Earnings call transcript Q2 2023

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Operator

Hello and welcome to Atlantica’s Second Quarter 2023 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. Financial results could differ materially from our forward-looking statements. risk peer 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 reports 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 on Santiago CFO, CEO, us Joining Martinez-Davis. Atlantica’s

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

Santiago Seage

and first the strength Thank year second In highly joining you shows the for our half we portfolio. and believe long-term conference our you diversified morning, us general, in of asset call. very quarter much. the the thank and contracted second Good of for quarter XXXX

have many our results call time, We and that we While these about respectively, and take have many that over that believe to a now increased results. revenue by comparable on peers, quarter diversified resources our same this comparable the will portfolio. a fact through have million. thanks $XXX.X basis. half diversified soft who is At distribution EBITDA cash technology by of solid to has our for will increased of a available turn more reaching the companies first geography the well-contracted, us by X.X% I portfolio, basis, of been the another Francisco highly financial on the in means X.X% by wind adjusted year, both talking in U.S., and a sector the in X.X%

Francisco Martinez-Davis

X.X% XXX.X everyone. of the Thank financial reached our you, where foreign of Santiago which Adjusted EBITDA will was growth on basis for on I good Number excluding an represents effect a present XXX.X comparable million X a XXXX. X.X% results the comparable key of Revenue to million, half a representing basis. Please turn first Slide morning increase to exchange. and

available for of comparable X.X% in XXX.X million year-over-year first XXXX, cash a Regarding generated basis, half distribution, and an growth. of we X.X increase on the

Slide to decreased in business across performance lower In solar period. you see North year, resources our the period in mainly America, X% sector. last XXXX the could due U.S. following spite the the at by to to due our of in as and EBITDA wind in portfolio same XXX.X by of radiation solar lower X% the other the in the wind our of million geography revenue Adjusted second by X, was higher production Number quarter. increased in lower EBITDA hand compared On U.S., on U.S. lower first half production mostly due the to the in assets to

a our In half period the XXXX gain in and revenue despite to assets mostly compared EBITDA indexation adjusted the part increase inflation corresponding development in in by EMEA in our up our higher was prices The X% South a the EBITDA XX.X recently in in equity to a In those same currency Spain, partner during through contracts quarter. revenue to entered mechanism America, which basis, company by to production year. due electricity due increased region XX.X lower was This due compared on operation, or first in period, respectively. assets mainly constant Colombia to of XX% our mainly with interest the sale solar last and with and lower million. in increased the to and of first XX% million X% decreased revenue

the indexation value and and higher at inflation. As receive entitled Kaxu, a revenue partially return, fluctuation rate asset. not predefined through revenue decrease the to market the are regulated and production of of affect This thanks to you high these aware, are offset prices assets was are by do

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

please have mainly will recently XXXX, XXXX period reached radiation gigawatt from in Electricity solar X% increase in renewable produced our versus recently. performance. and consolidated due I X, of in review where entered Let’s contribution the assets the increase an now by half the our our to where operational Number the of same to hours production turn first have XXXX, Slide the assets in the solar of higher those Spain, and assets in that operation period was

Even our solar assets solar assets the the United better have than lower same our was in period though of performance. shown in increased radiation also year, States. Production previous

Looking at segment availability our scheduled decreased and which stop efficient in will our impact heat revenue. availability during to due the natural gas not mostly period, based maintenance contracts,

Our water transmission XXXX. to of first half achieve very in and the availability assets lines continue high levels

a you allowing As Atlantica the the country, U.S. a well-diversified can benefits on in to company part production wind our which the lower lower see, was as result this the of of is based thus wind availability, impact. portfolio though at offset assets even across revenue from in negative

With pre-corporate would stood CAFD On a review debt this quarter our we the Number We ratio position. Slide times. like our debt corporate of at debt net the with debt net service to to XXX net closed corporate next X, X.X million.

flat of as XXXX, $X,XXX June to compared project was debt remaining million net XXXX. addition, December In XX,

back finance the credit liquidity available the in and million Santiago. at continue We million now of level to corporate over to XXX.X million which totaled revolving I cash to the our corporate have with XXX.X liquidity. under facility, growth turn $XX.X call ample will

Santiago Seage

Great. Thank you, Francisco.

continue pipe a geothermal construction in X as portable co-located a of construction of Batteries we expected X, new good Page see developed. includes, of have second and we have Coso This on South in the as you to we America. under hours XXX-megawatt continued includes can progress advancing XXXX, project, assets with our the California, number plants where in make During quarter asset

the down there. risk the believe, expansions terms in have and profitability, we both we transmission are, attractive as starting are projects, These in South profile. we now Additionally, America very in build of returns, lines terms well, to of two of

you Additionally, of pipeline pipeline energy that have expect do storage. development an clearly, renewable includes a being close hours of plan the on X, of around And our and to today's that are open investments assets update part of current in for assets we we would the our we you ready significant and Thanks and the that, us X building questions. X under and to presentation. we gigawatts want. coming developing. continues will part Page are Operator, gigawatt significant of whenever be these years, a now will conclude for we joining lines linked With our

Operator

Instructions]. you. [Operator Thank

question James. line today David, first from go Quezada Our ahead. David comes of the from please Raymond

Your line is now open.

