Atlantica Sustainable Infrastructure (AY) 1 Mar 232022 Q4 Earnings call transcript

Welcome to Atlantica’s Full Year 2022 Financial Results Conference Call. Atlantica is a Sustainable Infrastructure company.

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 based on the current expectations and assumptions, which 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 discussed in today’s earnings presentation or because of other factors discussed, including the Risk Factors section of the accompanying presentation and in our latest reports and filings with the Securities and Exchange Commission, 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 the conference a at of session. open we Q&A usual, for the As lines end call, the

Mr. I go Please, ahead. over sir, Seage. will you now pass to

respectively, X.X%, At us X.X% available start revenue Thank reaching provided you and with on by key basis. XX% In XXXX, joining for a with distribution adjusted morning. XXXX XXXX $XXX EBITDA conference cash X.X% you everybody And few very our increase cash thank a call. same time, a XXXX. in comparable the Net and increased $XXX activities increased much. year-over-year, for by million, compared was Good for by operating I will messages. million.

results, investments for we And $XXX to in have already we our $XXX million. $XXX XXXX committed investment we initiating $XXX million. of range are growth, representing CAFD or the XXXX earmarked With between guidance million million and in of terms those have

key will With who turn call now the mind, to? Francisco, will you I Francisco, in the wanted you to whenever through take messages results. those

to Adjusted I on very non-recurrent amounted of financials reached slide morning X.X% a turn exchange. comparable project basis. that good million, Thank solar number increase on EBITDA which Santiago, represents our discussed million, effects we year for $X,XXX basis, the excluding same foreign comparable last and representing present to Please five, the growth the everyone. of $XXX an much, you full and year Revenue where will key to XXXX. X.X% a

distribution, of year-over-year. full we for $XXX generated cash the increase million X.X% year, an Regarding for available

the recently geography sector. year the slide XXXX, our due in performance following the North revenue X% to acquired mainly million to and can assets. see America, the from number you by increased contribution On full business $XXX In six, by

to X%, inflation and and increase $XXX the $XXX acquired In period to compared XXXX, to due up to increased South America, EBITDA to was revenue mainly mechanisms. increased up million assets million. the by X% during The

region, impact production foreign XXXX. higher Coso increased exchange and in inflation mostly the well higher [ph], to indexation by Spain. EMEA effect the Revenue as previously, EBITDA in electricity prices non-recurrent excluding both due X% and in This mentioned the was in in as

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

we an Now of let’s XXXX, our operational The XXXX. where of was please of largely XX% renewable Electricity the period increase acquired. year seven, reached to to produced in performance. will turn the recently X,XXX increase gigawatt same versus number slide due assets hours contribution by review full the assets

to In levels. once continue was Looking very good high at Lines continues availability assets. show higher our And performance availability the XXXX our based solid to Transmission than performance. XXXX, water, ACT all contracts, with again, in availability in achieve

move to eight Now walk full slide the let’s you our year XXXX. to through number for cash flow

of better cash in flow reached improvement ACT to mostly of in Spain. a strong the collections collections working year XX% operating better an in This capital $XX increase result Our XXXX. was in to a increase full mainly due changes $XXX million, million, and compared

for Financing of and cash and interest includes shareholders under distributions mainly agreements the our the it flow investments million Investing for full includes mainly and from method principal year paid -- million. dividends million to equity for $XXX from the in new project received $XXX the the and XXXX finance method. scheduled non-controlling $XXX assets repayment flow entities was cash

decrease December $XXX XX, review $X,XXX would end. our we next of position, XXXX. million, December was XX, debt million like has approximately significantly to slide number net nine, decreased a which Net debt year of compared to the On XXXX as versus XXXX,

corporate net of debt year closed stood the this, we pre-corporate times. debt service to debt XXXX $XXX CAFD with a corporate addition, net million. full at our In ratio With X.X

on slide front Disclosure to also was slide, the XXXX, number to ranked the we progress Infrastructure good globally made on have XXXX, In on GRESB’s next number and In ESG one Rating. be our Public Atlantica recognized. the XX. November Moving effort continues

included December ranked In the In XXXX, CDP’s World’s the the Most for second consecutive core Sustainable XXX among by to achieving XXXX, third Corporations. transparency climate consecutive we the we action highest were in relation List, A in year environmental Global and year January were XXX change. for

third the Atlantica in Yearbook. Index. finally, in year XXXX, Bloomberg the second Sustainability January included consecutive for Also, in the the And Gender in was S&P XXXX, included consecutive Global Equality was February year for Atlantica

