Atlantica Sustainable Infrastructure plc(AY) - 2022 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenue for the first half of 2022 reached $555 million, representing a 4.7% growth on a comparable basis [5] - Adjusted EBITDA amounted to $402 million, reflecting a 3.7% increase on the same comparable basis [5] - Cash available for distribution (CAFD) grew by 6.7% year-over-year to $117 million [4][5] - Operating cash flow increased by 7.2% to $264 million compared to the first half of 2021 [8] - Net project debt and total net debt decreased by more than $300 million in the first half of 2022 [12] Business Line Data and Key Metrics Changes - In North America, revenue increased by 11% to $199 million, with EBITDA rising by 19% due to recently acquired assets [6] - Revenue and EBITDA in South America remained stable, with lower wind resources offsetting contributions from new assets [6] - EMEA region saw a revenue decrease of 22% and EBITDA decrease of 13%, primarily due to foreign exchange impacts and a nonrecurring effect from the previous year [6][7] Market Data and Key Metrics Changes - Energy produced by renewable assets reached 2,647 gigawatt hours, a 33% increase compared to the same period in 2021 [7] - The company continues to achieve high availability levels in transmission lines and water sectors [7] Company Strategy and Development Direction - The company has earmarked investments between $160 million and $180 million for growth in the first half of the year [4] - Future investments are expected to be between $60 million and $80 million in assets under construction [9] - The company aims to create value through CAFD generation and debt repayment, reinforcing a conservative debt structure [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the potential for repowering and hybridizing existing projects with storage technologies, contingent on legislative support [19] - The supply chain situation is gradually improving, with management optimistic about future availability of equipment [27] - The market for asset pricing is becoming more rational, with sellers adjusting expectations to more reasonable levels [29] Other Important Information - The Board of Directors declared a quarterly dividend of $0.445 per share [4] Q&A Session Summary Question: Impact of FX on cost structure and capital structure - Management explained that revenues in euros from Spanish projects are naturally hedged by euro-denominated debt and G&A expenses [15][17] Question: Opportunities for repowering and storage - Management acknowledged potential opportunities for repowering and hybridizing projects, depending on tax advantages from legislation [19] Question: Expansion opportunities in Europe - Management indicated that while existing assets are fully contracted, there are opportunities for expansions and new projects in Spain and Italy [25] Question: Supply chain availability of equipment - Management noted that supply chain issues are improving, allowing for continued project plans without major disruptions [27] Question: Asset pricing and acquisition opportunities - Management observed a shift towards more rational pricing in the market, with opportunities for value creation in future acquisitions [29] Question: Impact of inflation-linked PPAs - Management confirmed that inflation-linked contracts will provide more significant benefits in the coming years, with some early impacts already being felt [32]