AY - Earnings call transcript Q2 2021 | Atlantica Sustainable Infrastructure plc

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Operator

Good day ladies and gentlemen and welcome to the Atlantica second quarter 2021 financial results conference call. Atlantica is a sustainable infrastructure company that owns a diversified portfolio of contracted renewable energy storage, efficient natural gas transmission lines and water assets in North and South America and in certain markets in EMEA.

Just a reminder that this call is being webcast live on the internet and a replay of this call will be available on Atlantica’s corporate website. Atlantica will be making forward-looking statements during this call based on current expectations and assumptions which are subject to risks and uncertainties. Actual results could differ materially from our forward-looking statements. Risk key in incorrect because our today’s factors can including on our other because of found latest of the be Commission, discussed, discussed of all with factors earnings the and report any and assumptions and website. the or are of other accompanying filings If presentation section Securities in Exchange Factors our presentation, which or of undertake not update duty any statements. does Atlantica any to forward-looking

Seage, call conference Francisco are today’s and for Santiago CFO, CEO, us Joining Martinez-Davis. Atlantica’s

As the will of I conference open over sir, the the pass session. Please, to now usual, Q&A go end at call, ahead. Mr. Seage. lines we for will you the

Santiago Seage

joining Good remarks. few second for opening our call. with morning for quarter a and thank us I you conference will start

half million. we XX%, During believe CAFD of what we performance XXXX, $XXX a to growing close this to had year is close have strong with to the up first

board share, have successfully corporate dividend million XXXX of to quarter from quarterly to green directors issue a we Following of part extend during us second to maturities able that notes additionally that, been in and XXXX. our this declared per allowed $XXX $X.XX our of have

XXXX. plant a in good results. closed progress XXX a and through general growth, will our making take believe Francisco, you in our turn in announced I we who wind Regarding now over renewable to financial the energy regarding we for portfolio two stake previously in a megawatt have the investments, year, this will California contracted XX% call U.S., plans so

Francisco Martinez-Davis

increased which and impact affiliates XXXX represents basis EBITDA, X.X% foreign million. on our statements the excluding half the XX.X% up exchange comparable including you $XXX.X in will renewable Revenue XXXX. to turn everyone. first our where half Santiago non-recurring unconsolidated first be key X, and Adjusted by to of see a you reached Thank morning No. Please good able growth sector. of for to financial a in million, Slide $XXX.X

of XX% $XXX.X half for to close in Regarding cash an the generated distributions, first we year-over-year. available million increase of XXXX,

by [indiscernible] sector, increased higher America thanks compared in and Spain. America, EBITDA decreased to XXXX first revenue performance increased to our X% radiation, by new recently XX% also In X% and by assets while half increased by to $XXX.X and respectively, geography and and half X%. in Regarding radiation solar EBITDA revenue to in the acquired XX% of first investments. solar EMEA XXXX higher in due to higher the thanks revenue recent assets, million North the region the EBITDA by South of

Regarding results by reasons thanks mentioned. business sector, the EBITDA X% increased in renewable sector, previously energy, our to largest by

period the was of turn of will recently to The via to produced No. EMEA an XXXX. Production half review also radiation was hours renewable X, operational acquired. in to performance. XXXX, gigawatt the solar let’s in and compared largely Slide Now assets in America, first assets of our increase XX% where Electricity increase where X,XXX due North reached please same the higher. we contribution increased

lines transmission natural contributed water availability-based of and achieving the Looking at availability in have half gas high our XXXX. contracts, efficient to levels assets first

let’s cash our through to Now No. to walk Slide move flow. X you

impact in that positive XXXX we includes $XXX closed very first for a half used million positive million in repayment Financing was XXXX significant showing million in impact the XXXX. extending XXXX project in for from acquisitions issuance Financing includes million closed scheduled to cash the of to cash The raise note during and reached first dividends million, consolidated the of notes from half flow decrease of the the working maturity cash issued to $XX the shareholders an the half first XXXX, approximately of same the of of $XXX million of XXXX Investing of and second for the corresponding $XXX cash period. thanks XXXX January. for $XXX our approximately the green the reflects first period cash flow is million. of flow half improvement all, equity flow the mostly capital. was Our $XXX change paid operating versus to XXXX a tranche interests. facility, million $XXX net to of of increase All variations prepay also the and in a in non-controlling $XXX May

