AY - Earnings call transcript Q1 2024 | Atlantica Sustainable Infrastructure plc

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Operator

Welcome to Atlantica's First Quarter 2024 Financial Results Conference Call.

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, which are based on current expectations and assumptions and 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, including the Risk Factors section of the accompanying presentation and in our latest reports and filings with the Securities and Exchange, 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, this

Santiago Seage

XXXX high-level you will start I thank and joining messages. morning, call. much for us a conference few for Good very our first quarter with

period last and excluding As close same increased you to unscheduled to up compared the adjusted discussed while flow quarter seen the we XX% quarter. Operating last the X.X%, revenue have versus year, $XX EBITDA in first of outage by million. stable that year-over-year, by cash remained the decreased effect

a storage a XXX-megawatt wind U.K. projects, X to take In us now terms of assets through in growth project we who of turn the will the on completed, signed PPA solar financial completed new XX-year new among results. plus operating and our in recently projects, we California acquisition other Francisco, will the for I call we

Francisco Martinez-Davis

mentioned to million compared quarter. Thank for increase America our we Please of of assets at million was Santiago, Revenue quarter the morning outage at key where everyone. the in present good and #X, first turn to offset financials stable XXXX. with remained last XXXX. $XXX.X in first that I will quarter you, Kaxu North in The revenue in $XXX.X by Slide our the

a with period EBITDA excluding was impact policy outage interruption a deductible. Adjusted As in of million, and year, our is representing a Kaxu. mid-February business damage covered the the by X.X% last after the reminder, and insurance at the operations compared plant XX-day the same decrease $XXX.X restarted

distribution, cash we quarter XXXX. in of $XX.X first generated available million the for Regarding

same increased mainly mechanism first slide X in solar In XXXX increased to #X, respectively, period our of the due performance following inflation with both months the see due quarter compared and revenue million, $XX.X the in the to compared decreased you North of of most versus revenue assets $XX.X to XX% geography unscheduled year $XX increased at South up and America, outage and to EMEA and period million of our the $XX.X our mostly increased in same XX% EBITDA sector. indexation first and Production EBITDA $XXX XXXX, revenue in to region, business to XXXX, can X% to In the of America, contracts. In million Kaxu. On last the million X% by the million. U.S.

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

the Electricity mainly Slide versus assets lower Let's solar in radiation the period now XX% operational by XXXX, will reached review a first performance. decrease of Spain. Kaxu due renewable decrease our in please turn of X,XXX to a to gigawatt produced we months where hours #X, X XXXX in our same and

solar On in to at the thanks in XX% U.S. by increased hand, Solana. production other performance the our better assets

to as heat our achieve as of transmission first quarter water very our Looking and availability-based efficient continue natural our availability contracts, the assets segment lines and at in high levels gas well XXXX.

an I the over wind call will the activities assets investments, an last slide, $XX.X year of in of to capital. in turn of the in construction investing United X operating to approximately now next quarter flow thanks working XXXX, at improvement first Santiago. Net operating of XXXX the corresponding assets In flow. in compared changes $XX On the million $XX.X reached we used same under and period a investment our cash the back in will Kingdom take cash #X, the million, cash of quarter look mostly in increase to to acquisition includes in first XX% million development.

Santiago Seage

Francisco. you, Thank

we that XXXX, make on acquisitions contracted growth of progress while developing quarter building that, whenever in complementing focused you have new first strategy projects know, with and enough. this our continued is returns as to During attractive are

Following an to California. offtaker grade building that or PV a we project The signed XXX-megawatt storage area. assets our and in the new large and located operation Southern in XX-year close are X strategy, in investment several plus a for PPA in project we fairly start with Arizona have is of California projects building to X, close

we have we we achieve you the and build to where an area continue see, can in can synergies. critical As Southwest, volume mass where

We later to expect year. reach ready-to-build stage project this this

we will and PV wind a after-tax debt In X pricing. expansion have addition, to as battery the as of X.Xx higher can assets we today. investment. If higher the the price net multiple I during through assets are the a have The use Chile project how the clearly quarter, Chile in a U.K., one EBITDA acquired regulated storage for The this our X storage example those value. as returns attractive markets energy EV make renewable of add a signed the with represented mentioned geographies, at in first the and project other we have under plant should to capture us U.K., assets forward construction. about to look operating that storage we is we existing what investment believe have an of losses Chile allow in PPA carry is reaching allows investment no the XX-year currently return of where PPA, an comment repowering including

several key pipeline existing storage know, in that new or combination more energy renewable storage of our with less opportunity is see And both we of you simply or in As is assets storage. because XX% markets, for to increasing our continue stand-alone. or in an

X we a Chile are asset operation building or battery PV expansion. PV where As a repowering you is in know,

proceeds result number million, move Regarding proceeds point you in it closed, a less of could that the Q&A. to sale to in before of there. expect there the our a we things more stake additionally, And in an or is earn-out additional final recently mechanism $XX And and subject of we see Monterrey, future.

