OAKVILLE, ON, May 12, 2022
/PRNewswire/ - Algonquin Power & Utilities Corp. (TSX: AQN)
(NYSE: AQN) ("AQN" or the "Company") today announced financial
results for the first quarter ended March
31, 2022. All amounts are shown in United States dollars ("U.S. $" or "$"),
unless otherwise noted.
"We are pleased to announce that today our Board of Directors
approved a 6% increase in our quarterly common share dividend,
supported by solid operating results from the Company's diversified
and resilient business model," said Arun
Banskota, President and Chief Executive Officer of
AQN. "We remain committed to delivering on the Company's
$12.4 billion capital plan from 2022
through 2026 to drive growth in earnings and cash flows which we
expect will, in turn, support compelling returns for
shareholders."
Q1 2022 Financial Highlights
- Revenue of $735.7 million, an
increase of 16% compared to the first quarter of 2021
- Adjusted EBITDA1 of $330.6
million, an increase of 17% compared to the first quarter of
2021;
- Adjusted Net Earnings1 of $141.3 million, an increase of 13% compared to
the first quarter of 2021; and
- Adjusted Net Earnings1 per share of $0.21, an increase of 5% compared to the first
quarter of 2021.
All amounts in U.S.
$ millions except per share information
|
Three months ended
March 31
|
2022
|
2021
|
Change
|
Revenue
|
$
|
735.7
|
|
|
$
634.5
|
|
|
16%
|
Net earnings
attributable to shareholders
|
91.0
|
|
|
13.9
|
|
|
555%
|
Per share
|
0.13
|
|
|
0.02
|
|
|
550%
|
Cash provided by
operating activities
|
166.2
|
|
|
(243.5)
|
|
|
168%
|
Adjusted Net
Earnings1
|
141.3
|
|
|
124.5
|
|
|
13%
|
Per share
|
0.21
|
|
|
0.20
|
|
|
5%
|
Adjusted
EBITDA1
|
330.6
|
|
|
282.9
|
|
|
17%
|
Adjusted Funds from
Operations1
|
220.2
|
|
|
205.3
|
|
|
7%
|
Dividends per
share
|
0.1706
|
|
|
0.1551
|
|
|
10%
|
1.
Please refer to "Non-GAAP Measures" at the end of this document
for further details.
|
Corporate Highlights
- Approval by Kentucky Public Service Commission ("KPSC")
– On May 4, 2022, the 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.
The Kentucky Power Transaction was originally announced on
October 26, 2021. Closing of the
Kentucky Power Transaction is subject to the satisfaction of
certain conditions precedent, including the approval of the U.S.
Federal Energy Regulatory Commission ("FERC") for the Kentucky
Power Transaction and certain approvals from FERC, the KPSC and the
Public Service Commission of West
Virginia with respect to the termination and replacement of
the existing operating agreement for the Mitchell coal generating
facility (in which Kentucky Power Company owns a 50%
interest).
- Liberty New York Water Acquisition & Integration
– Effective January 1, 2022,
the Company closed the previously-announced acquisition of New York
American Water Company, Inc. (subsequently renamed Liberty
Utilities (New York Water) Corp.) from American Water Works
Company, Inc. for a purchase price of approximately $609 million. The transition and integration are
progressing well as the Company continues to deliver safe and
reliable water service to customers in New York.
- Issuance of approximately $1.1
Billion of Subordinated Notes – On January 18, 2022, the Company completed
concurrent public offerings of junior subordinated notes in
the United States and Canada in an aggregate principal amount of
$750 million and C$400 million, respectively (the "Note
Offerings"). The Company intends to use the net proceeds of the
Note Offerings to partially finance the Kentucky Power Transaction
provided that, in the short-term, prior to closing of the Kentucky
Power Transaction, the Company has used a portion of, and expects
to use the remainder of such net proceeds to repay certain
indebtedness of the Corporation and its subsidiaries.
- Empire Missouri Rate Case Outcome – On
May 28, 2021, the Empire District
Electric Company ("Empire") filed a rate review based on a 12 month
historical test year ending September 30,
2020, with an update period through June 30, 2021, requesting an increase in rates of
$79.9 million which included
$29.9 million related to recovery of
fuel and power pass-through costs related to the February 2021 Midwest Extreme Weather Event.
Empire subsequently amended the rate request to $50.0 million after deferring the recovery of the
extraordinary fuel pass-through costs as well as certain costs
related to the retirement of the Asbury coal plant to a subsequent docket
requesting securitization. On April 6,
2022, the Missouri Public Service Commission issued its
final Report and Order resulting in an annual base rate revenue
increase of $39.5 million.
- Completion of the Blue Hill Wind Facility – On
April 14, 2022, the Renewable Energy
Group achieved full commercial operations at its 175 MW Blue Hill
Wind Facility, located in southwest Saskatchewan. The Blue Hill Facility is the
Renewable Energy Group's 15th wind powered electric generating
facility and is expected to generate approximately 683 GW-hrs of
energy per year, with the output being sold through a long-term
power purchase agreement with an investment grade rated
entity.
