CWEN - Earnings call transcript Q1 2021

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Operator

Good day. And thank you for standing by. Welcome to the Clearway Energy Inc.

First Quarter 2021 Earnings Call. At this time, all participants are in a listen-only mode. there a presentation, session. speakers' the will question-and-answer be After hand now over [Operator would to the Mr. Instructions] I today, like conference speaker to your and President Executive Sotos, Christopher Chief Officer. ahead. go Please

Christopher Sotos

Good morning.

join for Let thank taking today's call. the me you time first to

Joining Group. Officer; and Craig Financial our and our be will morning available me Clearway Q&A Cornelius, Energy presentation. portion is of this of Plotkin, Chief Chad CEO Craig President for the

assumptions which differ that Actual that Before believe we today's note well are risk in begin, based Harbor forward-looking contain results review as quickly reasonable on I'd be factors as Safe discussion our statements, we date. to today's as materially. like will this filings. presentation, SEC in the the to of Please may

non-GAAP In addition, financial we will refer and GAAP measures. to both

and non-GAAP to GAAP measures presentation. information comparable directly to our please most For measures, regarding the refer today’s reconciliations financial

first acceleration the notes. financially, million, by refinancing portfolio. projects scalable Texas, February page and effects diversified the X, our including Turning at interest benefits negative negative Clearway's weather impacts senior Coast demonstrating West and These the $XX to XXXX strong CAFD the of performance to due offset from reporting of of the significantly a negative were in accrued event the of quarter renewable

we on maintaining As our a result, $XXX guided at are call our million those guidance in February.

capital revolver on $X.XXX X% in green term was X.X% for permanent our during saving Clearway DPS at our borrowings As Clearway XXXX. costs. increase announced target upper share This our quarter the used new the were in XXXX due the to growth million corporate purposes. $XXX second and to for XXXX X% refinance in rate. is notes drove has of for at quarter, This XXXX. interest senior of X.XX% indicated bonds, dividends a while end $XX a to to interest issuance the million track bond previously, an able very approximately with million by per All long XXXX with $XXX we repay refinance attractive

entities profile but of current half adequacy goals load first only current years way long is strong of contracts, want to more is occupying. constructive strong step the is the this sufficient one with a ahead that as I the the tolling of reinforces to to to at Marsh Marsh serving expiration seven plant. capacity that existing Landing. key We merchant is debt new strategic Landing, and resource announce megawatts if of CAFD established important free future a the important economics year, XXX to remaining the than two than subject an this recall on we our XXXX, a this happy year to two have I'm exposure, a As the were years achieve still similar were tenor expiration expiry contracts these is in we reiterate, plants will It be pricing, for able in prior maintain at Not go. pricing debts contracts. materially – mitigating of middle and contract, in step our while gas to important to at the position our a the more of able to of secure the of confidentiality

as last quick-start all attributes goals. Clearway capabilities, California's supply its pockets. They're all newest These located summer. have strategically and assets California. overall ramping fast in Most Our California adjust to part energy liabilities was needs most in they of of asses, renewable are a critical make the gas importantly, some demonstrated efficient related of stack, load inside for and to major

assets, near growth to acquisition milestone of allowing Black which the the XXX is continue quarter, execute situated Rock the advanced project, Clearway. megawatt Pinnacle close we at renewable During We and our in your provide one efficiency ability locations. sites. a build-out to a and for In platforms these hand our geographic effectively key to three advantage market services is certain to competitive way