David Quezada

development any and for you're the activities working renewable seeing going the development of good are could forward, the is everyone. you think first help advancing. connection it projects grid other projects projects U.S., maybe the just projects accelerate on that the question Thanks, the general best up Do you're Maybe in still the a efforts for speed just and opportunities you to your that internationally? on where U.S. comment new morning see to around opportunities you

Santiago Seage

streamline that tell We you don't it efforts U.S. be positive. incrementally, change, for in the right are and that a truth. to David. the the direction should to We being expect huge process, the question, you helpful. the Thank in taken obviously, are they believe But do be Great. the might

it Regarding that saw a that because advantages geography where same we we fact this and of the see way and by portfolio brings opportunities, our more of we number believe existing diversified the it's technology, quarter.

returns. do We reasonable therefore, market, also fact our or the is market projects constructive is terms that do advantages. PPAs, attractive. point with like U.S. believe in the believe time in We that in of pipeline development diversified that is believe build to brings be that us at able We should pricing companies and this the also reasonable

of also that's projects believe significant U.S. opportunities and that It continue where to significant portfolio there We complemented a no the will be other outside will in intention part, about we very is question where our core present. developing profitable that. the are but U.S. geographies be with a are why the

David Quezada

Thank just with and respect all of handful your lower just seeing to you're could color excellent. North you America, if that turning might maybe you're happen an acquisitions, today? just regions in what to view at transactions seen across then at I'm for think Okay, -- be we've multiples. Santiago. curious you I say how acquisition you key just And a shifted attractive if has your for curious

Santiago Seage

longer fact seeing little on point and would that expectations in and this picture you bankers, of At are continue meet. in that And similar make we to tell -- are you saw are a bit buyers that this No, do do we sure rates there believe obviously, prices meaning, quarter, it and play buyers a to that projects probably higher, a there. that sellers the agree time, can ask difference. because we role not point where close will takes situations last interest to time, difficult at they if more sellers probably what

see for was question takes it certain translate projects, in opportunities. probably believe the as able this an we not opportunities at bit be but we readjust, happens longer if or to in find it's term example. that easy I a there. which should investor time. We'll readjustment short of returns, think a that XXXX, There's should into to do reasonable And very that us, a for that in

David Quezada

able Excellent. affect about regulatory in if certainly quarter? I'm impact in just if you're see doesn't Appreciate that that I appreciate for last maybe quantify color, the the to but just of in me. EBITDA impact one the you financially. change of that of just The the you. talk could roughly quarter, returns you evaluation assets, that curious Maybe one Spain wondering thank the or like those

Santiago Seage

quick I'll give a and if can So you needed. answer complement Francisco

a we Spain, day, coming other lower are market short-term regulated all our Europe whatever more payments This you therefore, market are making power we in have in part In not there and and be revenues end full a than happen the are than have the revenues should is value has the there in from received. whatever we impact we are seen from assets assets increased impact. be year, the revenues case, And market complements solar revenues regulated in are should technologies we know, in year the material. the As bottom no market, will Very of our most and prices payments adjusted what receive. of accordingly, been where the like obviously, why impact regulation. have regulation line, of in view, That's much last wind, case, changes from our point the year smaller no regulation at plus, important. are different because

nothing material there. So

Relations Investor you be and If Francisco able to will help you detail, want more I'm sure there.

David Quezada

thank Excellent, you.

Operator

Thank Please next line today of Agnieszka question comes from you. Storozynski from Angie. the The ahead, Seaport. go

Your open. line now is

Agnieszka Storozynski

Good morning.

are might review at rising I owner you have on are direction we review been missed there So of comment has rates? did it, and at process, strategic your any your guys this change but that Thanks. in the majority interest changes given happening where

Santiago Seage

morning. you, Thank good Angie and

So much I can any review that regarding I -- the we review and don't have is add update strategic there. and not continues don't ongoing, have the there's

Agnieszka Storozynski

in moving think I'm those expect just you but I tariff future then CAFD you the following currently? on, current be XXXX. wondering you at is look regulatory When resets changes your when about all wondering, And would resets? assets, just know your in we actually XXXX portfolio to the these you at of or look formula, what just Okay. of take that recent the sustained I EBITDA assets, Again, Spain. talked level have and

Santiago Seage

pointed early more my probably would out, rightly of reviewed our be in best half less revenues So as answer or will you be, XXXX.