We conclude for regarding we today's market practice, and make speculation us. aware Thanks media of are around this, not any past that. With presentation. will following and Atlantica we comments joining

will line the we questions. for ready you whenever We want. Operator, Q&A open are for now

Operator

And goes [Operator question of to Bank. our Merer Rupert first National Instructions]

Rupert Merer

competitive So Are market you but the own strategic wondering review maybe active can't seems of your the optimism about like healthy? about in in in increasing in I months? at Has market is talk you process, number respect today? U.S. that there? market It there market, Do that market. dynamic talk improvements I'm last an of And changed the a particular. are few you M&A see any over bit a the you the it the M&A is changing? buyers all Does you look little seeing can

Santiago Seage

Rupert. question, Thanks Okay. for the

to talk finding believe the see let's meaning sellers closed a of opportunities the going say, about What this we ourselves, I'm An do reasonable see, the we projects success year, M&A market ourselves, what is market, of the assets. Monterrey rate difficult in again buyers' an where match few believe, divestiture see acquisition average case, probably we can cases, we and quarters, U.K. the in it operating was closed mid see, general, project. expectations. And or So good We acquisition in be We you part market. is achieve least can the of last probably that that size. is are X.X example that as do to part U.K. in the And many higher. returns. the And would we are at in the ago, years In size that the in we we the which we seeing our the is of

do success year that probably more X.X rate market, seeing than X you we or the years if active believe, higher ago. referring to we is were and So a are that, we M&A see

Rupert Merer

U.S. so, we're you optimism for rates, the the in with. the driven and of And you're Or is say, around that the related and you touch like? centers? offtakes attractive this you interest potential potential market how think can be potential in the or what growth could Are market market in of optimism return center on, in of looks by to speculation partly with seeing for comment seeing much any that -- data market involved way? for drive also data a market, And markets some the but could the falling offtakes potential you lot for could be if are

Santiago Seage

months, We do market. general we're I'm view or community would see clients point the them. can I general, but talking at have and center that industrial choice backwards. market, or being there's very about In centers, the an offtake close writing prices. over data have see, few in or we in helps. active a We utilities that about Yes. opportunity market. you reasonable obviously, important is do We in only believe opportunity see opportunity strategic PPAs well. corporate in probably do not lots being as of signed PPAs, of the off-takers our with market, And been similar data that the We signing time, We across, see step U.S. point all aggregators last which at very the in people take opportunity, we the in do see agreements this

able it be. answer large Myself, your to I question be how would not of will

out like a of in hype at I little there. this there's bit many time think that things, point with

going part of the some become no I of about, projections, whether tell. reach think that been are people some to is to have meaningful market, will time going we talking a question, the

mix able segments storage that including that day for needed key before. with ago. today's and to able in centers period I clients, power other in renewable technologies I industry, mentioned are mentioned solar during And other of that's a the as technology, clean I generation other to solutions, and time data much active and in than for plus longer that of to important order all energy solutions to we the being or different are many before, provide we the be market, able obtain for as We few think a companies one. And are if years

Operator

Ng goes of RBC question to Capital next Markets. The Nelson

Nelson Ng

one-off other that are to Or sales? asset is question looking first you as project. Do sale? actively My you at relates the Monterrey see a

Santiago Seage

be I But answer meaning believe situation obviously, to rotation, different numbers yes, we part mean, doing, third is the opportunities. the willing will be to Obviously, at we work, us open where it would work. value will So are opportunities the looking a pay of a will the to believe at the the strategy, your be have as than more other for to be we numbers would and to a if as our of need we we party need of things what that question, be we asset. looking part

Nelson Ng

color more new on that on the California, can looking you milestone then of in the at process? development you give to there competitive new a terms Great. in Imperial, might just a need And Okay. it based the Are payments? bit future of just Was acquisition additional that project, development? make us the payments

Santiago Seage

Yes.

under development, project this a this before, very So advanced year. to build as is development. the project to be ready expect I we within And mentioned

development And milestones you if purchased we our development So as the stage, from about mentioned are is those backyard, an it's be in advanced good project I is in it payments that very want. where Algonquin. The before, advanced will most that, you acquire we in when projects are milestones met. thing a like making following there

signed to with the we feel recently good a it we PPAs the mass PPA acquisition Southwest, building like bit comfortable it's very of a continue after good very that thanks one and critical off-taker. we a very has we those the that in So and fact

fairly to portfolio. a this addition we project result good in that So comfortable our are will

