding down of the Company’s development joint venture, increased interest expense to support growth, and a resumption of tax credit recoveries to a more normalized run rate versus the same period in the prior year (see “Non-GAAP Measures” below).
AQN’s unaudited interim consolidated financial statements for the three months ended
Earnings Conference Call
AQN will hold an earnings conference call at
Date: |
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Time: |
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Conference Call: |
Toll Free Dial-In Number |
1 (800) 715-9871 |
Toll Dial-In Number |
1 (647) 932-3411 |
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Conference ID |
2875788 |
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Webcast: |
https://edge.media-server.com/mmc/p/obfgqcep |
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Presentation also available at: www.algonquinpower.com |
About
Visit AQN at www.algonquinpower.com and follow us on Twitter @AQN_Utilities.
Caution Regarding Forward-Looking Information
Certain statements included in this news release constitute ”forward-looking information” within the meaning of applicable securities laws in each of the provinces and territories of
Non-GAAP Measures
AQN uses a number of financial measures to assess the performance of its business lines. Some measures are calculated in accordance with generally accepted accounting principles in
The terms “Adjusted Net Earnings”, “Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization” (or “Adjusted EBITDA”), “Adjusted Funds from Operations”, “Divisional Operating Profit”, “Net Utility Sales” and “Net Energy Sales”, which are used in this news release, are non-GAAP financial measures. An explanation of each of these non-GAAP financial measures can be found in the section titled “Caution Concerning Non-GAAP Measures” in the Interim MD&A, which section is incorporated by reference into this news release, and a reconciliation to the most directly comparable
Reconciliation of Adjusted EBITDA to Net Earnings
The following table is derived from and should be read in conjunction with the consolidated statement of operations. This supplementary disclosure is intended to more fully explain disclosures related to Adjusted EBITDA and provides additional information related to the operating performance of AQN. Investors are cautioned that this measure should not be construed as an alternative to
Three months ended |
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|
||||
(all dollar amounts in $ millions) |
2024 |
2023 |
||
Net earnings (loss) attributable to shareholders |
$ (89.1) |
$ 270.1 |
||
Add (deduct): |
||||
Net earnings attributable to the non-controlling interest, exclusive of HLBV |
9.4 |
14.4 |
||
Income tax expense (recovery) |
(11.3) |
24.7 |
||
Interest expense |
102.5 |
81.9 |
||
Other net losses1 |
10.6 |
3.5 |
||
Unrealized loss on energy derivatives included in revenue |
10.7 |
— |
||
HLBV prior period adjustment within equity income |
8.5 |
— |
||
Pension and post-employment non-service costs |
3.4 |
5.0 |
||
Change in value of investments carried at fair value2 |
158.3 |
(179.4) |
||
Gain on derivative financial instruments |
(0.1) |
(2.2) |
||
Loss on foreign exchange |
11.9 |
1.4 |
||
Depreciation and amortization |
129.5 |
121.6 |
||
Adjusted EBITDA |
$ 344.3 |
$ 341.0 |
1 |
See Note 16 in the unaudited interim condensed consolidated financial statements. |
2 |
See Note 6 in the unaudited interim condensed consolidated financial statements. |
Reconciliation of Adjusted Net Earnings to Net Earnings
The following table is derived from and should be read in conjunction with the consolidated statement of operations. This supplementary disclosure is intended to more fully explain disclosures related to Adjusted Net Earnings and provides additional information related to the operating performance of AQN. Investors are cautioned that this measure should not be construed as an alternative to consolidated net earnings in accordance with
The following table shows the reconciliation of net earnings to Adjusted Net Earnings exclusive of these items:
Three months ended |
||||
|
||||
(all dollar amounts in $ millions except per share information) |
2024 |
2023 |
||
Net earnings (loss) attributable to shareholders |
$ (89.1) |
$ 270.1 |
||
Add (deduct): |
||||
Gain on derivative financial instruments |
(0.1) |
(2.2) |
||
Other net losses1 |
10.6 |
3.5 |
||
Loss on foreign exchange |
11.9 |
1.4 |
||
Unrealized loss on energy derivatives included in revenue |
10.7 |
— |
||
HLBV prior period adjustment within equity income |
8.5 |
— |
||
Change in value of investments carried at fair value2 |
158.3 |
(179.4) |
||
Adjustment for taxes related to above |
(15.2) |
26.5 |
||
Adjusted Net Earnings |
$ 95.6 |
$ 119.9 |
||
Adjusted Net Earnings per common share |
$ 0.14 |
$ 0.17 |
1 |
See Note 16 in the unaudited interim condensed consolidated financial statements. |
2 |
See Note 6 in the unaudited interim condensed consolidated financial statements. |
Reconciliation of Adjusted Funds from Operations to Cash Provided by Operating Activities
The following table is derived from and should be read in conjunction with the consolidated statement of operations and consolidated statement of cash flows. This supplementary disclosure is intended to more fully explain disclosures related to Adjusted Funds from Operations and provides additional information related to the operating performance of AQN. Investors are cautioned that this measure should not be construed as an alternative to cash provided by operating activities in accordance with
The following table shows the reconciliation of cash provided by operating activities to Adjusted Funds from Operations exclusive of these items:
Three months ended |
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|
||||
(all dollar amounts in $ millions) |
2024 |
2023 |
||
Cash provided by operating activities |
$ 130.7 |
$ 34.2 |
||
Add (deduct): |
||||
