Q3 2021 Atlantica Sustainable Infrastructure PLC Earnings Call
Welcome to Atlantica third quarter 'twenty to 'twenty, one financial results Conference call. Please continue to standby presentation will begin very shortly.
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Welcome to Atlantica third quarter 2021 financial results Conference call.
Atlantica is a sustainable infrastructure company that owns a diverse portfolio of contracted energy storage efficient natural gas transmission lines and water assets in north and South America and in certain markets in EMEA.
Just a reminder, that this call is being webcast live on the Internet and the replay of this call will be available on the atlantica corporate website.
Atlantica will be making forward looking statements. During this call based on current expectations and assumptions, which are subject to risks and uncertainties actual results could differ materially from our forward looking statements.
And they'll probably key assumptions are incorrect or because of other factors discussed in today's earnings presentation or because of other factors discussed in <unk>.
Clothing, the risk factors section of the accompanying presentation and in our latest reports and filings with the Securities and Exchange Commission all of which can be found on our website.
Our plan to cut does not undertake to update any forward looking statements.
Joining us today for today's conference call or Atlantica, CEO Santiago, she fish and CFO Francisco Martinez Davis.
Usual at the end of the conference call, we will open the lines for the Q&A session.
I will now pass you over to Mr. Hayes. Please go ahead Sir.
Thank you very much good morning.
Thank you for joining us for our third quarter conference call.
A few opening remarks and during the first nine months of these euro 2021.
We have delivered a coffee.
$468 million, which represents a growth of close to 13% versus the same period in the previous year.
Our board of Directors has decided to increase the dividend has declared a quarterly dividend of 43.
0.5 cents per share.
Additionally, on the ESG front, we continue making.
As you know we have been very focused for the last years on ESP.
In the last few weeks, we have had our emissions target approved by the science based targets initiative [noise] disease.
Recognized organization that certifies that emission reduction targets are ambitious enough to be aligned with the goals set in the Paris agreement to limit global warming for us having a third party is.
Certifying that our plans in our emission reductions.
Comply let's say with.
With these goals is extremely important and we know that for a number of our investors. This is also important so we're very happy to be able to communicate this innovation.
We have recently received the terror car to seal a recognition to our commitment to sustainability in any event.
Cop 26, the United Nations Climate change conference, which is still ongoing.
In the U K and in Glasgow.
I will now turn the call over to Francisco, who is probably that the conference I mentioned this because we have had some difficulties with the line. So I hope that everything will be okay, because he's got over to you.
Thank you very much Santiago and good morning, everybody. Please turn to slide number four.
You can see our financial for the first nine months of 2020 one.
Revenue in the first nine months of 'twenty or 'twenty, one reached $940 4 million, which represents an eight 4% growth on a comparable basis, excluding foreign exchange and the nonrecurring impact in our renewable sector that we've discussed in the second quarter.
Adjusted EBITDA, including unconsolidated affiliates increased by two 1% to $634 1 million.
We generated $168 5 million or kind of shop I would for distribution in the first nine months of 2020, one an increase of 12, 9% year over year.
If we look at our CAD per share stood at $1.52 year to date, a growth of 3.6 year over year.
On the following slide slide number five you can see our performance by geography and business sector.
In North America revenue increased by 15% to $308 7 million in the first nine months of 2020. One thanks to the recently acquired assets, while a bit the increase by 2%.
In South America revenue, and EBITDA increased by 5% and 1% respectively.
Also due to recent investments.
Better in the men in the EMEA region increased by 2% compared to the first nine months of plenty plenty things.
Thanks to new assets.
Revenue or cut too and foreign exchange differences.
If we look at it a bit though by business sector.
We can see similar effects.
Now lets please turn to slide number six where we will review our operational performance.
Electricity produced by our by our renewable assets reached.
3460 gigawatt hours in the first nine months of 2020 one.
An increase of 33% compared to the same period of 'twenty 'twenty.
The increase was largely due to the contribution of recently acquired assets.
Production also increased in South Africa, and Spain, where solar radiation was hot.
On the other hand solar radiation with lower than expected in the U S.
The wind resource was lower than expected and our assets in north and South America.
Looking at our availability based contracts efficient natural gas transmission lines and water assets have continued to achieve.
High availability levels in the first nine months of 2021.
Let's now move to slide number seven to walk you through our cash flow.
Our operating cash flow for the first nine months of 2021 with $442 million.
A very significant increase versus the same period of 'twenty 'twenty sangster.
Thanks to an improvement in variations of working capital.
Investing cash flow for the first nine months of 2020, one was 323 million.
Result of the acquisitions closed during the period.
Financing cash flow for the first nine months of 'twenty 'twenty corresponds primarily to the scheduled project debt repayments for approximately 256 million.
And 165 million of dividends paid to shareholders and Noncontrolling interest.
Financing cash flow also includes the positive impact of the $131 million of the equity raise closed in January and 40 million for the refinancing of one of our note issuance facility with the proceeds of the 400 range.
Green notes issued in May.
I will now turn the call back over to Santiago.
Thank you if we move to page eight we see that in 2021 year to date, we have made what we consider this a very good progress in our <unk>.
Investment growth plan in North America, with the acquisition of three assets, including two very large renewable energy.
Portfolios.
Where we have invested around $370 million.
Assets in operation.
We are also investing $25 million more or less in in.
Solar photovoltaic seen South America.
And we have additionally, we recently closed the acquisition of two <unk>.
For the little take assets in Italy, our first investment in that country.
Overall, including some.
At least one other smaller investments bdcs are north of $460 million year to date, well above the guidance of $300 million that we have been sharing with you. We are now focused on new opportunities for 2022, and we just.
