2Q2016 Conference Call Cliff-notes & CommentsI finally was able to listen to the conference call and catch up on a few press releases (read vs. skim). Overall this was one of the better calls I can remember with Alterra; much better than the 1st quarter which was extremely flat.
It seems as if they missed earnings, but continue to reposition to ensure a bright future. The timing of Mr. Carson’s interview was perfect to help keep the focus on the future, than the past. Of course if you set expectations and then reset them higher and then higher you need to accomplish them.
On a side note, at what point does selling hope and more hope turn into nope; which leads to disappointment. OR an optimist would say pay off with amazing (good) surprises.
The biggest eyebrow raising item to me was that ~62% of the call was interactive answering questions. These questions were thoughtful and from several investors. I am concluding that there is a lot of interest in Alterra. Context: in the past I recall very few and very basic questions primarily from the basic staff level (one time, a year or two ago, you could hear the disappointment when from Alterra’s management when the actual banker wasn’t on the call). So this was awesome to me and for Alterra!
My cliff-notes and comments are below (it did not cut and paste very well):
· Missed earnings
o Let’s admit this and get past this
o I am a little disappointed, the market seems to be focused on the future
o It looks like they are going to need to excellent 3rd and 4th quarters to meet their guidance
· Weakness in Green Energy shown
o No matter what the statistics state, anomalies occur
o A weakness with wind energy is the consistency and Alterra just wrote its own white paper on it
§ Perfect stats to build, bad quarter in reality
o This could show the importance of diversification both geographically as well as power generation (solar, wind, hydro, etc.)
· Total call time 46:04
o Questions began at about 18 minutes 29 seconds
o So questions lasted 28 minutes 33 seconds
o Almost 62% of the call was the questions!!!
o Thoughtful questions from multiple investors
§ And solid follow up questions
· Experience is shining
o The past years of paying for education is paying off
o Shareholder note: when parents pay for a tuition they want their children to do something with their lives
§ Alterra appears to be doing be heading the right direction
· Financial Maestro
o It sounds like Alterra has become a one-stop shop to get things done
o Mr. Beaty has the solid leadership and financial knowledge and respect to be a dealmaker
§ The dealmaker people want to do business with \ are attached to
· Hmmm seems just like in mining J
· Dividend
o I heard on the call that it is not going to happen in 2016
o I will stick with my previous post that as long as the long-term loan is coded short-term the board of directors has an excuse that they cannot, as prudent leaders, issue a dividend with negative working capital
§ Plus if they did, any lender could use this against them in negotiations
· US Listing
o I heard on the call it is not going to happen, only costs, no true additions
o However, Mr. Beaty did state the more US power plants they have the more this makes sense
§ After the call, John Carson states on TV that they are growing their US assets
· 4 Year Runway Project Pipeline
o 40 – 320 MW range
o 200 MW larger end
o 150 MW
o 50+ MW
o 75 MW
o 320 MW
o So 595 MW possible on runway
§ Website state current generation (not net) is 819 MW
· I sounds like take off is coming!
o But we need them build and generating profitable revenue
· Iceland
o It seems like they are developing a lot of power for an island
o I wonder if they know something material that we don’t
§ For instance, is a new cable going to be proposed?
§ Are new, permanent industries being invested in
o I know these concerns may be odd coming from me and a prior post
§ But let’s face it if they and their competitors on the island build a lot of power plants and demand doesn’t increase, you have a long-term low revenue problem…perhaps that draws more industry to help…
· Arbitration
o Should be finalized in October or November 2016
Overall, the call has me focused on the next 6 months!
If you accumulated over the past 2-3+ years, the next 2-3 years should be fruitful.
Material Girl, RDK and Newstock I may need you for balance!
Bold Forbes