Changes in non-cash operating items |
54.5 |
164.8 |
||
Production based cash contributions from non-controlling interests |
4.0 |
9.1 |
||
Adjusted Funds from Operations |
$ 189.2 |
$ 208.1 |
Reconciliation of Net Utility Sales and Regulated Services Group Divisional Operating Profit to Revenue
The following table is derived from and should be read in conjunction with the consolidated statement of operations and consolidated statement of cash flows. This supplementary disclosure is intended to more fully explain disclosures related to Divisional Operating Profit and Net Utility Sales and provides additional information related to the operating performance of AQN. Investors are cautioned that these measures should not be construed as an alternative to revenue in accordance with
The following table shows the reconciliation of Net Utility Sales and Regulated Services Group Divisional Operating Profit to revenue:
Three months ended |
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|
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(all dollar amounts in $ millions) |
2024 |
2023 |
|
Revenue |
|||
Regulated electricity distribution |
$ 305.9 |
$ 316.0 |
|
Less: Regulated electricity purchased |
(97.9) |
(125.6) |
|
Net Utility Sales – electricity1 |
208.0 |
190.4 |
|
Regulated gas distribution |
234.0 |
271.1 |
|
Less: Regulated gas purchased |
(96.0) |
(137.7) |
|
Net Utility Sales – natural gas1 |
138.0 |
133.4 |
|
Regulated water reclamation and distribution |
85.0 |
87.4 |
|
Less: Regulated water purchased |
(3.9) |
(3.8) |
|
Net Utility Sales – water reclamation and distribution1 |
81.1 |
83.6 |
|
Other revenue2 |
11.7 |
13.6 |
|
Net Utility Sales1,3 |
438.8 |
421.0 |
|
Operating expenses |
(207.5) |
(196.9) |
|
Income from long-term investments |
7.9 |
10.3 |
|
HLBV4 |
17.8 |
11.3 |
|
Divisional Operating Profit1,5 |
$ 257.0 |
$ 245.7 |
1 |
See Caution Concerning Non-GAAP Measures. |
2 |
See Note 18 in the unaudited interim condensed consolidated financial statements. |
3 |
This table contains a reconciliation of Net Utility Sales to revenue. The relevant sections of the table are derived from and should be read in conjunction with the unaudited interim condensed consolidated statement of operations and Note 18 in the unaudited interim condensed consolidated financial statements, “Segmented Information”. This supplementary disclosure is intended to more fully explain disclosures related to Net Utility Sales and provides additional information related to the operating performance of the |
4 |
Hypothetical Liquidation at Book Value (“HLBV”) income represents the value of net tax attributes monetized by the |
5 |
This table contains a reconciliation of Divisional Operating Profit to revenue for the |
Reconciliation of Net Energy Sales and Renewable Energy Group Divisional Operating Profit to Revenue
The following table is derived from and should be read in conjunction with the consolidated statement of operations and consolidated statement of cash flows. This supplementary disclosure is intended to more fully explain disclosures related to Divisional Operating Profit and Net Energy Sales and provides additional information related to the operating performance of AQN. Investors are cautioned that this measure should not be construed as an alternative to cash provided by operating activities in accordance with
The following table shows the reconciliation of Net Energy Sales and Renewable Energy Group Divisional Operating Profit to revenue:
Three months ended |
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|
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(all dollar amounts in $ millions) |
2024 |
2023 |
|
Revenue1 |
|||
Hydro |
$ 9.3 |
$ 8.2 |
|
Wind |
63.7 |
56.1 |
|
Solar |
5.7 |
5.3 |
|
Thermal |
5.9 |
9.1 |
|
Total Non-Regulated Energy Sales |
$ 84.6 |
$ 78.7 |
|
Less: |
|||
Cost of Sales – Energy2 |
(0.7) |
(1.1) |
|
Cost of Sales – Thermal |
(2.8) |
(6.7) |
|
Net Energy Sales 3,4 |
$ 81.1 |
$ 70.9 |
|
Renewable Energy Credits5 |
14.1 |
9.9 |
|
Other Revenue |
1.4 |
1.5 |
|
Total Net Revenue |
$ 96.6 |
$ 82.3 |
|
Expenses & Other Income |
|||
Operating expenses |
(39.0) |
(32.7) |
|
Development costs |
(8.6) |
(4.0) |
|
Other operating costs (previously referred to as administrative costs) |
(6.0) |
(3.7) |
|
Dividend, interest, equity and other income6 |
20.5 |
29.7 |
|
HLBV income7 |
22.8 |
23.6 |
|
Divisional Operating Profit3,8,9 |
$ 86.3 |
$ 95.2 |
1 |
Many of the |
2 |
Cost of Sales – Energy consists of energy purchases in the |
3 |
See Caution Concerning Non-GAAP Measures. |
4 |
This table contains a reconciliation of Net Energy Sales to revenue. The relevant sections of the table are derived from and should be read in conjunction with the unaudited interim condensed consolidated statement of operations and Note 18 in the unaudited interim condensed consolidated financial statements, “Segmented information”. This supplementary disclosure is intended to more fully explain disclosures related to Net Energy Sales and provides additional information related to the operating performance of AQN. Investors are cautioned that Net Energy Sales should not be construed as an alternative to revenue. |
5 |
Qualifying renewable energy projects receive renewable energy credits (“RECs”) for the generation and delivery of renewable energy to the power grid. The RECs represent proof that 1 MW-hr of electricity was generated from an eligible energy source. |
6 |
Includes dividends received from Atlantica and related parties (see Notes 6 and 13 in the unaudited interim condensed consolidated financial statements) as well as the equity investment in the Stella, Cranell, East Raymond and West Raymond Wind Facilities. |
7 |
HLBV income represents the value of net tax attributes earned by the |
8 |
Certain prior year items have been reclassified to conform to current year presentation. |
9 |
This table contains a reconciliation of Divisional Operating Profit to revenue for the |
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