SEC Form 6-K filed by Atlantica Sustainable Infrastructure plc

Atlantica Reports Second Quarter 2024 Financial Results

 

 

 

 

 

 

 

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1	CAFD per share is calculated by dividing CAFD for the period by the weighted average number of shares for the period.

Highlights

 

 

Key Performance Indicators

 

2	Represents total installed capacity in assets owned or consolidated for the six-month period ended June 30, 2024 and 2023, respectively, regardless of our percentage of ownership in each of the assets except for Vento II for which we have included our 49% interest.

3	Includes 49% of Vento II wind portfolio production. Includes curtailment in wind assets for which we receive compensation.

4	Includes 55 MWt corresponding to thermal capacity from Calgary District Heating. Capacity as of the six-month period ended June 2023 included 43 MW corresponding to our 30% share in Monterrey, sold in April 2024.

5	GWh produced includes 30% of the production from Monterrey until its sale in April 2024.

Segment Results

 

(in thousands of U.S. dollars)		For the six-month period ended June 30,
		2024				2023
Revenue by geography
North America		$	223,027			$	202,171
South America			92,936				91,513
EMEA			255,232				260,935
Total Revenue		$	571,195			$	554,619
Adjusted EBITDA by geography
North America		$	164,079			$	154,038
South America			71,325				74,428
EMEA			171,930				175,362
Total Adjusted EBITDA		$	407,334			$	403,828

Operational KPIs

 

Production in the renewable business portfolio decreased by 4.6% for the first half of 2024 compared with the first half of 2023.

 

Production increased in our U.S. solar assets mainly due to higher availability of the Solana storage system. Production also increased in our wind assets in the U.S. due to higher wind resource in the first half of 2024 compared to the same period of 2023. In South America, production increased due to higher production in our wind assets and to the contribution of solar assets that have recently entered into operation. In Spain, production at our solar assets decreased mainly as a result of significantly lower solar radiation. At Kaxu, production decreased due to the unscheduled outage that started at the end of September 2023. The plant, where we have 51% equity interest, restarted operations in mid-February 2024. Part of the damage and business interruption has been covered by our insurance policy, after a 60-day deductible.

 

Our efficient natural gas and heat assets, our water assets, and our transmission lines, for which revenue is based on availability, continued at very high levels during the first six months of 2024.

 

Liquidity and Debt

 

As of June 30, 2024, cash at Atlantica’s corporate level was $20.0 million, compared with $33.0 million as of December 31, 2023. Additionally, as of June 30, 2024, the Company had $266.3 million available under its Revolving Credit Facility ($378.1 million as of December 31, 2023) and therefore a total corporate liquidity of $286.3 million, compared with $411.1 million as of December 31, 2023.

 

As of June 30, 2024, net project debt⁶ was $3.83 billion, which remained stable compared with $3.90 billion as of December 31, 2023, while net corporate debt⁷ was $1.17 billion as of June 30, 2024, compared with $1.05 billion as of December 31, 2023. As of June 30, 2024, the net corporate debt / CAFD before corporate debt service ratio⁸ was 3.9x.

6	Net project debt is calculated as long-term project debt plus short-term project debt minus cash and cash equivalents at the consolidated project level.

7	Net corporate debt is calculated as long-term corporate debt plus short-term corporate debt minus cash and cash equivalents at Atlantica’s corporate level.

8	Net corporate leverage is calculated as net corporate debt divided by midpoint 2024 CAFD guidance before corporate debt service. CAFD before corporate debt service is calculated as CAFD plus corporate debt interest paid by Atlantica.

Dividend

 

On July 31, 2024, the Board of Directors of Atlantica approved a dividend of $0.445 per share. This dividend is expected to be paid on September 16, 2024, to shareholders of record as of August 30, 2024.

 

Growth Update

 

Regarding growth, some of the developments that have taken place during the second quarter of 2024 include:

 

 

 

Proposed Acquisition

 

On May 27, 2024, Atlantica entered into a definitive agreement pursuant to which California Buyer Limited, a private company incorporated under the laws of England and Wales controlled by Energy Capital Partners (“Bidco”), for the acquisition of 100% of its shares at $22 per share in cash, subject to the terms of such agreement (the “Proposed Acquisition”), concluding the strategic review. The Proposed Acquisition is to be completed pursuant to a scheme of arrangement under the U.K. Companies Act 2006 and is subject to, among other conditions, approval by Atlantica’s shareholders of the scheme of arrangement, sanction of the Proposed Acquisition by the High Court of Justice of England and Wales, and regulatory approvals in different jurisdictions. The transaction is expected to close in the fourth quarter of 2024 or early first quarter of 2025. Upon the completion of the Proposed Acquisition, Atlantica will become a privately held company and its shares will no longer be listed on any public market.

