AY - Earnings call transcript Q1 2022 | Atlantica Sustainable Infrastructure plc

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Operator

Welcome to Atlantica’s First Quarter 2022 Financial Results Conference Call. Atlantica is a sustainable infrastructure company.

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 if any of our key assumptions are incorrect or because of other factors discussed in today’s earnings presentation or because of other factors discussed, including the Risk Factors section of the accompanying presentation and in our latest reports and filings with the Securities and Exchange Commission, all of which can be found on our website. any update undertake forward-looking not does duty any to statements. Atlantica

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

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

Santiago Seage

first quarter revenue few Good I and will call. a non-recurrent increased impact much. very for exchange key you foreign X%. EBITDA conference In and thanks And rate year. XXXX, X% basis, joining comparable has close with XXXX a quarter us by around Thank increased effects excluding morning on for has to messages. the our of first adjusted start a last by

X% We have had year-over-year CAFD growth $XX than reaching of more a million. bit

results Directors declared $X.XX of dividend of the share. Board quarterly following per a has Our

Regarding earmarked a who turn including assets, you closed our will plants. financial growth investments $XXX quarterly will through have and I you between new construction year, this million, already whenever to Francisco, and new call over Francisco, of energy acquisitions million or want. take we renewable the results. $XXX now

Francisco Martinez-Davis

Thank you, turn will Slide the growth a XXX reached Please which our a to Santiago, million, morning represents I the for XXXX. comparable where X% first on months good key financial of Revenue of XXXX everyone. present quarter basis. #X, in to X and first -- $XXX.X

project non-recurring comparable to Excluding same of we foreign mentioned. on $XXX.X increase exchange an solar last previously that representing X.X%, year. basis and the of EBITDA million, effects discussed Adjusted amounted the the

increase first in quarter we distribution, for of Regarding cash available million $XX.X the of year-over-year. an X.X XXXX, generated

In and good revenue of of mainly performance the to the XXXX, resource United Slide in our acquired thanks region increased can exchange see the thanks XX% North to quarter and in in in foreign by South non-recurring recently while the performance the following EMEA XX% months to to by by business geography the increased our States. by EBITDA XX%, decreased X project. million XXXX, revenue $XX.X higher Revenue you by due assets X%, America, of solar first America, first assets. and #X, increased effect On the sector. wind impact In the in

at Looking see results. sector, below we by results similar the business can

due Next we turn by now produced review XX% reached period in acquired operational to resource our X,XXX of in and assets. lower XXXX, Electricity of increase please same due #X, gigawatt of renewable assets in recently to the in Slide assets, where production regions. versus will hours partially This X compensated wind the The XXXX. performance. contribution months some increase the an assets of first our lower solar by largely radiation solar in to higher production was our mostly wind was

availability-based see availability, in availability lines ACT contracts, sectors Looking waters, the on again, continue and high show based we where that once transmission levels. two revenue at is continues to our achieve our solid to we performance other

of quarter #X to flow first Let's to not our walk through for XXXX. turn cash Slide you the please

Santiago. turn for the mainly of and new geographies. it very Change credit our the net was acquisition principal Our the the in first of quarter, includes from million XXXX capital quarter equity cash to the flow $XXX.X to reached the I our will negative, quarter XXXX operating revolving first from was of distribution non-controlling months now cash of to $XX.X our for mainly $XX paid of million, million, was Investing dividends first and while finance in cash first million. repayment scheduled the in includes Financing in and receive flow withdrawal we project $X.X method. XXXX of facility. of call the of of entities shareholders under back interest collection typical flow X which had million $XX.X periods several in working good assets,

Santiago Seage

$XXX of the or transmission assets million includes A $XXX remarks. between closed couple that two million, and XXXX, quarter, small line the final That million $XX discussed In we in first acquisitions. months including Italy. the and last investments earmarked of XX-mile in we PV have

we today's investments, under projects I between million under presentation. $XX joining Additionally, million earmarked Thank that, projects renewable in or you have With conclude energy and closed $XX construction. for including construction, us.