The early would be XXXX. half in reviewed other

lots is away say So to I make able of to that would too that still review be predictions. far

review that not slightly based that on capital next depend again, the the question be going try lot few depending calculate know, by your of what some therefore, the But expect think answer to happened you a We a a [ph] simplifying macro the WAC you use there. cost on regulator, to to happens, would might the calculation of the where with years. variables the in anything is As And different. on what with the is significant to of I variables they estimate industry. answer

Agnieszka Storozynski

That’s all you. thank I have,

Santiago Seage

Thank you Angie.

Operator

today is Nelson, next Ng of line go RBC from The ahead. Capital question you. Nelson from Markets. Thank the please

open. now is line Your

Nelson Ng

thanks Great, everyone. and good morning

developments, want about labor So potential on I the dynamics. your supply cost and pressures, just ask chain to

the you can is have But terms can labor -- comment just labor on U.S. Coso you also you're I projects market comment of Obviously, So development? in and Battery you in South on South the how both And North America? in guess, America. then the dynamics managing U.S. labor the pretty tight. market markets in the the

Santiago Seage

Yes, thanks question. for the

I agree our tight described, let's of markets It you what point -- in the with, is obviously, would view. case labor a the So not in the say. being U.S. market Americas, the currently elsewhere from in

that's U.S. specific So situation. a very

able suppliers not We every labor beyond and we been are where are day with up that inflation in you we not we build. able markets work plants obviously, we increases cost and In operate markets. manage been the to context case we are the have the and of find of in in expect whom U.S., situation we that to now that, And both having that in rest to have we through or the the the understand navigate we seeing the -- described. what of we other and assets locally operate, we believe risks we the able the

now, that's top of point worry say wouldn't or I factors, until wouldn't of risk a So top of other but view it's one, I for list list. It's obviously, a say us. that the the from from

Nelson Ng

color. wind That's U.S., then good the in you few a Okay, obviously, And thanks. have facilities.

think pretty remaining others the short. and them for is are for -- contracted the I the one of term merchants

expire repowering, tax decade So started I credits? on qualified for also the those have discussions on guess so is credits that tax to is other better another partner the question potentially like, don't of in your projects? you And terms or just the it wait for with given repowering

Santiago Seage

not answer my mentioned, rush. would situation in rightly credit be, advantage be the yes, tax So the should a as today, that have of you we we is

and have in to will to We that repower, try moment front repower in expire to how to time specific when to CAPEX case. repower, as of of guess PPAs assets decide the try us wind find be best the to plenty in what to

and a rushed to need But don't partner So our number variables decision. best to with of there, will we decision. try make the we moving a again, be into

be suggested, will very in you be might are we and but best we So timing the as not working short-term. the working

Nelson Ng

there. leave I Santiago. thanks it Okay, will

Santiago Seage

Great, you. thank

Operator

line Thank you. The from go the of question next please Bank Rupert Merer today ahead. comes Rupert, Canada. from of National

now is line Your open.

Rupert Merer

you, good Thank afternoon.

organic to XXXX the term sustainable a would or What Your resources be ready disclosures that for your build highlight given think growth development that those you do of in your to projects medium long the to company, XX% you pipeline construction? of XXXX. is in have your and pace bring the available for state pipeline and

Santiago Seage

Rupert. So good morning

that from we coming those the very coming pipeline. the from the As you the pipeline our average. like invest of is know, we $XXX million investment $XXX believe our year are course maturity target of a million something in on to the terms every come large given in of and of And pipeline, of years construction projects size part developed should of that have

high a XX% percentage. XX% a but very a significant whether percentage, So and we XX%, will or be see, very that would

Rupert Merer

look Maybe opportunity future, at but I do the you'll to capital, that projects? is to perhaps you the an review, don't have also but mean infrastructure your in is this strategic of that just in to pace do resources something the increase and develop investment there

Santiago Seage

Yes.

coming pipeline and pipeline have do over -- and the our are that our our to time that significant the spending building over pipeline returns, both in from have that quarter time front increasing would pipeline. quarter yield continue if So be expectation will us and of and is believe at last of good we be the own increasing, few that our in should been would look we that investments percentage after years, you us there therefore, we opportunities expectation continue that that

