Atlantica Sustainable Infrastructure plc(AY) - 2020 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Cash available for distribution (CAFD) increased by nearly 14% year-on-year, reaching $52 million in Q3 2020, and for the first nine months of 2020, it increased by 6.4% to over $149 million compared to $140.2 million in the same period of 2019 [4][6] - Revenue for the first nine months of 2020 was $769 million, a decrease of 3.7% compared to the same period in 2019, while adjusted EBITDA decreased by 5.6% to $621 million [6][8] - Generated approximately $216 million in one-off cash through non-recourse refinancings of existing assets in the first nine months of 2020 [7] Business Line Data and Key Metrics Changes - In North America, revenue decreased by 2% due to a one-time non-cash accounting adjustment in the efficient natural gas segment, while solar assets saw increased production and revenue [7][9] - In South America, revenue and EBITDA increased by 6% and 2% respectively, driven by higher production from wind assets and high availability levels in transmission lines [8][9] - The water segment experienced a significant increase in revenue and EBITDA by 64% and 33% respectively, attributed to the consolidation of the Tenes water desalination plant [9] Market Data and Key Metrics Changes - Electricity produced by renewable assets reached 2,608 gigawatt hours in the first nine months of 2020, with high availability levels around 100% in transmission lines and water sectors [10] - The company closed the first nine months of 2020 with net corporate debt of $773 million, with a net corporate debt to CAFD pre-corporate debt service ratio of 3.3 times [12] Company Strategy and Development Direction - The company targets annual equity investments of $200 million to $300 million, with a strong pipeline of investment opportunities [5][14] - The acquisition of a district heating asset in Canada is seen as a growth opportunity, with a focus on sustainable infrastructure [15] Management's Comments on Operating Environment and Future Outlook - Management believes there will be opportunities in sustainable infrastructure due to global trends and government initiatives, particularly in Europe and the U.S. [28] - The company is optimistic about growth opportunities and is actively looking for investments to meet its annual targets, regardless of specific projects like the PTS transaction [40] Other Important Information - The Board of Directors approved a quarterly dividend of $0.42 per share for Q3, annualized to $1.68 [15] Q&A Session Summary Question: Metrics on the district heating acquisition and its relation to growth targets - Management indicated that the district heating asset fits their investment criteria and is expected to contribute to their annual investment targets, which will include both larger and smaller transactions [19][21] Question: Timeline for the PTS deal with Pemex - Management stated that the timeline is uncertain due to dependencies on third parties and conditions that have not yet been met [22] Question: Updates on long-term dividend growth targets - Management confirmed that guidance for the year will be provided during the annual results presentation in February [24] Question: Opportunities from the European climate law and potential new jurisdictions - Management expressed optimism about opportunities arising from sustainable infrastructure initiatives in Europe and the U.S. [27][28] Question: Acquisition target preferences and geographic mix - Management stated they are open to various sectors and geographies but expect most investments to continue being in wind and solar due to their larger market sizes [36][39]