[Operator & Whenever of questions. Co. for line Your ahead. from lines the Tudor, today Pickering, open Bean go now Operator. Please Holt question first Instructions] you will the We want, Colton comes from

Colton Bean

morning. Good

off you of million $XX starting with prior $XX to of added. the million million? $XX few I XXXX can million on had investment you as outlook, as outlook assets under construction $XX the a think closed bridge well assets projects new Just the to updated

Santiago Seage

we have Yes. we construction to year. assets Basically update, it's an under an have where this we regarding the include update construction under or plan

because number, quarter. build to a last now bit we than more So it slightly expect higher has

Colton Bean

any It …? Okay. side of sounds or additional projects maybe And solar then like that? specific project

Santiago Seage

Yes, PV. we at we the is this are doing large, not but that point again talking solar. in difference are And time mostly

Colton Bean

is it. South America, And still primarily? in Got that

Santiago Seage

Yes.

Colton Bean

then, you there out team? for have human you? a growth capital? add And that last proportion I think your quarter to that building How you development. Understood. priority higher you potentially efforts speak coming a in successful Can Is from mentioned house to of been your

Santiago Seage

going projects So, significant a percentage partners become that as or been as with gradually our rightly developed we mentioning, of co-developed have we mentioned. yearly have more will in you Investments we investments. forward expect

You already it can see your question. in following XXXX previous

we part meaningful to this we that continue. doing developed projects and have do we expect we investments So or have a that are in co-developed of our year

it in things both and in we year progressing the way next where a of time, we us, expect year, forward this we at are the this So for and different of point in operate. opportunities going have number geographies front

Colton Bean

Okay. point. And just to clarify that

you don't sounds all like don't you really the it with capabilities team your -- expand and So need as you're to there? comfortable is

Santiago Seage

resources, in many investments us. cases or No, for is we not we in terms general, and have can this resources significant anything with are in with human investments partnerships. do mostly These general, in things of in

Colton Bean

Appreciate your Great. time.

Santiago Seage

Thank you.

Operator

you. Thank

Your next of line of from Please America. Bank go comes the question Julien ahead. from Dumoulin-Smith

Julien Dumoulin-Smith

Hey, good the Thanks hear time. Can me? for morning, you team.

Santiago Seage

morning, Julien. hear can Good We you.

Julien Dumoulin-Smith

Excellent. Thank again. you

time? 'XX this bit growth think say here, on slides just going put big debt you you to to all the leverage amortization. do the organic here? keep emphasis about Obviously, -- trend targets on in good shall here. a So CAFD do the FY pace follow-up on How have the a amortization elevated your we over Just you of

Francisco Martinez-Davis

Francisco. it’s Julien,

you a exactly what appendix slide have can XX. you're there mentioning. and We on see And Slide

reduce billion $X next the years. expect to our project So X over debt we over

So debt is you significant is -- can the not I is All see our mean, that amortizing. this this level operating planned. at there is a scheduled,

to So our to planning we're $X debt billion reduce the years. over X next

Julien Dumoulin-Smith

think though, profile just more And ideal shifting directly, when far growth? billion you CAFD that hit any have way as kind Does leverage about leverage, your that identified corporate have, as at it amortization the elevated $X a targets, especially considering capitalization given guys in here. higher specific you Francisco, maybe of and your

Francisco Martinez-Davis

and cashflow remaining. what we mean, contracted have years of I Julien we XX No, do,

EBITDA We have XX% margin.

our want be have You net see We that the to we in as level at the Xs slide said. X.X. the debt in corporate we at

the think leverage amortize that that have. leverage a the think visibility really projects I I we the place said, it that at have as on But a is our it the we're is balance the think appropriate message and Board of So and key our with we deleveraging to way I the of I is we here and high project comfortable Directors there of the level. is projects sheet

Julien Dumoulin-Smith

growth? hear had pace 'XX should a Yes. No, I we great I you. mean, you've you guys thinking potentially your And years. there? structurally expectations on to here biasing And earlier clarify several too. from higher 'XX, I I question, the mean, be growth, about just or had successful expedited being of the mean, CAFD

You're any term? ambitious on update latest especially a we messaging the should Should longer here, -- say, we here? considering

Francisco Martinez-Davis

-- a that investments we put we But had is Well, what something where we to in exceeded have XXXX. million messaging to look work, We've expected are target. mentioned want years year. Julien Santiago of in at $XXX if

or our committed with we of You is XX% see have that already target closed.

I where to I put shooting yearly target million that we think we to $XXX basis, that's are work -- on a the So for think this year.