With after No. of position. million On closed review would like our debt net for net of we the We corporate the debt acquisitions X.X project X, slide, $X.XXX as half was recently most XXXX to service debt XXXX XX, with at the debt pre-corporate ratio debt first CAFD we paying to $XXX next of billion. have at corporate Net June times. announced. that this, net our stood

back me the Let Santiago. turn call to over

Santiago Seage

to page, X. Thank last you Francisco. Page the turning I’m

on strategy, we As target investment Obviously previously growth several of the exceeding announced, growth we energy the have acquisition closed had working part of assets our the renewable opportunities. we year. continue a forward, the Operator, number growth as of to for that ready for are we and With delivering going allow that, should on continue remain believe we questions. us opportunities growth of targets we opportunistic regarding

Operator

open. Quezada, is James. your [Operator ahead, first today instructions] the line question David Please line comes from Your Raymond of go

David Quezada

thoughts like here, respective Thanks, in but hands. has like at there I’m just renewable for in they’ve growth region PPA portfolios falling fair on hot time, everyone. specifically. a M&A Spain markets, been first same growth it’s your amount prices but questions the the been seem My a the of It in also pretty changing for market good recently, morning on your interested couple outlook seems

see your kind there there, Just for Atlantica if thoughts what us today. of give could opportunities you wondering you

Santiago Seage

David. good Great, morning

right have would it’s of we hot a at we who who part we so players the so if with agree present, work, want are significant right all will ahead, with are summary and time although been have prices, as find you numbers a that opportunities. we see at we you Regarding the disadvantages and been Spain, continue numbers only we be continue If numbers, market, point looking synergies, obviously probably always in being might and the a market, opportunities would if meaning market at probably with sense. going but the made, opportunities looking many will advantages invest where always, we we so to the a other regarding we go position, this aggressive the very there hot know, have and of short market like forward make

David Quezada

obviously great big plans about news of thank Okay, you. just a color, renewable That’s thinking lot the and lately infrastructure U.S, there. about great. Then power

in market. outlook? Do see primarily in outlook there at it more things obviously, so U.S., of active, far, that quite the there terms of been looking changing you being the in or been you’ve that already is considering primarily You’ve terms on quo the M&A status for in opportunities, you

Santiago Seage

specifically expect continue assets, now No, development, growing if North market opportunities in growth the a U.S. to is very lot so spending all very and see us, we active. for America be hands, we forward changing the source and The we significant going and want including operating you do different of from by large do owners a in keeps do so a mainly sell selling been we few are the us. opportunities to see own, they opportunities different of of believe of to current like are assets going continue next and we time opportunities lot and years different that markets things what that players lots continue will the and looking or because around have on U.S., within we of creates to phases, for

David Quezada

the U.S. question you. on Thank quick just recently. wind a Then excellent. Okay, acquired you portfolio

believe I asset about talk think how acquisition now projects up that that XXXX. curious about closed. I just you has could go for of that one PPA in, has if those potential re-contracting it’s or coming I’m the re-contracting a could you

Santiago Seage

full that. life that new different, in life and as shorter Yes, we has longer, the be there’s very of could in shorter strong at good about in to the how of might our not the going contracts, in be each re-powering through assets. it the so of about it but other are asset, worried contracts PPAs, portfolio, each be you the the some answer with might extending of regarding than significant or we all. the extend cases upside the in re-powering, and cases we usual general some off-takers, are In of states, asset answer that simply know, situations, Obviously a those believe

going prices, On the on partner, do our contrary, need to by to we what forward choose to we in it’s re-contracting we think to going events than ago that. have able in each the benefit that markets that obviously I options I that sure behaves is four think what depend different number case, today state and be it’s going going be of and probably are is assets expect a forward. with we and helpful, best each In six of advantages going of sector tax be meaning the to to the and make the recent how reasons, outlook months for from better any that