 

9

Only includes projects estimated to be ready to build before or in 2030 of approximately 3.9 GW, 2.2 GW of renewable energy and 1.7 GW of storage (equivalent to 6.3 GWh). Capacity measured by multiplying the size of each project by Atlantica’s ownership. Potential expansions of transmission lines not included.

Appendix

 

Information usually included as appendix to the Earnings Presentation has been included as appendix to this Press Release.

 

Forward-Looking Statements

 

This press release contains forward-looking statements. These forward-looking statements include, but are not limited to, all statements other than statements of historical facts contained in this press release, including, without limitation, those regarding our future financial position and results of operations, our strategy, plans, objectives, goals and targets, future developments in the markets in which we operate or are seeking to operate or anticipated regulatory changes in the markets in which we operate or intend to operate. In some cases, you can identify forward-looking statements by terminology such as "anticipate," "believe," "could," "estimate," "expect," "forecast," "intend," "may," "plan," "should" or "will" or the negative of such terms or other similar expressions or terminology.

 

By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements speak only as of the date of this press release and are not guarantees of future performance and are based on numerous assumptions. Our actual results of operations, financial condition and the development of events may differ materially from (and be more negative than) those made in, or suggested by, the forward-looking statements. Except as required by law, we do not undertake any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof or to reflect anticipated or unanticipated events or circumstances.

 

Investors should read the section entitled "Item 3.D—Risk Factors” and the description of our segments and business sectors in the section entitled "Item 4.B. Information on the Company—Business Overview," each in our Annual Report on Form 20-F for the year ended December 31, 2023, filed with the Securities and Exchange Commission (“SEC”), for a more complete discussion of the risks and factors that could affect us.

 

Forward-looking statements include, but are not limited to, statements relating to: failure to realize the Proposed Acquisition or its expected benefits; uncertainties related to securing the necessary regulatory approvals, our Company’s shareholders’ approval, the sanction of the High Court of Justice of England and Wales and satisfaction of other closing conditions to consummate the Proposed Acquisition or the occurrence of any event, change or other circumstance that could give rise to the termination of the transaction agreement entered into with Bidco; risks related to diverting the attention of our management from ongoing business operations; significant transaction costs and/or unknown or inestimable liabilities, including the risk of shareholder litigation related to the Proposed Acquisition; Bidco’s ability to fund the Proposed Acquisition; effects relating to the announcement of the Proposed Acquisition or any further announcements or the consummation of the Proposed Acquisition on the market price of our Company’s shares; disruption from the Proposed Acquisition, making it more difficult to conduct business as usual or maintain relationships with customers, employees or suppliers; cash available for distribution (“CAFD”) estimates, including per currency, geography and sector; debt refinancing; self-amortizing project debt structure and debt reduction; the performance of our long-term contracts; net corporate leverage based on CAFD estimates; the use of non-GAAP measures as a useful predicting tool for investors; proceeds from sale of assets; dividends; sale of electricity under PPAs; expected investments; investments in assets under construction and their respective commercial operation dates; proceeds expected from the sale of our equity interest in Monterrey and various other factors, including those factors discussed under “Item 3.D—Risk Factors” and “Item 5.A—Operating Results” in our Annual Report on Form 20-F for the year ended December 31, 2023 filed with the SEC and the forward looking statements sections under the Reports of Foreign Private Issuer on Form 6-K dated May 28, 2024, and July 16, 2024.

 

 

This press release also includes certain non-GAAP financial measures, including Adjusted EBITDA, CAFD and CAFD per share. Non-GAAP financial measures are not measurements of our performance or liquidity under IFRS as issued by IASB and should not be considered alternatives to operating profit or profit for the period or net cash provided by operating activities or any other performance measures derived in accordance with IFRS as issued by the IASB or any other generally accepted accounting principles or as alternatives to cash flow from operating, investing or financing activities. Please refer to the appendix of this press release for a reconciliation of the non-GAAP financial measures included in this press release to the most directly comparable financial measures prepared in accordance with IFRS. Also, please refer to the following paragraphs in this section for an explanation of the reasons why management believes the use of non-GAAP financial measures (including CAFD, CAFD per share and Adjusted EBITDA) in this press release provides useful information to investors.