While our efficiencies achieving is success. operational critical to

continue to X.X on gigawatts, a Group years. provide be average sponsor, new co-investing gigawatts We approximately further Energy partnership of or additional expected certainty X.X work with Clearway between which Clearway tenor our diversify CAFD contract a to weighted with and will XX

development in In expect grow addition current the continuing XXXX. grow gigawatt efforts second XX is to Group half pipeline meaningfully Clearway we this to its of and

increasing growth in per detail objectives Clearways $X.XX pro outlook Finally, as supports per our next which XXXX. the we'll through EPS CAFD forma its discuss in to more slide, share, share now

five pro and and dividend page our per to color provide forma outlook. CAFD to more Turning share

within that growth our discussed, $X.XX remains California, our this assume resulting the our share that end contract as XXXX as natural to reaching maturity have increasing flexibility as the we outlook CAFD pro assets profile are long-term in X% recently a current investments made refinancing uncertainty. increase dividend to exposure We of now merchant we in CAFD X% that If assets forma the per from provides for mitigate through uncertainty, to share. can growth of constant, recognize the rate gas well CAFD the Given trajectory our we we in completed XXXX.

while period company the achieve our targets cushioned growth of DPS the CAFD this per time. maintaining through reduction share the against ability Specifically, of in long-term $X.XX, has approximately to

and share, a end growth low Energy dividend at pay X% per of our ratio, share to per to with CAFD which example, dividend $X.XX XX% Clearway the objectives of in fall long-term should of of X%. line payout For $X.XX,

Clearway drop In note that include third-party for investments additional forma the M&A. not does $X.XX addition, please CAFD pro downs by further outlook any and

and execute, over growth in the to and certainty the company growth per increase around future visibility dividend trajectory. share, around as to the CAFD I'll that, Chad? that continues as to hand well adding Chad. So, With summary, presentation

Chad Plotkin

renewable results Coast reporting these February came and and West in impact the Though financial distribution slide our in at Chris from in of portfolio or adjusted negative Texas. higher excellent to overall unconsolidated below on $XX available financial quarter Thank cash we Today event seven. distributions million is to turning offset substantial provided EBITDA of view $XXX expectations, winter you, a performance Clearway first million. favorably for production investments from our as the the CAFD

above On the winter Texas up the expectations. the scale quarter had impacted weather the production the performance favorable based was in conditions West to these renewable production effect Alta solar to same Midwest, that Coast prevailing in creating conditions of relative California, the positive in projects. of for Similarly, utility wind lead the wind project where front, over expectation XX% energy in

in we in to the February previously estimated narrowing range $XX $XX that range. approximate to had the realized disclosed, EBITDA Today, due On $XX $XX to million company as the we full impact million million to an fully winter year to Texas CAFD, attributed adjusted million and be third-party to million in which event negative $XX the cash the as first million to given in effect from impact side, impact are to resulted quarter, approximate equity amounts revenue. consolidated an $XX the the on investors,

continue green That on there potential ongoing to the our continues long-term be material best information, in event, we dynamic range the notes. the and a issuance and noted implications is based do relating which of some on has the the to due company XXXX Further of what the quarterly February While discussions impact bond, to successful of results slide. the currently passed. said, to impacting we repayment Texas the narrow the the informs outstanding exposure, XXXX available believe cash timing additional for plan was on senior

perspective visibility expectations, section of second in $XX pro when the timing of payments refer have normal Slide made seasonality this Because adjusted million of accrued in corporate cash for was roughly quarter the the changed, Please as of to for were timing forma in into of our the the that this the you into disclosure, would first change is payments, normally paid disclosure to in to interest of to accelerated interest year, this cash Texas and interest expense reduction some seasonally XX favorable appendix CAFD Specifically, quarter. quarter. quarter the material this the this in earnings presentation modification. we the to event, expectations. account low quarterly improve been winter updated million February, the is to if been have on first excluded pro That part modified would generally most $XX first the quarter I in quarter first as approximate and performance, referring put the to quarterly generated CAFD third second quarter realized and from would the companies CAFD remind said, that In we the of update. a forma

the call, interest Texas essentially was As by we contribution event in February the the year a full effect Caliente. quarterly closing in respective last noted the of indicated of the in offset XX% Agua from that

the Today, event median investment. to to currently guidance energy seasonality for forma the million, closing again effect With Chris year. to scope on PXX favorably year. given for company we for we we not outside the I'll the the that be do did time full full adjustment trending pro Texas at remarks. we range, that, view expectations as sensitivity our for continues raise renewable year So at account full growth to achievement that guidance the But the the maintaining know CAFD $XXX of PXX which based production CAFD consolidated the our the to back and of of outlook financial of since financial call normal his turn our is are