David Quezada

is impact Okay, I’m wind attention Maybe to from just costs a just and are lot We one we’ve see those one lately. me. any today, elsewhere of in solar you result if know thank excellent. last your of a topic that That’s color, contracts getting great you. I the inflation of know of to some indexed and curious your all but seen business almost inflation, rising as

Santiago Seage

the we know, existing heavily believe against contracted as or are you have better factors protected mentioned, well so worse, for are we escalation portfolio, contracts No, in company, within you we a so we many as inflation.

advantage companies of a U.S. with on your that exposure very elsewhere. our inflation happening other low are very, like again the significantly you assets, we is is is construction probably new in the impact disadvantage the proposition now, small, and or to typically that than in colleagues risk or lower us value For cover things and so

David Quezada

perfect. I’ll the in get great. Excellent, That’s queue. back

Operator

you. Thank

Bank Your the is go your from Please new of line Julien Dumoulin-Smith open. question America. line comes from ahead, of

Julien Dumoulin-Smith

maybe. morning team, or good for afternoon good opportunity. the Thanks Hi,

Santiago Seage

Julien. morning Good

Julien Dumoulin-Smith

that value are implicit re-contracting a think North and expectations do more bit, B, and some perspectives. about the of just shorter you how that, terms you you A, maybe what on find that, the little little competitive, about Good on deal, of can morning. if thoughts Perhaps about markets follow drops expand in tenure means therein? a think up Obviously bit do just towards American wind deals; latest you opportunities signaling here to the latest how and future here, but

Santiago Seage

I don’t previous Actually, different. has fact one the one XX-year transaction at signalling think each so a California, shorter PPA, that in was specific no PPAs, is the there’s situation all. the that

of few go whether key be some and we is are be we As with with knows? in different What but work each a significant ball, should assets their PPAs to different there happen is in those you road. the it’s is because and the shorter states, with could that long before, is parts value competitive to for important, some there’s situation, in a without four production We or re-powering end the very whether of case. is work markets full sure situations, PPAs PPAs, the difficult mentioned specific that regardless us in that the life. are there going know, today in a scenarios, is change you, going years for slightly to of Julien, know of situations of that to this that to to different PPAs the to What situations asset extremely each be shorter creation who an would it’s as different In the down each I or subject be don’t doesn’t can that in signing us whenever a doing numbers numbers that the the come anywhere. crystal a merchant, identify be four making tell other numbers work whether will might those I asset able four in re-powering dynamics any going so what have mean

created you of or are We We is bit are investment point there of trend portfolio, anything. be was rest not in of know, so we signalling our about than to that I view, being average think from that The felt value just worried that, continues years, here re-contracting. the the different portfolio. an a don’t as the XX a

Julien Dumoulin-Smith

as about well, west portfolio Understood, a Coso you frankly, question fair here, your as enough. about here extent underlying just expansion opportunities the especially drive that desire assets expand - vis-à-vis and in you possible? A there. adequacy quick just think very think any your their obviously out set-up in considerations Does to interesting existing mind, resource or, reinvestment need as related just to

Santiago Seage

made yes turn in of at adequacy to we meaning need desire the the where we can your that that California product you is we of need would be probably would product this little asset need Yes, so the help look you point a you so to forward hours, bit on resource have all answer the investment love to and of in sell and well, your number from things very lights California, specifically a believe fits to to reasoning, at XX questions, view this and southwest. a to look invest more following going

not in so We at specific have whenever clearly there to synergies, there about would only synergies. be critical in expand this to growing at too continue the some that, operating mass, opportunities point to it’s probably some love commercial are in southwest, be time are California. to be assets comes, some We looking time able we’d soon the but