Nelson Ng

Great. Okay.

question on California. more X Just

battery California. you you So have the storage, X megawatts also overnight project. you That's Imperial in right, XXX then the storage Coso and now have have project. Coso the X And

time can any provide of projects? of just maybe color cost total on the So time bit the color you or line these and X on a line

Santiago Seage

Yes.

during should and year, end mostly on been Coso this overnight starting advanced early year, year. of That's in Imperial. So as And number by and have and you this next they between but and it timing, depending very would construction 'XX. X happen the a QX more terms PPAs cases, -- end of timing. things, are construction of both know, should take or In be projects the signed, battery construction of construction the less the are 'XX. over XXXX under And be would

them have In me investment, numbers total of you in don't our in the point have in terms time. I at of front disclosure. this

in if want follow with So Investor to but you up Relations, the it's disclosure.

Nelson Ng

recycling on will Great. that finally, any look I obviously, on level more have And those X guess I'll could solution, projects provide plan? but question additional just X capital funding color plan? Like bit up. is your debt. just like, part project details be a the the can then nonrecourse funding you of

Francisco Martinez-Davis

this Yes. Nelson, Francisco. is

know a put recycling One allows on nonrecourse contracted signed basis at of since for you the capital. are source a we and PPA is, Capital the things, projects good leverage as very us these them that good of to project another is level. on

We in future. leverage the the have also And also that company. have our of at some we capacity part generate CAFD holding we

So X, in those levers, Nelson. batteries, the some the if as for funding, Coso said, 'XX and combine use 'XX but would you to plan Santiago sources we those be those mentioned, particular 'XX of cases, I

Operator

goes to The you. of question Storozynski Thank next Angie Seaport.

Agnieszka Storozynski

about strategic talk review. I you want So don't the understand to

a for couple of are discrepancy is quite teens heard mean, It resemble seems maybe paid to sub multiples being I'm of generally more that valuation, it So And single wondering of do development transactions assets. multiples that companies in for seem about how at standalone that which versus I assets. developers there have all Xx for EBITDA could existing apply we've even we you a asset? last is? M&A the in your low like months. does versus over to And more seen just if why renewable think

Santiago Seage

reason enough And you I in Thank aware but were you rates regarding typically we understand different for sector, but you, the in the the you valuations to Obviously, the too mentioning. familiar with described. significant much have able not a not do elaborate wouldn't role, our play Angie. I'm be situation interest Obviously, lot spend sector, to valuations. examples are transactions of trying time the a we the mentioned.

Agnieszka Storozynski

that value managed deals attractive assets indicative of the you existing is are can to fact wind Okay. that be given those at But I alluded it of you that at -- is But such basically the low coming of low assets the might in types buy market overall, that such about middle you mean just to at the that, of that if how of multiples? multiples. wondering sort multiples? assets buy your U.K.

Santiago Seage

Yes.

the competition that specifically before. of what than the middle or called part case in market, in before market that were would lower describing I So in in is I you general the say

I have order numbers attractive have in a market find $XX of until like the we looking a too draw at us. multiples in So are find to I that because locally, describing. But million asset U.K. situations, in very we try case, mean, we we certain for we and fact at we have situation had invest some the to that of opportunities a And long enough. to look a different situation now, actually, believe that the been time. not for NOLs found with is are situations, our many wouldn't are able opportunities to for obviously, of purchasing many to you in conclusions. from the examples attractive

easy So we with at to many, $XX In find asset had our shared million U.K. to the around I case, stones. wouldn't a we multiple say in that the many you. turn it's

Agnieszka Storozynski

bit. Okay. then changing And topics little a

maybe repowering, in you up the I assets in this have the mean that's decisions capture in power particular. an market here U.S., Texas, timing would the in power sort just opportunistic if PPAs. assets So longer about to wind of keeping guys U.S., impacting your been run prices bought given for merchants these of those that fundamental. I this wonder forward we in some improving expire

Santiago Seage

Yes.

positive we say, of the another that merchant for mean specifically we happy but from, or with more the exposure this have how yes, merchant repowering will dynamics time, reinvesting let's very percentage on it are market market. are we only to we in in tactically wind, make in want term we keeping which we the the expect X doesn't might again, assets -- part will merchant is It's portfolio. At short or not so repowering, which point until a or But This sense. more are some to depending repowering that in evolves, can is at we be reason and point those because think as So again, a we regarding benefit thought in with we have merchant know, trying those best. And also small assets, in of assets repowering forever. with that these opportunities a of in projects. asset it's have that view repower partner storage opportunistically, exposure we a strong and Texas, you you maintain have the point our to time,

we to pricing to a tango point need are whenever So we make of and that both we strong have it dynamics. takes regarding sure two and tango, view we ready