Christopher Sotos

Chad. Thanks,

the our on difficult XXXX. million Despite winter we CAFD weather February, X, are XXXX. event for shortfall Page to goals of we Texas guidance Turning maintaining the through focused in for of $XXX our are

significant west diversified and renewable first scalable coast mitigating the quarter of Our well portfolio, impact. particularly performed Texas portfolio in our the amount

remain DPS upper X% we X% the XXXX. In on achieve rate to our end to through of addition, track of growth

of increased X% well through our per per XXXX. a as runway toward as share investments, $X.XX, which activities, provides downs, dividend drop share refinancing M&A, growth achieving we forma to our pro X% to and through result a have As growth strong outlook third-party our CAFD continued

end work outlook. with forma we opportunities, transaction to continue signed year. working And to to co-investment the our new the pro additional expect see increase CAFD by sponsor, this of We

of Portfolio. to we're California our the enhance Natural Gas Finally, working value

two lines on value and from will for contract proposition to you. position way go. Operator, price point. make the attractive continue to Well, I We reiterate have the we and the tenor region Thank anticipate contract more gas years. open closed a that few current our in XXX long progress megawatt And over than next we questions, out the first expiration, have years that in please. our provide. this assets I

Operator

question Global the Angie Seaport of first Storozynski line Our Instructions] with from [Operator comes

Angie Storozynski

guys. morning, Good

Christopher Sotos

Good morning.

Angie Storozynski

Resource you Adequacy So the fact this is on of concerned. the again, much big. outsized really maintained, that are you But on being know, again, CAFD congratulations is contract. the That's, provide returns didn't

be to there's of timing for could again, or when the any of to expecting and -- those RA remainder work as contracts more we said, the sense capacity So signed you there Is come. the renewed? be

Christopher Sotos

of cadence. optimize disciplined because our to on think Ultimately, from try price. be we have sure the started down negotiations reason is to flexibility early make view, to Angie, I we really and

oh, I I've don't to going a it's going of time. take to want have other spirit done be say, So we're while them a Because to different to indicated calls, a it's by on I variety think as of going counterparties. all and

which not. say, or position there's date So by, a going a well, we not we're specific to have

We out I years that from two of are, period time. as stated

to So working it continue be it some but fair will question. making to we're your time going and continue progress, on to take

Angie Storozynski

not the performance unchanged Chad, CAFD Okay. for about against sure question is guidance. I'm comments second I understood your My

CAFD you're trending guidance renewable Texas you're it for entire even still with of the the So incorporates well still year, right? CAFD So even that's guidance? though does Texas trading, at of hit, still the peace right? hit, assets CAFD hit, So the versus the incorporate performance the with all

Chad Plotkin

Yeah.

was think it. price really because our happened year cap. think normally part the it about the the had, it our look pay at the would how way I excursion I way that we the in to variability about of with of offset is issues in why don't Texas bear relative think being think So hitting mind, said, But in we that the I is we Texas, which about it

interest. in So basically, shift we have obviously, a timing

the have position, had eases first better $XXX trending existed least the performance to we two lead upside Coast favorable it. So that may us the events through would has base before portfolio in in so West hopefully a Said those million, the at in quarter. out way, another us than that strong

remaining quarters, Assuming the ahead $XXX technically we for three be at operate your you of PXX million. would

Angie Storozynski

you make up. That's Yes, great. to what wanted I

Okay, thank you. Good day.

Chad Plotkin

Sure.