Julien Dumoulin-Smith

can what’s well. and maybe in if status ATS it an there, just understood. I sneak the update Last Yes, there, question PTS, as Excellent. here, here, then

Santiago Seage

so in in PTS, we have simply that any or quarters. the hinting and have without it’s positive case for you been not we and will project exiting anymore, financing, The as does asset closed, criteria we an our not growth see as project. we portfolio left has the therefore few have disclosure, not a the longer with so of and impact, agreement least the our Yes, partner reached part meet that at be could financing are negative

Julien Dumoulin-Smith

ATS? and Right,

Santiago Seage

sorry? one, Which

Julien Dumoulin-Smith

ATS? offline. Sorry, I’ll take it

Santiago Seage

Okay.

Julien Dumoulin-Smith

thank guys. Excellent, you

Santiago Seage

Julien. you Thank

Operator

Thank you.

ahead, Stanley. line open. next your Byrd Your the Please Stephen comes from from question is line of go Morgan

Stephen Byrd

Thanks my questions. afternoon. Hi, for good taking

Santiago Seage

you. Thanks to

Stephen Byrd

just cost of sense a been that in re-powering is through on thinking in that future, projects opportunities benefit, some that asked. build a be bit the is have the impact? an that’s for guess, installations. offer actually may potentially the ways, for you couple area could questions re-powering then face even to of I re-powered cost in cost about greater new in compared quite of environment a where wanted than Thinking really issues, that I inflation the product the seeing re-powers more advantageous as cost practice Could really new or you beneficial typically are lower completely escalation essentially an to not that

Santiago Seage

difficult going sure myself, not how at I be regarding this be to question. be to and not for so speaking precise it’s your how think permanent of think least I’m very is going is to much much permanent, inflation I

PPA prices in during probably many that in some for described, because quarters trend, I cost I happened meaning - As winter, increasing, should would increase that of only PPA I you also also of today, agree we see situations and probably the explains where but with be like to Texas EPA what I not prices terms inflation you think a be trend, than the settle. think prices that PPA should too should positive be where costs few need inflation that draw and settle higher one the positive increases, It’s but wouldn’t the conclusions. wait

it’s to for PPA wind are where costs solar today few and today. be that to from think quarters prices are land to and going difficult going where I exactly a see

Stephen Byrd

in to of the services you around provide a thinking seeing storage technology that. cost thinking the technology, customers. on question How about terms interest set? storage, grid side also over better helpful you’re make that that terms - am you’re we’re seeing. product about a and in to providing issues opportunity the what world grid sure want reliability, grid maybe storage reliability, building for are reductions that have customer your just about both footprint. storage know, a really semi-firm curious That’s really fantastic to but I opportunity potential in you I noticing get reliability on Then feedback on with for just all of you I’m

Santiago Seage

over you I going think for where geography, seeing answer what around states Obviously are are batteries, geographies pushing so general are this by power. describing, five make In is already the that forward. are around important going different problem, tend you for cases, and storage the we growth we’re a around is is reality seeing I think and firm today to be be in next more bit are guys to to seeing solution quite complex. you growth they think to regulators witness many years here. extremely and regulators changing to significant sure are going all power, where about as this batteries significant the get going firm The regulation the that probably you more

flavors that we of that five that many and or going years, are storage. to power, times are going On need There going be we believe providing regulations now longer I I kilowatt power. we to technologies, batteries but see starts to firmer really and next of is to XX our selling still to sell see are happen clean clearly a and in But the different are different many able see going it’s how in probably think give significant not see to new lots around do dispatchable things percentage to combinations plan are Probably think part power. can be we the of solutions other be power, other investment to that only side, of over, you ways we are to to of we about storage going firm there, technologies dispatchable offer around the are storage and hours going storage. our geographies to to that of be there.