 

We present non-GAAP financial measures because we believe that they and other similar measures are widely used by certain investors, securities analysts and other interested parties as supplemental measures of performance and liquidity. The non-GAAP financial measures may not be comparable to other similarly titled measures employed by other companies and may have limitations as analytical tools. These measures may not be fit for isolated consideration or as a substitute for analysis of our operating results as reported under IFRS as issued by the IASB. Non-GAAP financial measures and ratios are not measurements of our performance or liquidity under IFRS as issued by the IASB. Thus, they should not be considered as alternatives to operating profit, profit for the period, any other performance measures derived in accordance with IFRS as issued by the IASB, any other generally accepted accounting principles or as alternatives to cash flow from operating, investing or financing activities. Some of the limitations of these non-GAAP measures are:

 

 

 

 

 

 

 

We define Adjusted EBITDA as profit/(loss) for the period attributable to the Company, after previously adding back loss/(profit) attributable to non-controlling interest, income tax, financial expense (net), depreciation, amortization and impairment charges of entities included in the consolidated financial statements and including depreciation and amortization, financial expense and income tax expense of unconsolidated affiliates (pro rata of our equity ownership).

 

CAFD is calculated as cash distributions received by the Company from its subsidiaries minus cash expenses of the Company, including debt service and general and administrative expenses. CAFD per share is calculated as CAFD divided by the weighted average number of outstanding ordinary shares of the Company during the period (116,159,054 for the six-months ended on June 30, 2024, and 116,146,766 for the six-months ended on June 30, 2023).

 

Our management believes Adjusted EBITDA, CAFD and CAFD per share are useful to investors and other users of our financial statements in evaluating our operating performance because it provides them with an additional tool to compare business performance across companies and across periods. Adjusted EBITDA is widely used by investors to measure a company’s operating performance without regard to items such as interest expense, taxes, depreciation and amortization, which can vary substantially from company to company depending upon accounting methods and book value of assets, capital structure and the method by which assets were acquired.

 

Our management believes CAFD and CAFD per share are relevant supplemental measurements of the Company’s ability to earn and distribute cash returns to investors and are useful to investors in evaluating our operating performance because securities analysts and other interested parties use such calculations as a measure of our ability to make quarterly distributions. In addition, CAFD and CAFD per share are used by our management team for determining future acquisitions and managing our growth. Adjusted EBITDA, CAFD and CAFD per share are widely used by other companies in the same industry.

 

Our management uses Adjusted EBITDA, CAFD and CAFD per share as measures of operating performance to assist in comparing performance from period to period on a consistent basis moving forward. They also readily view operating trends as a measure for planning and forecasting overall expectations, for evaluating actual results against such expectations, and for communicating with our board of directors, shareholders, creditors, analysts and investors concerning our financial performance.

 

In our discussion of operating results, we have included foreign exchange impacts in our revenue and Adjusted EBITDA by providing constant currency growth. The constant currency presentation is not a measure recognized under IFRS and excludes the impact of fluctuations in foreign currency exchange rates. We believe providing constant currency information provides valuable supplemental information regarding our results of operations. We calculate constant currency amounts by converting our current period local currency revenue and Adjusted EBITDA using the prior period foreign currency average exchange rates and comparing these adjusted amounts to our prior period reported results. This calculation may differ from similarly titled measures used by others and, accordingly, the constant currency presentation is not meant to substitute for recorded amounts presented in conformity with IFRS as issued by the IASB nor should such amounts be considered in isolation.

 

Information presented as the pro-rata share of our unconsolidated affiliates reflects our proportionate ownership of each asset in our property portfolio that we do not consolidate and has been calculated by multiplying our unconsolidated affiliates’ financial statement line items by our percentage ownership thereto. Note 7 to our consolidated financial statements as of and for the six-month period ended June 30, 2024 includes a description of our unconsolidated affiliates and our pro rata share thereof. We do not control the unconsolidated affiliates. Multiplying our unconsolidated affiliates’ financial statement line items by our percentage ownership may not accurately represent the legal and economic implications of holding a non-controlling interest in an unconsolidated affiliate. We include pro-rata share of depreciation and amortization, financial expense and income tax expense of unconsolidated affiliates because we believe it assists investors in estimating the effect of such items in the profit/(loss) of associates carried under the equity method (which is included in the calculation of our Adjusted EBITDA) based on our economic interest in such unconsolidated affiliates. Each unconsolidated affiliate may report a specific line item in its financial statements in a different manner. In addition, other companies in our industry may calculate their proportionate interest in unconsolidated affiliates differently than we do, limiting the usefulness of such information as a comparative measure. Because of these limitations, the information presented as the pro-rata share of our unconsolidated affiliates should not be considered in isolation or as a substitute for our or such unconsolidated affiliates’ financial statements as reported under applicable accounting principles.