Operator

Your of with next the Pickering, & Co. line Tudor, comes from Holt question Bean Colton

Colton Bean

morning. Good

would that So just came can any together? maybe the there to with characterize how Angie's agreement, counterparty around you follow-up RA March how And on the is question background on lending that? offer you associated there

Christopher Sotos

is fix Sure. the This compensability.

your but talk a in efforts So probably have not can this XXXX.So to position California ongoing we about, lot our I origination in we manage talked an a would be in question. look RA We to in add between counterparties. over position SAE, may processes the that of to at the we're and number very time. market and and be future PG&E active coming looking There's

this go, talk we're And think is I've that thing lot rated. typically grade larger time years. -- one confidentiality three agreement, that of two that, some some of give serving about the I we've looking I yeah, think, years, the the ahead over people I would From in color, at of want about I entity indicated, about the view is load about So region, to over sure make in as -- color lines they've terms the of hedges. spring stay talked but talked our something a years within is and timeframe it's along the could I definitely you, yeah, I give confines on investment a the expectation you it. to that And the of years can

Colton Bean

commentary Group expansion projects an extending the in an that Clearway back in aggregate, pipeline or is on in Got half bucket? is advanced And then that Understood. more construction of it. the moving the to year, some

Christopher Sotos

don't why that you Craig, Hey, one? take

Craig Cornelius

to Both is the the answer Yes. Sure. question.

west, projects So we and evidence we're vintages on as constructive substantial end which sustain growth and this and growth also that country, and We've reported share of work, the development the of XXXX that about vintages extend see disclosure, to of XXXX this dividend XXXX busy that decade. capital feeling planning three been been quarter. regions. that through for per plans our the the should the a into support volumes late able shape XXXX provide And for We've eastern the we will past We've we state company commence up that busy our Inc. will and as us ability growth. of period allocation from The underpin Clearway constructive are which some well what the the developing plans of expect about across give with advancement the year. well Energy, confidence the facilitate was hopefully be pipeline course central next ability early the for pipeline match as completion construction the next in years of particular growth outlook or sustained over some project time, to our quite that that vintages. would of in year and the to looked to to that you'll for

Colton Bean

time. the Appreciate Great.

Operator

Your Rusch question line from comes Oppenheimer. Colin with next of

Colin Rusch

the in pretty relative have little Thanks have and storage energy here pipeline, of so you products about looks much the you it substantial the volume in bit pipeline? that you Can the or the products in a talk existing guys. a had like trending that's some the growth how quarter to

Christopher Sotos

online? he is Craig,

Craig Cornelius

storage, as within resources existing as includes we both to construction And in make where and include investment that well planning instances new to hybridization look have that fleet, assets allow for so. plan market Energy, operating storage, we be standalone of development in growth The for of have Colin, and would for contracts, for type the the would Yes. to storage. the some Clearway paired Sure. new that revenue both put planning profile, consistent for in Inc. started with place us we long-term structures solar

course the the longer. facilities expect this Inc. for really that paired appears includes east battery options construction stage third of new we're over resources we're point, everything those So existing for any latter out west, within storage the years, through projects. for The potential well both to if as of prospect is storage strictly be early In Clearway that we planning that something But integration. evolving. general integration in the front, development decade, it's most with in still of not And it next on in the looking the as you at in and putting three standalone resources. California could look Energy, part for of is the operating attachment as

Colin Rusch

pipeline. the to really I'm commitments corporations. being And in an there's many I second helpful. is if sign with able by And massive counterparties. to guess, development get large in that super many, ability That's agreements terms We're to guys bilateral and changing around the your made of that pricing just net rather corporates you to thing that's with than wondering And are evolution then, if zero, seeing capture some utilities. of dynamics spread

Christopher Sotos

probably little corporates team Lighthouse and it. the what has you’ve that as seen able corporates with been to-date to in transaction a CDC that worth, For part that some the it's has shift bit of sign

color, print governance [ph]. any changed if Craig, as -- Biden the Now, that's there's additional post further since

