OAKVILLE, ON, Aug. 11,
2022 /CNW/ - Algonquin Power & Utilities Corp.
(TSX: AQN) (NYSE: AQN) ("AQN" or the "Company") today announced
financial results for the second quarter ended June 30, 2022. All amounts are shown in
United States dollars ("U.S. $" or
"$"), unless otherwise noted.
"We are pleased to report solid second quarter results and
continued growth across our regulated and renewables businesses,"
said Arun Banskota, President and
Chief Executive Officer of AQN. "We remain committed to the
execution of our capital plan, which we believe supports growth in
earnings and cash flows and delivery of long-term value to our
shareholders."
Q2 2022 Financial Highlights
- Revenue of $624.3 million, an
increase of 18% compared to the second quarter of 2021
- Adjusted EBITDA1 of $289.3
million, an increase of 18% compared to the second quarter
of 2021;
- Adjusted Net Earnings1 of $109.7 million, an increase of 19.6% compared to
the second quarter of 2021; and
- Adjusted Net Earnings1 per share of $0.16, an increase of 7% compared to the second
quarter of 2021.
All amounts in U.S.
$ millions except per share information
|
Three months ended
June 30
|
2022
|
2021
|
Change
|
Revenue
|
$
|
624.3
|
|
|
$
527.5
|
|
|
18 %
|
Net earnings (loss)
attributable to shareholders
|
(33.4)
|
|
|
103.2
|
|
|
(132) %
|
Per
share
|
(0.05)
|
|
|
0.16
|
|
|
(131) %
|
Cash provided by
operating activities
|
268.6
|
|
|
103.3
|
|
|
160 %
|
Adjusted Net
Earnings1
|
109.7
|
|
|
91.7
|
|
|
19.6 %
|
Per
share
|
0.16
|
|
|
0.15
|
|
|
7 %
|
Adjusted
EBITDA1
|
289.3
|
|
|
244.9
|
|
|
18 %
|
Adjusted Funds from
Operations1
|
180.3
|
|
|
161.3
|
|
|
12 %
|
Dividends per
share
|
0.1808
|
|
|
0.1706
|
|
|
6 %
|
1.
|
Please refer to
"Non-GAAP Measures" at the end of this document for further
details.
|
Corporate Highlights
- Pending Acquisition of Kentucky Power Company and AEP
Kentucky Transmission Company, Inc. – On May 4, 2022, the Kentucky Public Service
Commission ("KPSC") issued an order, including an approval of the
pending acquisition of Kentucky Power Company and AEP Kentucky
Transmission Company, Inc. (the "Kentucky Power Transaction") by
Liberty Utilities Co. ("Liberty Utilities"), an indirect,
wholly-owned subsidiary of AQN, subject to certain conditions set
forth in the order, including those agreed to by Liberty Utilities
in the course of the docket. On May 3,
2022, the KPSC issued an order that required certain changes
to the proposed operating and ownership agreements (collectively,
the "Mitchell Agreements") relating to the Mitchell coal generating
facility (in which Kentucky Power owns a 50% interest, representing
780 MW). On July 1, 2022, the Public
Service Commission of West
Virginia ("WVPSC") issued an order on the Mitchell
Agreements that is inconsistent with the KPSC's order on the
Mitchell Agreements. The closing of the Kentucky Power Transaction
is subject to the satisfaction of certain conditions precedent,
which include those relating to the approval of the Mitchell
Agreements by the KPSC, WVPSC and U.S. Federal Energy Regulatory
Commission. Liberty Utilities and AEP are in discussions to reach a
resolution regarding the conditions precedent in respect of the
Mitchell Agreements (the "Mitchell Agreements Condition"), which if
successful, could allow the Kentucky Power Transaction to close in
the second half of 2022.
- Completion of the Blue Hill Wind Facility – On
April 14, 2022, the Renewable Energy
Group achieved commercial operations ("COD") at its 175 MW Blue
Hill Wind Facility, located in southwest Saskatchewan. The energy generated from the
facility is being sold through a long-term power purchase agreement
with SaskPower. Bringing low-cost renewable generation capacity to
communities is one of the ways the Company is delivering on its
commitment to sustainability.
- Completion of Sandhill Renewable Natural Gas Acquisition
– On August 5, 2022, the
Renewable Energy Group completed its acquisition of Sandhill
Advanced Biofuels, LLC ("Sandhill"). Sandhill is a developer of
renewable natural gas ("RNG") anaerobic digestion projects located
on dairy farms with a portfolio of four projects in the state of
Wisconsin. Two of the projects
recently achieved COD, while the other two projects are in
late-stage development. Once fully constructed, the portfolio is
expected to produce RNG at a rate of approximately 500 million
British thermal units ("MMBTUs") per day. The acquisition
represents the Company's first investment in the non-regulated RNG
space.