 

Consolidated Statements of Operations

(Amounts in thousands of U.S. dollars)

 

Consolidated Statement of Financial Position

(Amounts in thousands of U.S. dollars)

Assets		As of June 30, 2024				As of December 31, 2023
Non-current assets
Contracted concessional assets, PP&E and other intangible assets		$	7,065,132			$	7,204,267
Investments carried under the equity method			221,558				230,307
Derivative assets			68,896				56,707
Other financial assets			82,676				79,875
Deferred tax assets			177,911				160,995
Total non-current assets		$	7,616,173			$	7,732,151
Current assets
Inventories		$	35,036			$	29,870
Trade and other receivables			335,290				286,483
Derivative assets			3,684				4,989
Other financial assets			190,543				183,897
Cash and cash equivalents			355,529				448,301
Assets held for sale			-				28,642
Total current assets		$	920,082			$	982,182
Total assets		$	8,536,255			$	8,714,333
Equity and liabilities
Share capital		$	11,616			$	11,616
Share premium			536,594				736,594
Capital reserves			954,838				858,220
Other reserves			327,598				308,002
Accumulated currency translation differences			(151,391	)			(139,434	)
Accumulated deficit			(333,575	)			(351,521	)
Non-controlling interest			151,892				165,332
Total equity		$	1,497,572			$	1,588,809
Non-current liabilities
Long-term corporate debt		$	1,125,496			$	1,050,816
Long-term project debt			3,763,395				3,931,873
Grants and other liabilities			1,161,840				1,233,808
Derivative liabilities			16,351				29,957
Deferred tax liabilities			288,371				271,288
Total non-current liabilities		$	6,355,453			$	6,517,742
Current liabilities
Short-term corporate debt		$	66,611			$	34,022
Short-term project debt			400,529				387,387
Trade payables and other current liabilities			169,231				141,713
Income and other tax payables			46,859				44,660
Total current liabilities		$	683,230			$	607,782
Total equity and liabilities		$	8,536,255			$	8,714,333

Consolidated Cash Flow Statements

(Amounts in thousands of U.S. dollars)

Reconciliation of Adjusted EBITDA to Net cash provided by operating activities

Reconciliation of CAFD to CAFD per share

Reconciliation of Cash Available For Distribution and Adjusted EBITDA to Profit for the period attributable to the Company

(in thousands of U.S. dollars)		For the three-month period ended June 30,								For the six-month period ended June 30,
		2024				2023				2024				2023
Profit for the period attributable to the Company		$	21,424			$	35,651			$	16,033			$	24,661
Profit attributable to non-controlling interest			6,234				1,113				6,240				6,130
Income tax			26,562				7,488				3,942				(2,168	)
Depreciation and amortization, financial expense and income tax expense of unconsolidated affiliates (pro rata of our equity ownership)			(990	)			3,091				4,572				8,700
Financial expense, net			86,704				78,953				166,330				159,387
Depreciation, amortization, and impairment charges			103,181				103,328				210,217				207,118
Adjusted EBITDA		$	243,115			$	229,624			$	407,334			$	403,828
Atlantica’s pro-rata share of Adjusted EBITDA from unconsolidated affiliates			(6,918	)			(7,755	)			(19,432	)			(19,551	)
Non-monetary items			(43,265	)			(2,384	)			(61,249	)			(1,735	)
Accounting provision for electricity market prices in Spain			(36,867	)			(4,460	)			(49,965	)			(5,612	)
Difference between billings and revenue in assets accounted for as concessional financial assets			8,150				16,695				17,812				33,136
Income from cash grants in the US			(14,548	)			(14,619	)			(29,096	)			(29,258	)
Maintenance Capex			(3,279	)			(12,041	)			(5,670	)			(19,671	)
Dividends from equity method investments			10,139				3,063				25,061				15,464
Net interest and income tax paid			(117,400	)			(108,666	)			(144,138	)			(138,845	)
Changes in other assets and liabilities			12,642				(8,295	)			(26,729	)			(101,275	)
Deposits into/ withdrawals from restricted accounts10			15,987				11,418				8,563				21,238
Change in non-restricted cash at project level10, 11			44,821				73,659				53,460				116,773
Dividends paid to non-controlling interests			(7,291	)			(11,180	)			(12,849	)			(17,191	)
Debt principal repayments			(109,717	)			(103,918	)			(134,596	)			(134,461	)
Monterrey divestment excluding gain			29,248				-				29,248				-
Cash Available For Distribution		$	68,082			$	63,525			$	119,003			$	124,574

10	“Deposits into/ withdrawals from restricted accounts” and “Change in non-restricted cash at project level” are calculated on a constant currency basis to reflect actual cash movements isolated from the impact of variations generated by foreign exchange changes during the period.

11	“Change in non-restricted cash at project level” excludes investments in assets under construction financed with cash at the project level.

About Atlantica

 

 

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Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.