Capharnaum wrote: johnathamilton wrote: @Capharnum - yeah it does sound a bit obvious doesn't it? LOL! What I mean is that the miss was HUGE, yet, the regulated utilities is 80% of its revenue. I haven't taken a look at the reports and I don't know where to find the data, but it's hard to correlate such a big miss when <20% of the business was "apparently" running under budget, ....unless there was bleeding elsewhere.
Net adjusted profit per share was 11 cents vs 15 cents last year, which was disappointing for sure, but not as bad as most make it sound.
Compared to last year:
Regulated divisional operating profit was up $229 mil to $196 mil
Renewable energy group operating profit was equal at $72 mil to $73 mil
Adjusted EBITDA was $276 mil to $252 mil.
Adjusted funds from operations were $206 mil to $170 mil.
The larger "headline" loss is mostly due to a $280 mil loss on the fair value of their investment in Atlantica.
The share price has certainly taken a bath considering those results compared to last year. On top of that, a majority of their debt (70%) is linked to the regulated services on which they will eventually receive regulatory assets compensation and reverse the costs on the extra interests they paid in the quarter.
The current problems are:
- They have extra current interest charges that lowers net earnings until they can roll a portion into regulated assets, at which point they'll have extra revenues to compensate which should boost net earnings
- They have projects into which they've injected cash which have been delayed, so the non-utility part is facing higher interest charges with lowered revenues
- On the renewable energy group assets, they had the capacity to produce more in Q3 2022 (due to new projects) than in Q3 2021, but due in parts to lower winds, they weren't able to generate more. As a comparison, they generated $243 mil in the prior six months in divisional operating profits compared to $192 mil last year. So far this year, they had produced at about 100% of the long term average resource production, while they produced at 85% during Q3.
- They were planning on investing in a lot of capex projects to keep the CAGR going and due to the current share price and high cost of debt, they will need to rethink that plan, which means they clearly won't be able to meet their 2025 goals.
It's all available from AQN's website or on SEDAR, it's not like it's particularly hard to get. Imo, there's nothing in there that screams long term problems on the revenue and costs side. Sure, the higher interest rates will weight on the results but the impacts will come down once they can get those charges rolled into regulatory assets. On the capex/growth side of things, they will certainly have to lower the targets and rethink how they finance those initiatives.
Anyhow, imo, if you invest directly into companies, you should take the time to read their earnings report.