- Moody's assigns Baa2 rating – On August 5, 2022, Moody's Investors Service
("Moody's") assigned an inaugural Baa2 long term issuer rating to
Liberty Utilities with a stable outlook. Liberty Utilities is also
rated by S&P Global Ratings and Fitch Ratings.
Additional information regarding AQN is available on its web
site at www.AlgonquinPowerandUtilities.com and in its corporate
filings on SEDAR at www.sedar.com (for Canadian filings) and EDGAR
at www.sec.gov/edgar (for U.S. filings).
Earnings Conference Call
AQN will hold an earnings conference call at 10:00 a.m. eastern time on Friday, August 12,
2022 hosted by President and Chief Executive Officer, Arun Banskota and Chief Financial Officer,
Arthur Kacprzak.
Date:
|
Friday, August 12,
2022
|
Time:
|
10:00 a.m.
ET
|
Conference
Call:
|
Toll Free Dial-In
Number
|
(888)
806-5484
|
|
Toll Dial-In
Number
|
(416)
641-6104
|
|
Event
Passcode
|
2602549#
|
Webcast:
|
https://edge.media-server.com/mmc/p/e2rpq7md
|
|
Presentation also
available at: www.algonquinpowerandutilities.com
|
About Algonquin Power & Utilities Corp. and
Liberty
Algonquin Power & Utilities Corp., parent company of
Liberty, is a diversified international generation, transmission,
and distribution utility with over $17
billion of total assets. Through its two business groups,
the Regulated Services Group and the Renewable Energy Group, AQN is
committed to providing safe, secure, reliable, cost-effective, and
sustainable energy and water solutions through its portfolio of
electric generation, transmission, and distribution utility
investments to over one million customer connections, largely in
the United States and
Canada. AQN is a global leader in renewable energy through
its portfolio of long-term contracted wind, solar, and
hydroelectric generating facilities. AQN owns, operates, and/or has
net interests in over 4 GW of installed renewable energy
capacity.
AQN is committed to delivering growth and the pursuit of
operational excellence in a sustainable manner through an expanding
global pipeline of renewable energy and electric transmission
development projects, organic growth within its rate-regulated
generation, distribution, and transmission businesses, and the
pursuit of accretive acquisitions and value enhancing recycling of
assets.
AQN's common shares, preferred shares, Series A, and preferred
shares, Series D are listed on the Toronto Stock Exchange under the
symbols AQN, AQN.PR.A, and AQN.PR.D, respectively. AQN's common
shares, Series 2018-A subordinated notes, Series 2019-A
subordinated notes and equity units are listed on the New York
Stock Exchange under the symbols AQN, AQNA, AQNB, and AQNU,
respectively.
Visit AQN at www.algonquinpowerandutilities.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
Canada and the respective
policies, regulations and rules under such laws and
''forward-looking statements'' within the meaning of the U.S.
Private Securities Litigation Reform Act of 1995 (collectively,
''forward-looking statements"). The words "will", "expects",
"believes", "plans", "could" and similar expressions are often
intended to identify forward-looking statements, although not all
forward-looking statements contain these identifying words.
Specific forward-looking statements in this news release include,
but are not limited to, statements regarding: the expected future
earnings, performance and growth of AQN; capital expenditure plans;
expectations regarding the anticipated closing of the Kentucky
Power Transaction; and the expected generating capacity of the Blue
Hill Wind Facility and the Sandhill RNG projects. These statements
are based on factors or assumptions that were applied in drawing a
conclusion or making a forecast or projection, including
assumptions based on historical trends, current conditions and
expected future developments. Since forward-looking statements
relate to future events and conditions, by their very nature they
require making assumptions and involve inherent risks and
uncertainties. AQN cautions that although it is believed that the
assumptions are reasonable in the circumstances, these risks and
uncertainties give rise to the possibility that actual results may
differ materially from the expectations set out in the
forward-looking statements. Material risk factors and assumptions
include those set out in AQN's Management Discussion & Analysis
and Annual Information Form for the year ended December 31, 2021, and in AQN's Management
Discussion & Analysis for the three months and six ended
June 30, 2022 (the "Interim
MD&A"), each of which is or will be available on SEDAR and
EDGAR. Given these risks, undue reliance should not be placed on
these forward-looking statements, which apply only as of their
dates. Other than as specifically required by law, AQN undertakes
no obligation to update any forward-looking statements to reflect
new information, subsequent or otherwise
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 United States ("U.S. GAAP"),
while other measures do not have a standardized meaning under U.S.
