Clearway Energy(US:CWEN)2024-02-22 17:13Financial Data and Key Metrics Changes - The company's 2023 CAFD was $342 million, within the revised guidance range of $330 million to $360 million, with a fourth quarter CAFD of $53 million [21][25] - Full year adjusted EBITDA was $1.058 billion, with fourth quarter adjusted EBITDA at $201 million [25] - The company reaffirmed its 2024 CAFD guidance at $395 million, factoring in current production estimates and maintenance capital expenditures [26] Business Line Data and Key Metrics Changes - The company committed approximately $215 million in new corporate capital deployments in 2023, with an expected average five-year annual CAFD yield of about 10% [8][9] - The company continues to execute its long-term growth targets of $2.15 of CAFD per share, reaffirming its ability to achieve 5% to 8% growth through 2026 without needing external capital [8][13] Market Data and Key Metrics Changes - The sponsor's 29 gigawatt renewable pipeline is developing, with approximately 7 gigawatts of late-stage projects targeting CODs over the next four years [22] - The company is focused on resource adequacy awards and pricing in 2027 and beyond, with strong pricing expected to drive value [23] Company Strategy and Development Direction - The company is transitioning to focus on growth beyond 2026, managing RA contracting positions and pursuing value and certainty to drive shareholder value [4] - The company plans to leverage additional drops from its sponsor and is exploring further growth opportunities through M&A and fleet optimization [10][28] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a difficult year in 2023 due to renewable resource impacts but remains optimistic about growth in 2024 and beyond [25][74] - The company is focused on improving availability from capital expenditures and executing its CAFD guidance while targeting a 7% dividend per share growth in 2024 [15][26] Other Important Information - The company has no external capital needs to fund growth through 2026, with remaining thermal sale proceeds available for committed investments [13] - The company is maintaining a strong balance sheet, with 99% of its consolidated long-term debt at fixed interest rates [25] Q&A Session Summary Question: Maintenance CapEx forecast for 2024 - Management explained that lower maintenance CapEx in 2023 was due to disappointing generation, and reiterated the forecast for 2024 maintenance CapEx [18] Question: Corporate debt to EBITDA leverage expectations - Management indicated that once thermal proceeds are deployed, they expect to be at the low end of the target leverage range of 4x to 4.5x [19][31] Question: M&A activity outlook for 2024 - Management expressed optimism about M&A activity in 2024, noting that market volatility in 2023 hindered execution [43] Question: Contracting open conventional capacity in 2027 - Management stated that major procurement initiatives would occur in late Q1 to early Q2, with binding awards expected in Q3 [51] Question: Domestic content guidance impact on project timelines - Management clarified that the shift of certain projects from 2026 to 2027 reflects a plan to utilize domestic content solutions and ensure project schedules are durable [74]