Q2 2024 Algonquin Power & Utilities Corp Earnings Call Transcript
Key Points
- Successful sale of the renewables business at a valuation of $2.5 billion, including $2.28 billion in cash proceeds and $220 million in an earn-out agreement.
- Implementation of the customer first enterprise platform, which promises to deliver value to customers and substantial efficiencies.
- Addition of three new experienced Board members with extensive infrastructure and regulated utility experience.
- Double-digit increases in key financial metrics: EBITDA up 12%, adjusted net earnings up 16%, and adjusted net earnings per share up 13% compared to the same period last year.
- Strong balance sheet expected post-sale, with net cash proceeds of approximately $1.6 billion after repaying construction financing and other customary adjustments.
- Delays in rate case filings in jurisdictions like Missouri, New Hampshire, and California, which will shift the beginning of recoveries closer to 2026, impacting short-term earnings.
- Reduction in regulated CapEx for 2025 to improve recoveries and reduce regulatory lag, which may limit growth opportunities in the short term.
- Decision to right-size the dividend, reducing it to a payout ratio of 60% to 70% of optimized core regulated earnings, which may disappoint some investors.
- Challenges in the short-term due to the most active rate case calendar in the company's history and the post-conversion adjustment period for the new customer first SAP system.
- Potential impact on 2025 earnings due to rate case timing and the need to improve returns before increasing capital spending.
Hello, and welcome to the Algonquin Power & Utilities Corp. second quarter 2024 earnings conference call. (Operator Instructions).
I will now turn the conference over to Mr. Brian Chin, Vice President of Investor Relations. Please go ahead.
Thanks and good morning, everyone. Thank you for joining us for our second quarter 2024 earnings conference call. Speaking on the call today will be Chris Huskilson, Chief Executive Officer; Darren Myers, Chief Financial Officer; Jeff Norman, President of Renewables; and Sarah MacDonald, Chief Transformation Officer.
To accompany today's earnings call, we have a supplemental webcast presentation available on our website, algonquinpower.com. Our financial statements and management discussion analysis are also available on the website as well as on SEDAR+ and EDGAR.
We would like to remind you that our discussion during the call will include certain forward-looking information and non-GAAP measures. Actual
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