GAAP. These non-GAAP measures include non-GAAP financial measures
and non-GAAP ratios, each as defined in Canadian National
Instrument 52-112 – Non-GAAP and Other Financial Measures
Disclosure. AQN's method of calculating these measures may
differ from methods used by other companies and therefore may not
be comparable to similar measures presented by other companies.
The terms "Adjusted Net Earnings", "Adjusted EBITDA" and
"Adjusted Funds from Operations", 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
entitled "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 U.S.
GAAP measure, in each case, can be found below. In addition,
"Adjusted Net Earnings" is presented in this news release on a per
share basis. Adjusted Net Earnings per share is a non-GAAP ratio
and is calculated by dividing Adjusted Net Earnings by the weighted
average number of common shares outstanding during the applicable
period.
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 U.S. GAAP consolidated net earnings.
|
Three months ended
June 30
|
(all dollar amounts
in $ millions)
|
2022
|
|
2021
|
Net earnings (loss)
attributable to shareholders
|
$
(33.4)
|
|
$
103.2
|
Add
(deduct):
|
|
|
|
Net earnings
attributable to the non-controlling interest, exclusive of
HLBV1
|
3.5
|
|
2.9
|
Income tax
recovery
|
(22.8)
|
|
(4.2)
|
Interest
expense
|
64.6
|
|
58.2
|
Other net
losses3
|
8.7
|
|
1.8
|
Pension and
post-employment non-service costs
|
2.3
|
|
3.9
|
Change in value of
investments carried at fair value2
|
143.5
|
|
(27.3)
|
Impacts from the
Market Disruption Event4 on the Senate Wind
Facility
|
—
|
|
—
|
Costs related to tax
equity financing
|
—
|
|
5.3
|
Loss on derivative
financial instruments
|
6.1
|
|
1.4
|
Realized loss on
energy derivative contracts
|
(0.2)
|
|
0.2
|
Loss on foreign
exchange
|
4.5
|
|
1.3
|
Depreciation and
amortization
|
112.5
|
|
98.2
|
Adjusted
EBITDA
|
$
289.3
|
|
$
244.9
|
1
|
Hypothetical
liquidation at book value ("HLBV") represents the value of net tax
attributes earned during the period primarily from electricity
generated by certain U.S. wind power and U.S. solar generation
facilities.
|
2
|
See Note 6 in
the unaudited interim consolidated financial statements.
|
3
|
See Note 16 in
the unaudited interim consolidated financial statements.
|
4
|
The "Market Disruption
Event" refers to the significantly elevated pricing that persisted
in the Electric Reliability Council of Texas market over several
days as a result of the February 2021 extreme winter storm
conditions experienced in Texas and parts of the central
U.S.
|
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
U.S. GAAP.
The following table shows the reconciliation of net earnings to
Adjusted Net Earnings exclusive of these items:
|
Three months
ended
June
30
|
(all dollar amounts
in $ millions except per share information)
|
2022
|
|
2021
|
Net earnings (loss)
attributable to shareholders
|
$
(33.4)
|
|
$
103.2
|
Add
(deduct):
|
|
|
|
Loss on derivative
financial instruments
|
6.1
|
|
1.4
|
Realized (gain) loss
on energy derivative contracts
|
(0.2)
|
|
0.2
|
Other net
losses2
|
8.7
|
|
1.8
|
Loss on foreign
exchange
|
4.5
|
|
1.3
|
Change in value of
investments carried at fair value1
|
143.5
|
|
(27.3)
|
Impacts from the
Market Disruption Event on the Senate Wind Facility
|
—
|
|
—
|
Costs related to tax
equity financing and other adjustments
|
—
|
|
5.3
|
Adjustment for taxes
related to above
|
(19.5)
|
|
5.8
|
Adjusted Net
Earnings
|
$
109.7
|
|
$
91.7
|
Adjusted Net
Earnings per common share
|
$
0.16
|
|
$
0.15
|
1
|
See Note 6 in
the unaudited interim consolidated financial statements.
|
2
|
See Note 16 in
the unaudited interim 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 U.S. GAAP.
The following table shows the reconciliation of cash provided by
operating activities to Adjusted Funds from Operations exclusive of
these items:
|
Three months
ended
June
30
|
(all dollar amounts
in $ millions)
|
2022
|
|
2021
|
Cash provided by (used
in) operating activities
|
$
268.6
|
|
$
103.3
|
Add
(deduct):
|
|
|
|
Changes in non-cash
operating items
|
(96.7)
|
|
51.8
|
Production based cash
contributions from non-controlling interests
|
2.5
|
|
—
|
Impacts from the
Market Disruption Event on the Senate Wind Facility
|
—
|
|
—
|
Acquisition-related
costs
|
5.9
|
|
0.9
|
Adjusted Funds from
Operations
|
$
180.3
|
|
$
161.3
|
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SOURCE Algonquin Power & Utilities Corp.