Algonquin Power & Utilities Corp. Announces 2024 Third Quarter Financial Results
Making progress in strategic transition to regulated utility
OAKVILLE, ON, Nov. 7, 2024 /PRNewswire/ - Algonquin Power & Utilities Corp. (TSX:AQN) (NYSE:AQN) ("AQN" or the "Company") announced today financial results for the third quarter ended September 30, 2024. All amounts are shown in United States dollars ("U.S. $" or "$"), unless otherwise noted.
"We continue to hit key milestones on our journey towards a simpler and more focused regulated business," said Chris Huskilson, Chief Executive Officer of AQN. "These successes include the announced sales of our renewables business and Atlantica ownership stake, completion of the rollout of our new IT platform, appointment of new corporate leadership, the simplification of our capital structure, and recent rate case filings to improve our earned returns. In all, we are proud of the progress we have made, though this is a multi-year journey and there is still much work to be done. We are committed to serving our customers and producing an appropriate return on our investments and we are confident we are on the right path to do so."
Third Quarter 2024 Financial Results for Continuing Operations1
Net Utility Sales2 of $442.9 million, an increase of 6%;
Adjusted EBITDA2 of $264.4 million, an increase of 4%;
Adjusted Net Earnings2 of $64.9 million, a decrease of 5%; and
Adjusted Net Earnings2 per common share of $0.08, a decrease of 20%, in each case on a year-over-year basis.
All amounts in U.S. $ millions except per share information
Three months ended
September 30
Nine months endedSeptember 30
2024
2023
Change
2024
2023
Change
Revenue3
$ 573.2
$ 564.8
1 %
$1,734.7
$1,818.3
(5) %
Regulated Services Group Revenue
563.9
555.9
1 %
1,705.8
1,790.5
(5) %
Hydro Group Revenue
8.9
8.5
4 %
28.0
26.7
5 %
Corporate Group Revenue
0.4
0.4
—
1.0
1.1
(9) %
Net earnings (loss) attributable to shareholders from continuing operations
49.5
(174.9)
128 %
172.9
(184.3)
194 %
Per common share from continuing operations
0.06
(0.26)
123 %
0.23
(0.28)
182 %
Net earnings (loss) attributable to shareholders including discontinued operations
(1,305.7)
(174.5)
(648) %
(1,194.1)
(157.6)
(657) %
Per common share including discontinued operations
(1.71)
(0.26)
(556) %
(1.67)
(0.24)
(596) %
Cash provided by operating activities
66.7
132.6
(50) %
433.6
427.3
1 %
Adjusted Net Earnings2
64.9
68.6
(5) %
186.8
198.2
(6) %
Per common share
0.08
0.10
(20) %
0.25
0.28
(11) %
Adjusted EBITDA2
264.4
254.9
4 %
790.5
751.4
5 %
Adjusted EBITDA2 for Regulated Services Group
236.2
228.7
3 %
706.0
674.0
5 %
Adjusted EBITDA2 for Hydro Group
7.1
6.5
9 %
21.0
19.5
8 %
Adjusted EBITDA2 for Corporate Group
21.1
19.7
7 %
63.5
57.9
10 %
Adjusted Funds from Operations2
143.3
146.8
(2) %
434.1
433.5
—
Dividends per common share
0.0650
0.1085
(40) %
0.2820
0.3255
(13) %
Long-term Debt
7,475.7
7,500.2
—
7,475.7
7,500.2
—
1
AQN's operations are now organized across three business units consisting of: the Regulated Services Group, which primarily owns and operates a portfolio of regulated electric, water distribution and wastewater collection and natural gas utility systems and transmission operations in the United States, Canada, Bermuda and Chile; the Hydro Group, consisting of the hydroelectric business which is not being sold as a part of the renewables business; and the Corporate Group, which includes corporate and service companies as well as the Company's investment in Atlantica.
2
Please refer to "Non-GAAP Measures" below for further details.
3
Discontinued Operations Revenue for the three months and nine months ended September 30, 2024 totaled $66.3 million and $240.5 million, respectively, versus $60.0 million and $213.0 million for the three months and nine months ended September 30, 2023.
Third Quarter 2024 Operational Results and Corporate Actions
Regulated Services Group saw growth from implementation of new rates, offset by higher depreciation, higher financing costs and greater share count - The Regulated Services Group recorded third quarter year-over-year growth in Adjusted EBITDA of 3% (see "Non-GAAP Measures" below), due to the implementation of new rates, most notably at the Bermuda, CalPeco, Empire Arkansas Electric utilities, and New York Water utility. New rates were more than offset by higher operating expenses, and depreciation. Additionally, the June, 17 2024 settlement of share purchase contracts related to AQN's green equity units drove a higher year-over-year share count.
New York Water settlement approval constructively concludes first rate case since acquisition – On August 15, 2024, the New York Public Service Commission issued an order authorizing a $38.6 million increase in revenues over a three-year rate plan for the Company's New York Water utility, and including a 9.1% allowed return on equity and 48% equity ratio. New rates became effective September 1, 2024, and are being collected retroactive to April 1, 2024.
Upcoming rate cases mark meaningful steps toward closing earned return gap, On September 20, 2024, the Company filed a rate case for its CalPeco Electric utility, seeking an increase in revenues of $39.8 million based on a return on equity of 11.0%, an equity ratio of 52.5%, and additions to rate base of approximately $150 million through the end of 2025. Additionally, on November 6, 2024, the Company filed a rate case for its Empire Electric utility in Missouri, requesting $92.1 million in revenue increases and predicated on a 10.0% allowed return on equity. The rate case, if approved, would increase rate base by approximately $534 million. Separately, the Company also expects to file a rate case for its Litchfield Park Water utility in Arizona in the first half of 2025. The three rate cases combined, if resolved in accordance with the Company's expectations, would comprise over $700 million of the capital already invested by the Company but not yet reflected in rates. Reducing regulatory lag continues to be a core objective of AQN.
Announced sale agreement of Renewable Energy Business – On August 9, 2024, the Company entered into an agreement to sell its renewable energy business, excluding hydro, to a wholly-owned subsidiary of LS Power for total cash consideration of up to $2.5 billion (subject to certain closing adjustments). The Company has reclassified its renewable energy business, excluding hydro, as "discontinued operations".
AQN's unaudited interim consolidated financial statements for the three and nine months ended September 30, 2024 and management discussion and analysis for the three and nine months ended September 30, 2024 (the "Interim MD&A") will be available on its website at www.AlgonquinPower.com and in its corporate filings on SEDAR+ at www.sedarplus.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 Thursday, November 7, 2024, hosted by Chief Executive Officer, Chris Huskilson, and Chief Financial Officer, Darren Myers.
Date:
Thursday, November 7, 2024
Time:
10:00 a.m. ET
Conference Call:
Toll Free Dial-In Number
1 (800) 715-9871
Toll Dial-In Number
1 (647) 932-3411
Conference ID
7888098
Webcast:
https://edge.media-server.com/mmc/p/eoi9utr9
Presentation also available at: www.algonquinpower.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 approximately $18 billion of total assets. AQN is committed to providing safe, secure, reliable, cost-effective, and sustainable energy and water solutions through its portfolio of generation, transmission, and distribution utility investments to over one million customer connections, largely in the United States and Canada. In addition, AQN owns, operates, and/or has net interests in over 4 GW of installed renewable energy capacity. 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 and Series 2019-A subordinated notes are listed on the New York Stock Exchange under the symbols AQN and AQNB, respectively.
Visit AQN at www.algonquinpower.com and follow us on X.com
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 ...