- Ongoing Execution of C&I Strategy – The
Company continues to execute on its relationship with commercial
and industrial ("C&I") customers to help them achieve their
sustainability objectives. On May 10,
2022, AQN announced its collaboration with Meta, formerly
known as Facebook, Inc., on AQN's 112 MW Deerfield II Wind Project
in Huron County, Michigan.
Pursuant to the long-term power purchase agreement entered into by
the parties, Meta will purchase 100 percent of the energy and
environmental attributes from Deerfield II, building upon the
existing relationship the companies have at the operating Altavista
Solar Facility in Virginia.
Construction on Deerfield II began in April
2022.
- Increase in Common Share Dividend – Consistent
with AQN's history of delivering total shareholder return comprised
of an attractive dividend yield and capital appreciation, on
May 12, 2022, AQN's board of
directors approved a 6% dividend increase from a total annualized
dividend of $0.6824 per common share
to a total annualized dividend of $0.7233 per common share. The dividend is
expected to be paid quarterly at a rate of $0.1808 per common share, up from $0.1706 per common share.
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, May 13, 2022
hosted by President and Chief Executive Officer, Arun Banskota and Chief Financial Officer,
Arthur Kacprzak.
Date:
|
Friday, May 13,
2022
|
Time:
|
10:00 a.m.
ET
|
Conference
Call:
|
Toll Free Dial-In
Number
|
(888)
330-2454
|
|
Toll Dial-In
Number
|
(240)
789-2714
|
|
Event
Passcode
|
5079453
|
Webcast:
|
https://event.on24.com/wcc/r/3730565/B0D9DC01E26134ED73A4E3E39A879DBE
|
|
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,
Algonquin 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. Algonquin is a global leader in
renewable energy through its portfolio of long-term contracted
wind, solar, and hydroelectric generating facilities. Algonquin
owns, operates, and/or has net interests in over 4 GW of installed
renewable energy capacity.
Algonquin 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.
Algonquin'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",
"intends", "plans" 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;
the expected generating capacity of the Blue Hill Wind Facility;
the expected use of proceeds from completed offerings; and expected
dividends to shareholders. 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 ended
March 31, 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
March 31
|
(all dollar amounts
in $ millions)
|
2022
|
|
2021
|
Net earnings
attributable to shareholders
|
$
91.0
|
|
$
13.9
|
Add
(deduct):
|
|
|
|
Net
earnings attributable to the non-controlling interest, exclusive of
HLBV1
|
4.1
|
|
6.4
|
Income tax expense (recovery)
|
9.5
|
|
(21.6)
|
Interest expense
|
57.9
|
|
49.6
|
Other net losses3
|
4.7
|
|
8.4
|
Pension and post-employment non-service costs
|
2.6
|
|
3.7
|
Change in value of investments carried at fair
value2
|
40.5
|
|
71.7
|
Impacts from the Market Disruption Event4 on the
Senate Wind Facility
|
—
|
|
53.4
|
Loss (gain) on derivative financial instruments
|
(0.3)
|
|
(1.1)
|
Realized loss on energy derivative contracts
|
0.3
|
|
0.2
|
Loss (gain) on foreign exchange
|
0.3
|
|
0.9
|
Depreciation and amortization
|
120.0
|
|
97.4
|
Adjusted
EBITDA
|
$
330.6
|
|
$
282.9
|
|
|
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. HLBV earned in the three months ended March 31, 2022
amounted to $42.5 million, as compared to $23.9 million during the
same period in 2021.
|
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
March 31
|
(all dollar amounts
in $ millions except per share information)
|
2022
|
|
2021
|
Net earnings
attributable to shareholders
|
$
91.0
|
|
$
13.9
|
Add
(deduct):
|
|
|
|
Loss (gain) on derivative financial instruments
|
(0.3)
|
|
(1.1)
|
Realized loss on energy derivative contracts
Realized loss on energy derivative contracts
|
0.3
|
|
0.2
|
Other net losses2
|
4.7
|
|
8.4
|
Loss (gain) on foreign exchange
|
0.3
|
|
0.9
|
Change in value of investments carried at fair
value1
|
40.5
|
|
71.7
|
Impacts from the Market Disruption Event on the Senate Wind
Facility
|
—
|
|
53.4
|
Adjustment for taxes related to above
|
4.8
|
|
(22.9)
|
Adjusted Net
Earnings
|
$
141.3
|
|
$
124.5
|
Adjusted Net
Earnings per common share
|
$
0.21
|
|
$
0.20
|
|
|
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 March
31
|
(all dollar amounts
in $ millions)
|
2022
|
|
2021
|
Cash provided by
operating activities
|
$
166.2
|
|
$
(243.5)
|
Add
(deduct):
|
|
|
|
Changes in non-cash operating items
|
48.1
|
|
388.5
|
Production based cash contributions from non-controlling
interests
|
3.7
|
|
4.8
|
Impacts from the Market Disruption Event on the Senate Wind
Facility
|
—
|
|
53.4
|
Acquisition-related costs
|
2.2
|
|
2.1
|
Adjusted Funds from
Operations
|
$
220.2
|
|
$
205.3
|
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SOURCE Algonquin Power & Utilities Corp.