Atlantica Sustainable Infrastructure plc(US:AY)2022-11-09 14:15Financial Data and Key Metrics Changes - Revenue for the first nine months of 2022 reached $858 million, representing a 4.9% growth on a comparable basis [6] - Adjusted EBITDA amounted to $631 million, reflecting an increase of 4.3% on the same comparable basis [6] - Cash available for distribution increased by 6.2% year-over-year to $179 million [5][6] - Net corporate debt ratio stood at three times as of the end of September, providing significant financial flexibility [5] Performance by Business Lines - In North America, revenue increased by 5% to $324 million, while EBITDA increased by 6% due to recent acquisitions [7] - In South America, both revenue and EBITDA increased by 5% to $123 million and $95 million, respectively, also attributed to recent acquisitions [7] - EMEA region saw a revenue decrease of 20% and EBITDA decrease of 5%, primarily due to foreign exchange impacts and a nonrecurring effect from the previous year [8] Market Data and Key Metrics Changes - Electricity produced by renewable assets reached 4,155 gigawatt hours, a 20% increase compared to the same period in 2021 [9] - Operating cash flow increased by 16.7% to $516 million compared to the first nine months of 2021 [10] - Net project debt decreased by over $500 million compared to the end of 2021, standing at $3,946 million as of September 30, 2022 [11] Company Strategy and Development Direction - Company committed close to $150 million in new investments, including a stand-alone battery storage system and a solar PV plant [12] - The battery storage project in California is expected to have a capacity of around 100-megawatt hours and is set to start operation in 2024 [12] - The company aims to leverage opportunities in the Southwest region for storage and renewable energy projects [13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding the Inflation Reduction Act, which is expected to be a game changer for the sector [12] - The company has a hedging strategy to limit exposure to foreign exchange fluctuations and protect against inflation [14][15] - Management indicated that the growth outlook remains strong, with a focus on developing a pipeline of projects in the U.S. [35] Other Important Information - The company maintains a dividend policy with an approximate 80% payout ratio, subject to Board discretion [38] - The company is exploring opportunities with Algonquin as a source of growth [40] Q&A Session Summary Question: Do you have PPAs for the battery investments? - Management indicated that different options are being considered, including full PPAs and fixed payments through resource adequacy, both expected to yield good returns [19] Question: What are the expected CAFD yields from the new investments? - Management mentioned that the expected EV to EBITDA multiples for the projects are 10 times and 6 times, indicating strong returns [21] Question: Any updates on growth projections for CAFD per share? - Management stated that guidance will be provided in February during the annual results announcement [25] Question: Can you discuss the U.S. pipeline and interconnection challenges? - Management confirmed that the Inflation Reduction Act will help develop a pipeline of projects, particularly in storage and PV [35] Question: Will you increase retained cash to fund new projects? - Management reiterated the current policy of an 80% payout ratio, with future decisions at the Board's discretion [38] Question: What are the plans for the Lone Star II wind project? - Management indicated that the short-term intention is to sell to the market, with potential for repowering in the future [30]