the with will Santiago. I Now, turn to this, call over back

we in now or committed expansion construction XX the million geothermal $XXX we range our and well XXXX for inside of as already several that we These growth between key Coso see geographies, about investments, earmarked investments includes transmission battery have $XXX we page and our our can announced, the as first the in of If of our plant lines. plant talk investments million. as in well include storage located California, equity on assets recently PV two which

storage first Spain, Additionally, recently expect plus with in this first locations manufacturing well as PV other project. Europe, our we a hydrogen in where we facility in investments our specifically, hydrogen include be This won hydrogen project. is and XX-megawatt that facility you projects will find to a several grant

we been at of our is on the last the there XX look regarding Atlantica that the we fact is have have pipeline Atlantica we quarters, following we beyond If expect through developed. and you more XXXX, having what see to grow over -- construction discussions page assets can development

of see as repowering and existing assets hours This storage. with of partners in Atlantica development the a will of collaboration gigawatts under of renewable different or geographies. that includes development over X in done or approximately energy You within opportunities greenfield both gigawatts well pipeline the X as by currently expansion have we portfolio,

mainly focused projects, North on intending the is will pipeline to storage and As see, and our you mostly leverage PV, of consists America, wind IRA.

guidance, be in $XXX page target to the in last XXXX expect look to range CAFD be range to if EBITDA of $XXX we at we $XXX and finally, million And million. $XXX to the million adjusted of expect million we and our the

you Operator, With that, we and I the for today’s open lines presentation. Thank will now for very much please. joining conclude questions, us,

have first Instructions] you. the from Raymond question We on Thank David our will line [Operator Quezada of James.

Your line open. is

in there’s the Good that key -- be projects that and everyone. share new -- certainly of on development I morning. developed Thanks. Maybe milestones color pipeline? can Hi, I disclosures pace on share was these pipeline. just of in -- are you wondering any projects appreciate how can just Santiago, the will the any where terms development these how if you

good David. Sure, morning, and

So partners that of many over as that for on Atlantica pipeline We the see projects, and has like to build in you company disclosure, a will us, working with combining that makes believe in acquisitions. continuing pipeline. the it development cases together sense been grow is building with to years

current build And broken and in we year that you where down this ready or an expect projects, reach it next regarding our pipeline, year, term phase. to development have to between shorter projects projects earlier are

development As pipeline fairly you there, young. is will see our

what projects significant of a those early call, stages. So are I still in, would percentage

investments want We to won’t of going if believe every we source and significant a growth will the projects do will a you be the year. to they significant future, growth, we to able part build we doing are that we feed forward. of be represent to of these be over But be only foreseeable but the ourselves percentage our expect going

asset that plan ongoing or a Thanks and selling pipeline? around and follow-up company a operational And recycling, stake do model maybe operational business maybe towards an a development is even here just for your assets thoughts eventually Excellent. a that. fund in funding kind or you see to of assets that trending

the all will, the one and you the pipeline could going growth, forward. consider obviously, be options mentioning right obviously, to ones. deciding So how to ways are when the conditions finance are What of we finance

won’t including one. ratios in obviously options, at you all time, At we leverage the And It one Francisco, the but be reasonable, believe alternatives. analyzing more this all be the our we will are as the point CFO, looking will be obviously than mentioned. only

Thanks for back will that. in I Excellent. get queue.

you, Thank David.

Thank you.

of next Seaport. comes Angie from Our Storozynski question

line Your open. is

guys. morning, Good

I what to find an a achieve? to stock So for mean, is just attempt your I trying attempt again, but you maybe the it first has to larger mean, strategic exit struggled, on an the I an to strategic facilitate are trying obviously, mean, basically we shareholder, review, partner, are achieve? it is what

we Good have would specific, we morning, more specific, specific. something to Angie. released be able I to obviously won’t wanted be because too be if

maximize So at order review and strategic decided has a in this options Board the to value. of start in brought analyze a to number time, point

Board options the Algonquin of this shareholder. to And to the get work a has largest as leave see need the options, identify support you announcement, But through process could as the all those we in the conclusion. and to

this just you to of won’t be a I So started you range in alternatives. well, process, we be and specific, able as analyze know strategic very typically process, a wide very because

what’s either Okay. to And about to cycle construction you and contributing basically, expect of these construction the I the start are should for secondly, under when then, EBITDA projects under that to so show or so that be all CAFD, construction, assets? your them

on fairly each talking see on. we Typically, probably what these the PV depending on so a about and year, a there doing, construction can can But bit Yeah. be and short configuration cycle less, is, as are bit and more depending you project. which assets for of a you are lot size, a storage,

to would then after soon. typically be able construction, take CAFD you construction, start they long through go it contributing to should that’s and fairly So how to

comments share I a your review there a wondering, has function longer the am any on or strategic pending it about lastly, don’t and And per term just is in I change Okay. outlooks of been see CAFD your… growth

It is.

