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Algonquin Power & Utilities Corp T.AQN

Alternate Symbol(s):  AQN | T.AQN.PR.A | T.AQN.PR.D | AGQPF

Algonquin Power & Utilities Corp. is a Canada-based diversified international generation, transmission, and distribution company. The Company through its two business groups, the Regulated Services Group, and the Renewable Energy Group, provides sustainable energy and water solutions through its portfolio of electric generation, transmission, and distribution utility investments to over one million customer connections, largely in the United States and Canada. The Company is engaged in renewable energy through its portfolio of long-term contracted wind, solar, and hydroelectric generating facilities. The Company owns, operates, and/or has net interests in over four gigawatts (GW) of installed renewable energy capacity. The Company is focused on its expanding global pipeline of renewable energy and electric transmission development projects, organic growth within its rate-regulated generation, distribution and transmission businesses, and the pursuit of accretive acquisitions.


TSX:AQN - Post by User

Post by bmbruceon Aug 14, 2020 6:25am
269 Views
Post# 31407037

RBC -view on earnings

RBC -view on earnings"First Glance: Weaker-than-expected Q2 results put 2020 guidance at risk, in our view Impact: Negative First impression Q2/20 results were below our expectations. Algonquin Powers Q2/20 Adjusted EPS of $0.09 was below our estimate and consensus of $0.12. Adjusted EBITDA of $159 million (excluding $17 million of HLBV income) was also below our estimate of $178 million. The variance to our estimate was due to higher overhead costs, and lower-than-expected contribution from both the renewable generation division (production was 5% below the long-term average) and the distribution division (reduced volume- related revenues due to impacts from COVID-19). Please refer to Exhibit 1 for additional details. Guidance reiterated, but could be at risk, in our view. Management reiterated its 2020 Adjusted EPS guidance of $0.65-0.70, but noted they will continue to monitor the impacts of COVID-19. We estimate that the company would need to generate ~$213 million in H2/20 (23% above H2/19) to hit the low end of the guidance range, which may be difficult. Seeking to recover impact from COVID-19. Management indicated that COVID-19 negatively impacted Q2 results by ~$10 million, and the policies put in place resulted in receivables greater than 60 days overdue increasing to ~25% of total accounts receivable (up from 15% in Q2/19). The company started to resume normal collection procedures in July and is also seeking to recover other incremental impacts related to COVID-19 in all of its regulatory jurisdictions. City of Bolivar residents voted to approve transfer of Missouri Water. With respect to the Missouri Water asset purchase agreement, the company reported that the City of Bolivar residents voted to approve the transfer on June 2. The purchase price is ~$24 million with closing subject to approval from the Missouri Public Service Commission. Equity needs satisfied into 2021. The company issued 8.7 million common shares for proceeds of $121 million during the quarter, and issued 57.5 million shares for gross proceeds of $724 million in July. Management noted that the company has now satisfied all of its equity needs for 2020 and into 2021. Conference call: Friday, August 14, at 10:00 AM ET. The dial-in number is 1-800-319-4610. We expect investors to focus on commentary regarding the impacts from COVID-19, cost-saving initiatives, the pending acquisitions, the Empire rate case proceedings, and Algonquin's renewable development arrangement with Chevron."
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