Algonquin Power & Utilities Corp T.AQN

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

Utilities Utilities - Diversified

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.

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Algonquin Power & Utilities Corp

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Post by retiredcfon Mar 04, 2022 8:40am

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Post# 34482395

TD

Have a US$17.00 target. GLTA

Algonquin Power & Utilities Corp.

(AQN-N, AQN-T) US$14.60 | C$18.49

In Line Q4 Supported by Gain on Sale; 2022 Outlook Reaffirmed

Event

Algonquin Power & Utilities Corp. reported Q4/21 results last night.

Q4/21 adjusted EPS of $0.21 matched both our forecast and the consensus estimate. Q4/21 adjusted EBITDA of $297.6 million was modestly below our estimate of $309.2 million and the consensus forecast of $304.4 million.

Conference Call: Today at 10:00 a.m. ET: 1-888-330-2454 or 240-789-2714, ID 5079453 (link to webcast).

Impact: NEUTRAL

Q4/21 EPS was consistent with both our estimate and the consensus forecast.

We note that EPS benefited from a one-time gain on the sale of a renewable development project to a JV with its construction partner ($0.04/shr pre-tax); we anticipate more clarity on the conference call but speculate that this reflects value created through the project development process. 2022 EPS guidance was reaffirmed.

Details

Q4/21 operating results. The contribution from the Regulated Services segment to Q4/21 EBITDA was below our forecast, however, this was mitigated by both higher-than-forecast HLBV and the gain on a sale of assets within the Renewables segment. The transfer of the New Market Solar Project into a JV between AQN and construction partner Ares Management (AQN's new AAGES partner) resulted in a one-time gain of $26.2 million in Q4/21 ($0.04/shr). Renewable power generation was 3% below long-term averages (LTA); HLBV income within this segment was above our forecast. Q4/21 EPS also benefited from lower-than-forecast income tax expense.
Guidance for 2022 is unchanged. At its December 14 investor day, AQN guided to full-year 2022 adjusted EPS of $0.72-$0.77 (implied y/y growth of ~5% at the midpoint) - this guidance is unchanged. Relative to 2021, we anticipate that overall EPS growth will be tempered by Kentucky Power dilution (expected Q2/22 close), early under-earning from New York American Water (closed January 1, 2022), and ongoing grid congestion in Texas.
Regulatory Update. As of February 4, the last of four stipulation agreements related to Empire's rate review was filed, resolving all issues except rate design (litigated February 10). If approved by the Missouri PSC, Empire would increase its annual revenues in Missouri by $39.5 million in May 2022.