Stephen Byrd

these about the makes like there lot more following contracts and you and risks up or firm that think be of will of That’s delivering on really Maybe helpful. will firm risk-reward in words technologies could sense your evolve those just or firm sounds it a when of risks moving that, that for semi-firm, you semi-firm types various into semi-firm, can feel be those other of with experience, structures? the given favorable storage what comfortable contract given or sort do,

Santiago Seage

but answer achieve risks are in that taking to able be do risk. believe because investments some personally our I plan some be that to need and going on that investment be risk some I fit point to profile, at some discussing. the discussing, are of that by to technology believe this My time there’s are in are a players pioneer trying you there yes, we things some we would you to be not those market what but careful. is obviously significant

and sign it’s We a of put discovered but they a people situation, get an and be different careful, cannot you Texas assess doing to so hedge have we’ve you. to to you need long saw PPA. any a to in You is is Storage we risk clearly to be in yes, where you you are it gets that complicated. what you front careful complex more been more PPAs contract the because not in many this need agreement because understand area to it order believe but the enough need signing able be taken, risks manage

Stephen Byrd

Thank you much. very That’s fantastic cover.

Operator

you. Thank

the Tudor, line Your comes Colton ahead, is Holt. of open. from line your of go next Pickering, question Please Bean

Colton Bean

Afternoon.

on up solve investing storage that the you could to follow technology discussion, to Just types on in you consider component? expand would storage of which

Santiago Seage

we let’s example, Yes, our have, point batteries. in are one say, technology of comfortable at with battery from and a assets, view a this we of in equipment, point time for

Probably technologies point feel obviously, prove, point or in the proven. is been including at technologies will time, technology we from low mostly they view, this things fully considering other storage storage, where, like we as it’s thermal of batteries that other a have that be forward, they providing enough. Going risk

Colton Bean

looks there, but question seeing and Spain, you you us the you’re can have market. like so what follow similar in become Colombian just competitive, up Great, on one increasingly the recent just auctions on a to received update then It country? on to

Santiago Seage

is a us, Colombia new Yes, know. for market as you

time, a think It reasons, renewable We years energy making from view. us, a want but never down, with our Colombia options Colombia, of first including regulator’s let’s auctions huge That companies grow so PPAs reasonable attractive at will be the market last that the few that becomes able market We is don’t low We pricing you in price grow to numbers, about but might point we coming prices from one intend a that market average have the the in government point most point now. in an the at in huge at We visibility coming as time. tells us. are be you but portfolio you today some to investments be, private for want still management very are visibility it a do to in might those have today, attractive sign market to of still say, be where let’s run fact the an penetration the market. have over next number by, for private say. the so see time At and of us of for PPAs not it’s this we market, this don’t of Colombia have where enough. indicator you is that been might is

Colton Bean

Okay, final XXXX? characterize opportunities having that’s continuing Then your Would XXXX beyond, growth the could target. see through primarily you as we balance a met or one, to additional existing helpful. just mentioned you those despite investments of or quick pursue

Santiago Seage

precise. It’s to difficult be

when run might than with opportunities, end was opportunities the internally. target, be it that are deploy you a we do XXXX. still a more the it don’t this XXX when or following you working. nap year get million and so shared use to we until we investments $XXX we try closing more Internally, take But year, you to try for attractive up stop number, continue to continue--the we we see we your when be we more for the for that target capital We us to models might

Colton Bean

Appreciate time. it. the Got

Santiago Seage

you. Thank

Operator

Thank you.

your Please question line William UBS. next the comes open. go is line of from Your from Grippin ahead,

William Grippin

very much. thank you Great,

development with a international that structure growth, of laid you terms one be the bit out here opportunities. any tiers arm and there AAGES ownership of that growth of three some strategy in might the coming, could was is you I the parent development help just accelerate changes last talk quarter potential could the if about the First hoping with