Craig Cornelius

customer in projects long about base for nearly pretty West able and with contracts And also, pipeline our like. settlement that those very worth sign grown we customers of structures for that are materially meaningful three still. contracts a mean, we've are includes for think market like I wholesale already And we've we customers X.X Colin. five tenders the where, to last disclosed, Pacific us a is say, in Yeah. particular, also that in they've of of companies states, And something to gigawatts that expected stage real they continuing because to in said, we years as be commercial-industrial Yeah. late are bullish, they've well, origination or historically regulated gigawatt pipeline for made point direct us, companies over -- pipeline. with California. the and a I of who've been are for where commercial-industrial participant, been been With to expand of a that's example, also over, less that Northwest, fraction utilities, that our mainstay the focal I'd

I as of for to one expect us track of we X.X So that the in forward, allow portfolio we'll for a yeah, with to record go servicing sign continue to we've great the been tenders development. utilities that our already. able a be whom profile Chris customers X.X built to both also gigawatt think commercial-industrial we to grow for good a we with with but up balance And customers, the longer that that described pipeline, have contract us have balanced create demand, like

Colin Rusch

much All right. Thanks so guys.

Operator

with question Lapides next comes Goldman of Michael The Instructions] [Operator online Sachs.

Michael Lapides

guys. Hey, oriented here. probably are My questions chat

term you took Just relative structure, bond you term when capital interest debt that out, green at see interest a to expense? curious, you lowers other the opportunities make the do refinancings on costs could long long material impact look the for significant

Chad Plotkin

one, that think level at shortest Michael, was notes, we think, corporate the the maturity capital in when is stack. limited, I the refinanced because had Yeah, XX I the opportunity we somewhat the

think the I -- of So corporate we're level at kind think we've side, I optimized.

think, I have I we opportunities looking we're few I at think, to are project the over think and always have. defined Michael, at they project side, Chris level the see the mining years, I it way level past what -- always the

be I to improvement looking. there but count se, items add will per we think I the on to and some always people from materiality of pop that sort not up. But some so going that sit always there's would sure additional I'm perspective, that there,

Michael Lapides

equity? your of recent Thanks, your or One all stocks the either, And the third renewable you that couple Chad. impacts from sponsor? or of how parties move last financings cost Got the are mean, How really, of How -- from other months thinking future about given equities, in dropdowns the you acquisitions errors? including whole I related team? item, it. for over are

Chad Plotkin

very is Yeah, I think Michael a level. still constructive

I if sure, over good let's the pretty by of think, But number talked actually when this it's I say about years we divided about since May for took role, take XX.X. $X.XX CAFD think and you a where for the sit. we've XXXX I yield

for yield, apples very a apples, You use once equity as get want pound dizzy, still whack but yield. a constructive there's about, you to to CAFD a know, you a Xs that if proxy CAFD mid again,

behind a so no see of acquisition of very still a will effective it, CAFD well be think for question long is, ask, which viewed yield dropdowns. as I way And saying we

Michael Lapides

appreciated. Got it? Much guys. Thanks,

Operator

Your line next question comes with Keith Wolfe from Stanley of Research.

Keith Stanley

Hi, good morning.

the Just one for sizable company. business thermal the sale business question. pretty We recently, saw smaller a

company? how value about Clearway? how And do strategically So to within you about would that core the Is there? think think you thermal

Chad Plotkin

always in Sure, value shareholders. of drive kind I opportunities know, the to dispositions assess for mean, as portfolio previously our We've you Keith done for past. we

I think there's at that monetizing asset. look no to need

in I We district a to US large think, energy perspective, is the the know, one only business and portfolios interesting energy and think class. a a us. infrastructure From the prices there that premier There's in are of you great our them. portfolio asset three it's district out are assets. we are of market great

portfolio in be quite we'll from that. there's we be think think, us, going discipline. But to we're at I for to So extremely interest that the view, evaluate --anything can obviously look I and have

Keith Stanley

Great, Thank you.

Operator

At this it for turn time, there remarks. are back no further closing Sotos questions. Chris to over I'll

Christopher Sotos

for you thank everyone Well you. appreciate time Thank support. your and the

Operator

call. Thank gentlemen and you, today's conclude conference ladies and

disconnect. now may You

Clearway Energy (CWEN.A) 6 May 212021 Q1 Earnings call transcript