Back to be able to share or update targets plans when we present, our 2021 results in February.
Operator, we are ready for Q&A.
Thank you ladies and gentlemen.
A question and answer session, if you'd like to ask a question. Please press star and one on your telephone.
Wait for your name to be announced.
You can cancel your request at any time by pressing a husky.
So once again it is star and one final question.
And your first question is from the line of.
I'm just trying to get from Seaport. Please go ahead.
Thank you and it was great to see you guys at the EI [laughter], but just just a couple of follow up questions. So.
We had.
The infrastructure Bill that they'll pass that and in the U S Congress stay with direct pay for renewable.
I'm just wondering if you think that that's going to help with.
Finding acquisition targets in order to allocate that 300 million per year in gross.
Yeah, absolutely we think that that's a very important piece in fact, some of our larger assets.
<unk>.
Use that feature in the past so I personally think that this is going to be very good pool of sector in general.
It's going to be very good for larger investments and in our case, it's something that should help us going forward.
Yeah.
Okay, and then secondly.
During the year, we talked about potential expansion of existing sites additions so the batteries.
Or maybe also pilot hydrogen projects at some of the solar thermal sides in Spain could you could you expand on this.
Yeah, I mean without being very specific because obviously many of these are ongoing.
Ongoing plants.
We do see.
In the short on the midterm a number of opportunities to invest in in plants, we already own in sites, we already own.
Yeah.
Two different ways, including the ones you mentioned.
We think that going forward.
Hi, B being able to offer hybrid technologies, let's say you sold combining different renewable energy technologies.
Including the storage, including clean fuels like a hydrogen and it's going to be one of the ways.
To make renewable more of these possible closer to a base load.
To be able to drive further value from assets you own already obviously, depending on the geography, your PPA or the regulation. These things can be done in let's say weaker are you might need to wait and quite a few years, but clearly there's there's some value there and we are working on a number of those opportunities.
Yeah.
But just one follow up I remember in the past you had some concerns about the the replacement cycle of the battery components and if its that accurately reflected in the N. The return expectation place asset. So has anything changed or do you think that the market is.
Now accurately reflecting the the maintenance capex off these assets.
No I think that there is there's a certain uncertainty there and the track record in batteries CS is what it is so not very long.
And therefore, there is some uncertainty there and as you know we are or we can see ourselves supplement investor and but there are situations, where even with that uncertainty.
Is that the projects can work on and we still have some time in front of us to work through some of those questions.
Great. Thank you.
Thank you.
Thank you once again it is star and one final question.
And your next question from the line of Julien.
Smith from Bank of America. Please go ahead.
Hey, guys. This is anya filling in for Julian This morning.
So first I guess I wanted to follow up a little bit on the grad side of sites in the U S. What other geographies have you sort of been looking at internationally in terms of growth opportunities and then what about the potential contribution from agents.
Good morning, Don Yeah, good to hear you.
Regarding growth opportunities.
We can from a geographical point of view, we continue focusing on the same geographies, we have been focused for a number of years.
And I'm, probably with a similar weight.
Jim to the one we have in our portfolio today. So the U S is clearly a priority on impact piece a year actually.
No.
A significant part of our investments have happened there on top of that we continue working on that.
The key markets in South America, where we already have presence, we do see opportunities in South America, we think that.
The markets, where we are present.
At the end.
The clear trend there is.
For renewable energy to continue growing and we do see significant opportunities we.
We do see opportunities around renewable energy and we also see opportunities around meet them around some of the newer technologies I was discussing before on top of that in Europe, and we continue.
Working on the situations and we think that.
There will be opportunities to deploy capital there. So a similar story to what you know today core U S with.
Coupled with opportunities in South America uninsured, then area Ive seen in Europe in.
Michelle off your question.
Your second question, obviously, you know our growth strategy is about.
Three pillars, if you want him on one of our pillars CS.
Co investment.
With third parties or agreements with third parties, where we are working in different regions with different players and one of them one of those relationships is we.
We say this we are currently working with them specifically in Colombia.
We announced sometime ago.
Going forward, we will we plan to continue working with all of our partners, including ages, but not only that one going forward and our restart the as you know is to grow through multiple sources, we don't depend on one specific partner or one specific situation.
And in our growth.
Okay, great. Thank you and then as a follow up but could you maybe talk a little bit more about inflationary pressure as supply chain initiatives, and then how that could impact potential new projects.
And the timing.
Yes. So clearly we are seeing the same pressure everybody has seen the good thing is with our business model.
The impact that can have on us is very limited because at any point in time the amount of capital we are deploying in building ourselves.
Assets is very limited and therefore.
That is not.
Our concern for us.
At this point in time, although.
Obviously, we see a market like what RFP or Sun and companies in the sector I see in a market, where you will take a few quarters before supply chains can come and go back to normal, but Fortunately our cash flow does not depend on that are cash flow depends on operating the fleet.
Assets, we own.
Okay, great. Thank you and then just one final one here I just wanted to get an update on how the assets across all youre doing operationally any issues and then on Capex and is it your opinion that pallets.
Alex.
So we're starting with the last part of the question.
And on the ECL disclosure this situation.
Today is significantly better.
Tim.
In general in the fleet and we are what do we expect as you know with one asset Solana.
There we are doing a number of improvements and that has been performing.
Below what we we expect.
Okay.
Yeah.
Okay. Thanks, and then on anything on panics.
I think as I mentioned at the beginning of the situation has improved significantly.
Okay. Okay, great. Thank you I'll jump back in the game.
Okay.
Thank you once again to the store and one final question.
And there are no further questions at this time.
With that we conclude the presentation today. Thank you for participating you may disconnect.
Thank you thanks to everybody.
Thank you bye bye.
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