Santiago Seage

have you structure With In a or anything control don’t a as of growth and of shareholder. that. agreement. one we like ROFO It’s AAGES, know, their AAGES, our shareholder we sources not are we

a partnership. good We have

the we We that case, being that. them cannot any at and a time continue think the we to, are lots to able at opportunities case, say, share to lots which working the opportunities, but night starts point as at all. grow referring presentation easier, be we’ll it’s expect with you where keeps that through us is be of year levers, AAGES on enough and you awake happen, I we XXXX than things that life this number if something so with not are doesn’t offers In precise but of in that tried us I let’s be have growth to other of results levers, more in will the presentation if

William Grippin

on changes more but the market, if wondering is acquisitions CAFD maybe one then U.S. any might to specific and little a could it, you be that new just in comment seeing. this you Got for yields

peers I on Could what historical X% just recently we’re seeing at you there? used yields yields of CAFD have acquisitions announced think to seeing. you’re your relative XX%-ish that comment to some

Santiago Seage

I No, referring have you where they announcement interest are, surprised. seen and I to think rates that not are with the was I

are are invest our looking same. expect don’t IRR, will access case the been probably term we opportunities yield, are we be In lower, enough everything the an investing the what are, rates end anybody we look yield with a some case, better I create in we able spread, so that if as is CAFD but that than cases are referring public then X% know, I’m where up have that numbers to. that yields different higher, of if I in not not forever I have that an CAFD case, our only our primary shorter we metric think some not advantage interest you geographies, make so in invested CAFD but so that investor have think I at and term, U.S., we an in long numbers to we can the and would exactly company, bit in in surprised. think want there probably is sure probably to obviously we In were the you that I surprised numbers a at even some cases, bit value a our that

William Grippin

the right, All time. Thank you. appreciate

Operator

Thank you.

reminder, would like ask today, one telephone As please star to a a if keypad. you on press question and your

Your line of Please comes Yves line is from ahead, next Siegel question Asset go from Management. the open. your Siegel

Yves Siegel

thank came moved has bit. Can the you question afternoon, about is leverage thinking margin it up on? quick little One Two you. term? Can questions. The looks Good targets that like longer a second down talk a you’re what EBITDA your going talk and is bit. you about what’s

Santiago Seage

than two quarter, quarter. the this closed the number previous we as higher large is leverage, regarding so investments Yes,

not--I Francisco, know, Our is region, the versus CAFD continue of in where to that would we probably that’s three-point-something debt in are, terms net be region you we and as corporate intend rating where would to we to agencies the probably it’s want say for us expect we believe have in where, add there’s I target, - don’t so know, other to market example, and be. there? if you color we are we be told any

Francisco Martinez-Davis

just with than We we leverage agencies, three-point-something, the the [indiscernible] as so have have think the I I works. lower said, I do think Santiago. signaled peers, rating in three-point-something mean, No, discussion I

Santiago Seage

average tend to geography by different consistent. sector, EBITDA for are fairly on EBITDA they and be but obviously by us Okay, margin, margins then and

bit healthy last you numbers, revenues, we year. lower, see bit if at a absolute is This quarter, a we versus looking growth what but you had a EBITDA are that’s look in one-off at of why you the percentage believe the is

Yves Siegel

nothing there’s as expenses on as going So anything-- far or really

Santiago Seage

but in large, quarter expenses or trend, there, or have change, if I might asset no a there’s there’s We No. higher anywhere. no nothing mean, no there’s whatever. an bit of significant, want, this deterioration, here you

Yves Siegel

very Okay, thank you much.

Santiago Seage

Thank you.

Operator

call will you. I now closing back remarks. for hand Thank the

Santiago Seage

you much attending you very today. everybody for to Thank Thank Operator. Great.

Francisco Martinez-Davis

Thank you.

Operator

participating. today’s concludes you This for you. conference Thank call. Thank

disconnect. now may You

Atlantica Sustainable Infrastructure (AY) 3 Aug 212021 Q2 Earnings call transcript