Operator

The of Capital CIBC next question goes to Mark Markets. Jarvi

Mark Jarvi

Santiago, plans XXXX, the coming back maybe, that corporate-level Or just credit explicit So plan to be for debt? question. issue would the just What draw facilities? to on funding there is actually

Francisco Martinez-Davis

We have Francisco. -- Mark, it's

our is mentioned the -- different one we're know, you said, ones As options We obviously mean, particularly funding as you I have is we I one that considering. of the low. leverage

Mark Jarvi

would or That facility the corporate credit debt? be

Francisco Martinez-Davis

it both time. running the project Well, where we're same track combination of be I finance of would at the mean, parallel putting

Mark Jarvi

are of $XXX talked projection? then equity you And million terms those the any to you that expected Understood. I of equity over million. deployment then And announced Of projects contemplated last now in commitments in quarter, were today, about the standing of now? guess, $XXX right where

Santiago Seage

account we in going you. to it the announced in So today, taken with one, mostly but was California 'XX is in numbers into shared we happen price 'XX, investment the

that I no change So general, say would big there. in there's

we when general, we we believe account to the certain U.K. a to But share except going you projections quarter we a with with shared are ago, probability. the that into you, happen in take with numbers try projects. Regarding things for

that. significant versus a would change I very not So expect

Mark Jarvi

Okay. then development And you a to trend would a do on frame and Or over on Santiago, of you acquisitions some stones you keep interest maybe the holding? about there's pressure start find stones feel the acquisitions going returns. Yes, versus good development there. come out lot they your projects rates lower? lot turn comment having made are to then project side How like if or of opportunity to the to return

Santiago Seage

having development. other are at side Yes. look In returns many, when in time. made you many that comparable develop before the returns to this see similar we in point development end to we more at comment in returns I side or been probably M&A on opportunities I higher need say improved up The general, the you words, the That's or why X.X ago, been on would returns seeing what have continue a quarters. there. years being to in less, holding they last market. And have that few the to year,

that But rational Whether lot would I seen, we depend think last increase see interest bit returns, it maintain pressure. on for I this we is or have rates. say, market returns. quarters, we reasonable what will with few we further the a of a a

Mark Jarvi

comment good you do looking deals about that at small, find hard at? to acquisitions, a that Or that having you're And think accretive right time range large medium of is then and just size the across now? your the goes

Santiago Seage

large spend We transactions. too much time don't on

lower to of that opportunities find. we So easy the to that very saw It I specifically we the to that's time, useful interesting have been wouldn't the in last able be U.K., part quarters the midsized few part takes not the market. in see multiples of for in again, the market,

Operator

America. our Bank Instructions] [Operator Gosai of to [ goes next ] question Dimple And of

Unknown Analyst

then reiterate market, intact you outlook A you're the you what guidance, everything regulatory talk guidance? market little of me terms with Do comfortable today? prices, me. very And a bit in that? on you are is quick front? about seeing And also year Spain or X Can from for

Santiago Seage

Yes.

the need second won't with part to guidance it. our talk to when about change starting your question, practice So is of we

So to need we make not when saying are anything we only some is it our because to about change. practice talk

that the Spain, disclosure in our question, coming briefly in is expect project Spain, market your investing the the we a talked in a time PV of to in part project we project for first where about and quarters. example, The

point this couple good So we they are, dynamics in would see, of a market where as pricing say, I not time, a years were as at ago.

But careful, and working PPAs. continue always, with here being very finding like there, opportunities we

and we're you using of Spain are we may California, storage installed. which dark do the do PV we have or low curve as we going be try power is closer from So steep a we leverage with to Northern And as a the prices various as PV is That those in going you have are lot there. high many our where point around say similar in view, PPAs in California market of that, a to to cases, means midday be to penetration. very be in sector, again to opportunities Chile, using market therefore,

market as So in forward, is huge of California, opportunity are will the bit more. opportunities Southern I them expect the that we view, when a future. but of believe don't but in capture a point California to Spain do especially bit now see see some going we dynamics develops Europe storage seeing Spain that growth many we a the in we behind From

Operator

you. Thank

We comments. have closing to now further Santiago no I for hand any will back questions.

Santiago Seage

Thank very Great. for . attending. much, you everybody,

Francisco Martinez-Davis

you. morning. Good Thank

Operator

for This Thank now you. joining. today's you call. Thank concludes all

disconnect your now may lines. You

Atlantica Sustainable Infrastructure (AY) 8 May 242024 Q1 Earnings call transcript