Rupert Merer

that initial And they that in had and follow-up the today the initially procuring the finally, to with highlight How batteries you you in working the batteries as question, meet you. market then forecast? a your of are do Coso Nelson's expectations Thank disclosures your line to going and cost be on project. availability your and costs you're for are seeing

Santiago Seage

be few details market then many quarters, finding would I that into are that might for with have we been and we a getting the say in the environment, our finding suppliers at last suppliers, regarding overall, conversations is need find in within do Without can things. we not helpful time the frame we meaning current the expected. deliver realistically normal expected Obviously, you who do cost those two we to

something expect what time are energy delivery are in today a you're So going happen. would delivery going that is you the very the we significantly. that's But the U.S. where renewable the purchase if growing in seeing to your lines short-term, is not market for market to in the expectation

So usual, you as business want. part of if our

Rupert Merer

Great, thank I you much. leave it there. very will

Santiago Seage

Thank you.

Operator

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

Your line is now open.

Mark Jarvi

Thanks. Hi, everyone.

still think the now to strategic the that of that's longer the review. lines of happen no could makes contemplated strategic thought part comments review or that prior ruled quicker and time Do a reasonable strategic or than the process kind back in anything as last a you direction going terms any there wrap little Just of that review, you've out up you the is sense? think insinuated I you've

Santiago Seage

able I have beginning, there's given either regarding and guidance not we today. second timing, of any question. the regarding it the going review, at the part I I'm no to mentioned be I never so And give you, answer to So as can do update the wouldn't

Mark Jarvi

hurdles at and bond higher the and just your market your and all you execution, then of labor return construction across And in any okay. enough, jurisdictions? is guess, I Fair project on, higher of risk where light changed yields have

Santiago Seage

work rates. have and minimum And interest our very with and rates move methodology perception a in we with market. say, The obviously, way returns let's is in, the hurdle dynamic hurdle investment to regarding policies, calculate rates we

our of So be should be, we in rates be general, we for in and answer minimum than course, are ago, they rates investment hurdle would higher committee the doing adjust returns expectations of as with no should couple interest believes question. short the yes, where But today our methodology. a our years

Mark Jarvi

That meet where hurdle the the changing like prospective wondering competition you that point I'm feel on rates, has your higher is ultimately, losing so projects to you achieve trying do and/or just find And guess, rates your that not adjusted makes me. you're out you with that, projects? industry everyone I can still to sense to

Santiago Seage

make. able two deploy rented that view. a rational that money think the I comments more were is those than that sheet, company I would that there are believe today cannot ago, I expression, a to rented One, sorry low and probably for car, more point means years two from Today, very Two in guys that. a do for with rational raise ago. opportunities years balance in at car guys of returns. And the a capital becoming two market two

we comfortable what So returns. And this can we reasonable believe where we capital feel more at opportunities we have consider are we that in deploy environment. do

Mark Jarvi

Last of question will me, you what this terms just in for sense. Makes year. think be equity deployment

last the think last since to million that the I $XXX $XXX still million. you're that or have you roughly was tracking update? raised where we saw disclosure Is number

Francisco Martinez-Davis

now. that tracking year. we That's our that estimate gave at the number beginning right of we're Mark, the towards

Mark. So that latest the have, we estimate that's

Mark Jarvi

you. Perfect, time the today. thank for Thanks

Santiago Seage

Mark. you Thank

Operator

go the Julien. question ahead, Dumoulin-Smith next you. today Julien of line The of America. from Thank Bank comes Please from

now is Your open. line

Julien Dumoulin-Smith

organic afternoon in the or about more, it. to pursuing provided organic would strategic light organic XXXX guys Thanks what's heard good development, that really on here and once how opportunities? pursue of morning of about annual reflection to for pipeline good are build you as a to slide modest is just thinking hear the seems in your team. real your contribution intent the development, review in How check and since the you lieu your fits think fairly ready start comments strategic you love get on of I comments as changed to appreciate but just quickly, wanted to contributor the growth earlier to any to given hasn't into for the and Hey, XXXX in time, but year. Look, alternatives total goals

Santiago Seage

forgetting strategic review, about So is ongoing. a little which the bit

when complement growing with as mentioned of of become every the a before, as to with be that our strategy now in the numbers to going year before, very the review, end is that mentioned, do mentioned opportunities see and and some have you, we let's it our investments a significant of we I believe we of you front I why there's irrespective M&A part to the mentioned, it's that. accretive to or so I much probable our expect what pipeline. there, investments continue pipeline significant of with strategy, you we strategic pipeline value next and that's from ago, more that Obviously, I to are can let's M&A you higher a We the half our create that as the work. part expect, have numbers. part quarters, able we that year. developing around significant our with As whenever we are the and coming and build that believe storage whenever which, pipeline as would are over very year And can that a than up translate there, you find dollars, be Complemented

Julien Dumoulin-Smith

Got it.

kind the read alternatives, statements don't towards of pipeline fact to point sustainable of Your market? strategic about pipeline right, your is, has into regardless pivot that intent any the

Santiago Seage

Agreed. Yes.