Julien Dumoulin-Smith

and anyway, dynamics -- it. a U.S bit enough. then but the if looking [ph] on wind kit Got being expectation and on Obviously, international you're more ADCVD they assets development little [ph] that perhaps issues what mature the should you just profile that going curious. forward, renewables, an is considering given Fair And for I both mean, just may? be will?

Santiago Seage

America. said to we continue I North on still focus

Julien. continue we investment that saw was primary major last You main North North for and target think our America effort in our made growth, America, that year, is to

Julien Dumoulin-Smith

All guys. Well, there. Thank leave I'll right. Excellent. it you,

Santiago Seage

you, Thank Julien.

Operator

the Thank line Mark JPMorgan. Strouse you. go Please The ahead. of from next question is from

Mark Strouse

Yes, if chain, that your supply peers questions. of and about, increasing, very -- may some of these up point size Is rates taking answered. struggling funnel, much some talk size of opportunity pick for only geopolitics, these with you to projects them to not just smaller you the disruptions thanks presents have interest given from to of your for talk but been an of if that some the of of be from some wanted the of Most opportunities. issues? about your I kind earlier, to our can Julien's the that

Santiago Seage

acquisitions, we So of market assets in call with what, we are opportunity third-party for companies every if our track record, with ahead. a money terms we the constructive balance One, profile, bit probably conservative set, invest if you regarding parties, with more year, I than in terms two believe a say forward, want, sheet, companies in meaning that third the you that the regarding and purchasing will others. company be look companies investments from do that things would of a should

players very do are now developers, the signed aggressive that that rates -- capture happen number going the we hopefully, difficulties supply So disruptions and will before, who aggressive aware the chain of there. could are are down, of things some that to some for finding interest prices that in guys panel have are mean disruptions making of developers, to go to that Department of mentioned under that midterm. value going those to a of Julien believe discovering the certain at be at we not is a still people things, is Probably do up, more And newer represent more PPAs always return. that you opportunities are looking go the prices some Commerce

with conservative more than development bit again, we others. -- own partners, when a we own tend or co-development of our about talk Additionally, pipeline to be, our

is all. So not our objective largest the at pipeline to have

those regard, should sectors and able size not are will projects affecting are flip able we other is some becomes grow some risks protection. the U.S the are in sector describe, objective that be fact therefore who that's taking Our are different feed it. the of ourselves, is in because probably of we want we and that's expect in developers the things us, tougher, impacts to the geographies. that because different If invest of are diversification PV dynamics some we and In of of the to not why that to of us. many sectors -- assets additional things happening we happening, or and suddenly don't many the and in doing And the that the And help that are geographies the an from taking. to

Mark Strouse

Right. helpful. very Yes. you. Thank That's

Francisco Martinez-Davis

Thank you.

Operator

question you. Please Mark go of The comes CIBC. from the Jarvi ahead. from next line Thank

Mark Jarvi

at whether tracking capital markets not Thanks. volatility this deployment equity on rates Good or and did a near-term more, look market here this you last year? to but back and in volatility. well morning, year, curious well down slows all, little just year, widening you caution the equity base half creates in everyone. very It of the I guess, the Obviously, bit and as some spreads the

Santiago Seage

think by let's it say definition. would don't case, be the I

are. cautious be And to scenario. that we're think to in cautious going as as we we be tend always I any

have the used if that At finance and capital, there way we we good to find right the right and is access deploy opportunity. we line the right will and volatile, more to find the clearly market when resources we point in So opportunities. if we find And our is but time be this revolving opportunity.

when worried about But we like cautious all. are markets not we deploy we at be real if So and will and opportunities the find capital value.

Mark Jarvi

guess contract the a happening need And terms structure there could is I to of mindful policy indifferent anything And you anything terms anything your you given be that if government Spain? wholesale Spain, will happen? intervention of in with prices? higher assets? we intervention there given that think modifications something are Understood. it does, or it in happen Do in Or in is the to

Santiago Seage

governments that. counted Europe, is an expected. forever at on. measures across be the of higher at our we this This would keep measures will temporary are collecting seeing power and expect day. not seek end regulated So what higher you're regulators collect much the we when case the proposing to than and regulator in in sell compensate that temporary to obviously mitigate the point And we market revenues general the Spain exception. We the time in What are fact in them something didn't to revenues because are we are that

our the what should get a of for of So that we for is this principle, regulated, return you year, and indifferent, regulators will bit cash propose, we following year us, in be next or obtaining subject year. the meaning investments irrespective more be whether to details on