… potential growth…

Angie. is, It

…first review? the is

No.

Okay.

Having would over sharing wait be midterm thought to having that do before that started, is. us for we review, need we that guidance. It to

And what for -- ratio or in guidance exchange what FX last FX embedded XXXX ratio Okay. is euro the then for dollar? versus CAFD your one,

therefore, more around range be or around a £X.XX at exchange as yeah, yesterday you it know, [ph]. a or today less, today and rate where it work the So, or typically would with was least we range, is

So…

Okay.

we number. … certain a that say, have around let’s cushion,

Thank Thanks. you. Okay.

now We have you. Capital Thank CIBC of Markets. Mark Jarvi

Your now line is open.

Good Thank everyone. morning, you.

tuck-in growth? transactions deals, strategic small terms capacity the table in that willingness means review, off to you for just in still of what the maybe Santiago, Just wondering, now? driven are of I light larger pursue assume sort do M&A Could or

continue strategic and that, we as announcement will mentioned plan. the company about were we the explicit So review in with its current of

it So call investment the million equity target year. every that we have typical $XXX

we M&A, plus if is a the opportunities. that, combination projects we let’s and earlier ones towards construction the of of, to today, work intention would say, developed, find Our about have right talked that be we

review strategic the our, say, we working So let’s review least and the not does typical change of until strategy at over. is the normally will our continue because as

about And you Okay. the and growth could something pause that then dividend could increases, sort be -- and or with review initiate what this in increase to strategic dividend of while would is terms incremental continue you CAFD the year? through rolls you dividend performance, if a there of

Yeah. Yeah.

Our current fact we doing strategy of are that the because changed has review. not a

decision current be our but you being is As a to quarter, same the the taken to ratio. of know, by an payout a XX% the policy sort dividend kind of continues have Board every

depending obviously, the of CAFD, there review. change because on no So, but

Okay.

We make that… sure want to

then… And

and working way. will same continue the operating we … exactly

disclosure? this of in And quarter was announced trending discussed. are can the batteries cost quarter, from of on terms mean was were investments and what you Understood. versus incremental for you comment And newest I PV of the the of you discussed new the growth, returns QX like, terms are then terms one, the incremental of in last prior then what’s guys of looking growth terms at? stuff in maybe where the kind

Sure.

you some hydrogen well. we the some as if plus projects, others project last the, of them them of announced mentioned a today, are the at projects we let’s So some new, I smaller including PV look quarter discussed and say, storage, have of

the is rates went like In we haven’t terms the to few reality, it in took quarters. we always we capital us last believe make for close market to And that we we that think sense. cost and develop front, done, the we the for M&A significant time up, adjust probably today, a Interest a build. that bit are of returns as projects of reasonable, and of and given seen transactions will have change new where returns, if somebody numbers on both

implying? costs. comment to you rates, about So Is in through you you response higher being what are that have your higher able interest debt not particularly rates, your the hurdle to just pass are changed

am to of I we and is going in that, is that past. way that, we we typically order saying what invest we able we what spread be yes, in believe the implying adjusted the maintain our because rates So are work, the when get are maintained our automatically to have we that case

Okay. question, you kind ago. the years go circumstances of And can couple the that absolutely of a review? what cost you as time there’s sure Through then of this one did how the a for through are today. different protect review last you disruptions and organization experience, strategic I through strategic different that and am go backdrop

Yeah.

as we we So able maybe affecting want, that paying before, do and to day-to-day business time. we can at something mentioned ago, following while you was investments, helps. the our managing experience are think do current to if both that the like and I is go same but our doing this continue intention strategy, review dividends we four we years our our also think that But the through without the things business,

you. Thank Okay.

Thank you.

Your of Grippin from comes next UBS. question William

You may proceed.

Thanks pipeline first very showing or good XX My the XX, is much there being on them then slide two think independent? between between completely question just on you a is clarifying But question. any more overlap slide of the and are investments committed just and I should those about morning.

independent. are They

good. Very

-- just pilot here hear it bit talk in of extent who’s about of think a you being the the it? is project to Is can more Okay. to hydrogen Where that? and we committed disclosed about the investments. And project more curious you. more the Thank that then off-taker on a you that should a

Sure.

-- huge area other is investment our where about an are the smaller doing. and a for will given in incremental hydrogen we that coming few enter At up last significant risk versus we are So to like is we have there time, opportunities. intention some been believe some going quarters, the be profile, this projects we same our hydrogen talking with companies

is first project in This our hydrogen.