Julien Dumoulin-Smith

line process, on expansion no could return of resolution time there's that the we or And when dedicated when is to we when strategic pipeline right, see know of -- could kind Okay. really you've for generic? I left a see the kind

Santiago Seage

No.

obviously, led being somewhere deadline able want putting the because that without properly. we should things process Board, by be lead do you strategic and we to the that Board the think to As is know, review a

Julien Dumoulin-Smith

will I enough. guys. fair there, it you Alright, thank leave

Santiago Seage

Julien. you Thank

Operator

UBS. from The you. William Thank line question ahead. next comes Please today Grippin go from of the

now Your open. line is

William Grippin

been -- answered. questions have morning. actually, thanks, first Great, question most of my good My

have but could Coso, here. you given the just wanted elsewhere, storage and have you opportunities projects, stand-alone one on you what know the pipeline, credit? the I existing are storage is I in storage base the asset But you existing to what versus pipeline just with speak to So co-located just your ask opportunities that outside here of kind extent tax your to deploy to seeing then new leverage of

Santiago Seage

So storage, three probably developments. within we have of types

We another like it have co-located a nothing point situations from Coso of is X, physically it with asset, to but where do. view, contractual/client has

physically So inside geothermal be plant. It will type with the Coso it PPA X client. but would would a totally is operated X. have different by the That people, same separate totally be a

we We existing and agreement. leveraging opportunities second -- our are only it's leverage Then it's a type be where project. commercial footprint, we we but separate co-locate not of the but would situations commercially, a co-locate

types existing In of If assets we PPA stand-alone new in from the second be over going bucket or and time, sign important. a become have third co-location storage of an would one some this in the at And third the point our look include view a leveraging lot one time, the U.S., bucket. asset component the of leverage a are PPA point portfolio, using And then the three of will totally storage. projects. the you whatever first our developments. a and we more you have I So new PV to the at and

they probably we U.S., situations Chile. short plant add like where the are can outside an the storage more So to in term, existing in

where a plan in plant situation to we the storage we have We next past where a PV have include year. discussed

of second bit you in an -- little the three. short-term, I client. I you a then sorry, and plant the include and existing confused more in option, where the storage it's Again, enough. hope the sharing third second then the later So the the first

William Grippin

I appreciate all No, That’s for me. color the there.

Santiago Seage

Thank you.

Operator

next Bank The Antoine. question line you. America. Please the ahead, Thank Aurimond of go today of from from comes Antoine

is line open. now Your

Antoine Aurimond

taking you Thanks are well. Hope for question. my

the year markets forward? side, CAFD any that corporate remind of the related insight level back in you leverage And of next see you times. just going to half over debt at So mentioned terms parent how year? the the you potential us X.X on of for Can have you credit that, corporate capital of please sort think activity I and

Francisco Martinez-Davis

do morning. have good times have We X.X Antoine, the been steady. Okay, that

the You keeping target we a of times leverage know x our that X-ish, multiple. leverage around X at Atlantica have

look So materials, right going as capital of would said, for a best the both combination equity to we that's not that, said, structure important that a covenant that's the debt And we debt I financial target, we and maintaining of now, what you saw have that with company. what's as have in the holding that target the at remember going in the forward, liquidity. It's combination I we forward, have. good a

competitive So the company to to target most to -- what's we continues see times, way to be look this and be monitoring the X our we're always market able finance the Antoine.

Antoine Aurimond

Okay, good. one Thanks Francisco. Have guys. good a

Operator

waiting time. questions additional no at are There you. this Thank

to Mr. Please remarks. to back Seage go closing ahead. the pass for conference any over like I'd So

Santiago Seage

Thank you.

today. Investor for like operator. And everybody, will clarification further be joining Relations and thanks, our So questions. Thank team for you, always, available us

Operator

Thank This for you your today's all conference call. concludes participation.

lines. your You may now disconnect

Atlantica Sustainable Infrastructure (AY) 1 Aug 232023 Q2 Earnings call transcript