Algonquin Power & Utilities Corp. Announces 2024 Third Quarter Financial Results

PR Newswire

OAKVILLE, ON, Nov. 7, 2024

Making progress in strategic transition to regulated utility

OAKVILLE, ON, Nov. 7, 2024 /PRNewswire/ - Algonquin Power & Utilities Corp. (TSX: AQN) $(AQN)$ ("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 Operations(1)

   -- 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. 
 
                         Three months ended            Nine months ended 
                             September 30                 September 30 
-------------------  ---------------------------  ---------------------------- 
All amounts in U.S. 
$ millions except 
per share 
information               2024     2023  Change        2024      2023  Change 
-------------------  ---------  -------  -------  ---------  --------  ------- 
Revenue(3)             $ 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)  $(596.SI)$ % 
Cash provided by 
 operating 
 activities               66.7    132.6   (50) %      433.6     427.3      1 % 
Adjusted Net 
 Earnings(2)              64.9     68.6    (5) %      186.8     198.2    (6) % 
 Per common share         0.08     0.10   (20) %       0.25      0.28   (11) % 
Adjusted EBITDA(2)       264.4    254.9      4 %      790.5     751.4      5 % 
Adjusted EBITDA(2) 
 for Regulated 
 Services Group          236.2    228.7      3 %      706.0     674.0      5 % 
Adjusted EBITDA(2) 
 for Hydro Group           7.1      6.5      9 %       21.0      19.5      8 % 
Adjusted EBITDA(2) 
 for Corporate 
 Group                    21.1     19.7      7 %       63.5      57.9     10 % 
Adjusted Funds from 
 Operations(2)           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 
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