It viable. it’s said, and the I say, electrolyzer recently is a in As and a grant. grant make facility, and driven, Union project equipment. innovation should additional European That PV let’s including a XX-megawatt Spain project very some obtained the

off-take point agreement. this At time, we in the are negotiating

we is to some should we will So because viable over. negotiation that I were specific, off-take to to be the think be in now in the regarding able quarters Nevertheless, that. not an grant that time be will not project we point the is updating that going at and able next close and secure few you agreement we be and

We we profile we expect approach one. an of are hydrogen and return working than on number do other technology. the of do projects we where manage a do more risk And again, smaller where to with this projects this

the Appreciate Great. Best color. luck. of

you. Thank

of Dumoulin-Smith Julien of have America. now We Bank

XXXX. million that $XXX outstanding? kind investment could annual Reid around in Morgan Hi. you the of about a long-term This is as curious all if Julien. the I Appreciate kind $XXX of kind pieces feel development of that’s comments -- how to on already average you for what think comments acquisitions of the curious internal I committed you about early-stage appreciate may of But thinking understand the kind with like that? come? $XXX kind to of million earlier growth just are on just arm, remaining and hitting bit that little the million the comfort actually for you was comfortable talk success target, the where

Sure.

what March, $XXX years, So, million That’s point we took of you in on our average, are a if the the plan number at average probably few number. years. if take early -- this we time, last confident have for you that’s about

additional to this combination the you million $XXX we plus that should number developing are acquisitions. the the a line on be that we finish of shared might be we the remainder between bringing projects with And some year

can assuming years, And numbers. be plan, that million. of of typically, we at again, $XXX hit geographies, we been look able we -- we typically acquisitions early in if March, we that or you we able that are above our But in acquisitions the this close close us, the right number as a some would to again, confident should be over close today, have and with to our -- year,

guess guess, kind of of kind could kind really its storage the risks of in storage the might mix take you Great. I you be interest you about that branch you storage the of That’s into are kind have just if go proportion to how those contracting I here. of to think might there, of sort would portion of as and And forward, the helpful. increasing I mix, as helpful? curious start of your of portfolio we in the an like through terms was lastly, willing talk us going portfolio think kind you just where assets, that of

Sure.

the going start states think a We penetration So transition, We including storage a where and can number about to do storage that example. need can a be key very high natural to some solar about to that solution used for part in in energy with U.S., talk what we we important the is a role. gas plays the storage to California, do. PV, now you regarding of talk locations and of of geographies see

case, are. geography. be And is obviously that and partially growth the should renewable we part partially of depending common of you where company it to a the way or regulated therefore, our contracted is in general, be that want any different energy. we do will significant But doing In believe by our storage theme

other a say, merchant, on depend contract would part only production storage does the revenues revenues. merchant prices revenues on, the where that to of to or because revenues, where portfolio current of merchant and our contracted, are let’s where in that can projects part and we XX% do merchant do believe through from we are regulation is some through willing So hours that situations are what not hours well, totally that’s contracted/regulated are at looking combination XX% go of higher but your the move we and certain guaranteed day we the knowing we in storage or and

Great. Thank the rest I you. will take offline.

Great. Thank you.

have [ph] We RBC Nielsen Capital from now Markets. Mitch

is line open. Your

Great. Thanks.

hydrogen quick hydrogen we also question, the are Just assume we earlier projects on are working an projects, the Spain? in terms in a other that of on follow-up should

and in hydrogen, in a geographies, but So, this are point at Spain we in of working U.S. number is time, mostly the

Okay. your any getting financial bringing strategic or do pipeline, Thanks. or development then to partners And you pipeline? out anticipate any on just build the

up in today earlier following we look some lot in So to need partners partners at question we the bringing to had a to finance how to it’s we have or pipeline options general, on cases, are bringing we depend or need front the options, our us. in and assets, or finance and going to that’s of a look divesting at all how not and we will including, growth something going that can

And big new guidance, any EBITDA or other then specific highlight? one material just CAFD so there and question Okay. in on the to asset last than projects swings projects or CAFD to your are portfolio, the picture of added kind EBITDA classes from any

typically or the they the, if will the you come online sun and and we say, the hedge incremental projects, shining the projects side, lower wind at close higher typically do the new difference because the how is exchange CAFD look on when quickly versus the on when a not, bit It’s depending look it the how whether or perform not EBITDA, investments. of let’s blowing rate is range, new is No. at well you

shrinks biggest the probably nothing anywhere. so there, huge are those So

there. will I it leave Thanks. Okay.

and to session it some back I you. Thank hand Instructions] say [Operator Santiago like final the remarks. to Q&A would to close

Okay.

our very attending call. you everybody Thank thank So, for much you.

you. Thank

That you have lovely today’s for Thank conclude day. a joining. call. all does Please

You disconnect line. may now your