Mark Jarvi

as actually it, M&A right or Thanks then tilted you other the as do have we terms XX-XX, of a to versus you year to sense balance one than for think more get if that. of in funnel way deployment, of this just you it's get hope the whether the now? you or look do million at that And target organic, obviously $XXX to the

Santiago Seage

that. this expect XX-XX a we trajectory following. to maybe the to And So are or year in next that get towards we not year,

our be in So a … target would

Mark Jarvi

good. Sounds

Santiago Seage

It's it's on opportunities depend specific going to internally years guidance se. sort a It's year. and be to and of not in per any around of XX-XX simply couple externally. a target, …

Mark Jarvi

Got it.

Okay. Thanks.

Santiago Seage

you. Thank

Operator

the James. is you. The ahead. from Thank David go Please Raymond next question from line of Quezada

David Quezada

everyone. morning, Good Thanks.

your a about have, your environment. at Just the any of you price I I'm curious in point? improves kind extend any here next the ability years? have few that if question guess any that conversations having curious if you're to the of it up to PPAs high-power you those contracts quick Just coming of of this relates

Santiago Seage

many asset options. partner, our PPAs do where or we that with in have of short have life get don't our midterm. in we situations at are the Texas, We So where together end to the one looking

is everywhere. way a some in Beyond comes slightly in an I that, that, that what some environment would better, cases, midterm. ago. the the even than for Having nothing there's basically say said year to end general In was contracting cases, better better, in it other

clients So in these And sure more like favorable or better more be opportunities pricing. there I'm to given pricing, will companies clearly for fact days sector, the us. in potential clients general that companies are the or open for

David Quezada

kind emerging hydrogen? few what Okay, have Curious capture, And your kind that excellent. would a the company are more for next thoughts the longer-term over of like just classes you. maybe if appetite more years? me of your one forward-looking question. asset then green hydro for on Thank or carbon Curious

Santiago Seage

because are be a time at will will we technologies, newer spending classes some But And profile. in we pioneer mentioned. with time. the you of some are never clearly, if risk asset of we deploying we general, be interested, capital in our point Yes, on you want,

and example, hydrogen, for to geographies. more where as opportunities, For that more enough. time, for becomes view, so work, evident of point is should both a numbers technologies things, the all easy our the other view the client cost not point technology situations from Over is of it's be probably like can in mature investor. is COX find there What among of

when technologies your take it's outside yes, going be bit would to but if of would to we investment, you be longer some is work those answer what write longer or some on as is want a do a of analysts. bit short a about you to than going my in like We probably take you to. market the make your that initial return think which something So

David Quezada

the color. Appreciate Excellent. you. Thank

Santiago Seage

you. Thank

Operator

go from ahead. you. William question UBS. Thank Grippin comes Please next [Operator The from of the line Instructions]

William Grippin

-- showing an percentage does piece to inflation-based linked region? there XX, linked by Great. Thank the the break appreciate the that? you that how Slide Question of Where's most are breakdown index, to CAFD contracts. showing sort out very of you're concentrated of that that Curious, much. on the on XX% of

Santiago Seage

XX%, -- even is formula some of different those general, if that different. each in U.S are Obviously, used not are in linked CPIs, out So those U.S. of in CPIs to than the contracts are there the

we have as of contracts there have is we We have And indexed in contracts things the But highest where to region EMEA there in CPI. region. every America, well. in America North percentage probably South contracts the do are and

William Grippin

are us one-for-one? Got Or those it there, at formulas help CPI understand, pretty of mean, some guess, is pass-through? it. just a I And is I much kept level

Santiago Seage

every In are general they contract is not, even different. though

William Grippin

Understood.

very Thanks much. Okay.

Santiago Seage

you. Thank

Operator

you. And no Thank are questions time. at this there further

speakers. So I'll the back hand to

Santiago Seage

can very everybody. much operator. Great. the you Bye. Thank line, close to We

Operator

you. Thank

So this does conclude …

Santiago Seage

Okay. Bye, bye.

Operator

does conclude the may disconnect. for you Thank participating Thank you. This and conference now today. you for

Atlantica Sustainable Infrastructure (AY) 9 May 222022 Q1 Earnings call transcript