Algonquin Power & Utilities (AQN) Q3 2024 earnings summary

Executive summary

• Strategic transition to a pure-play regulated utility is progressing, with major asset sales, including renewables and Atlantica, and business simplification underway.

• Sale of renewables business (excluding hydro) for up to $2.5 billion expected to close in Q4 2024 or Q1 2025; Atlantica sale closing anticipated December 12, 2024.

• Completed rollout of Customer First SAP system to enhance efficiency and focus.

• Appointed new board members and revamped organizational processes to drive consistent results.

• Progress made on rate case filings to improve earned returns, with continued commitment to customer service and appropriate returns.

Financial highlights

• Q3 2024 revenue from continuing operations grew 1% year-over-year to $573.2M; Adjusted EBITDA up 4% to $264.4M.

• Net earnings from continuing operations were $49.5M, up from a loss of $174.9M in Q3 2023.

• Adjusted Net Earnings for Q3 were $64.9M, down 5% year-over-year; Adjusted EPS down 20%.

• Dividends per share for Q3 were $0.0650, down 40% year-over-year.

• Q3 balance sheet debt stands at $8.7B, with long-term debt at $7.48B at quarter-end.

Outlook and guidance

• No 2025 guidance provided; full-year guidance to be issued with Q4 results.

• Over $700 million in potential net increases to authorized rate base from major rate cases in California, Missouri, and Arizona; additional cases planned through 2027.

• Rate case filings in progress or planned, targeting equity ratios around 52-53% and allowed ROEs of 10-11%.

• 2025 will be the first year with full focus on regulated business; short-term results impacted by timing of rate cases.

• Rate case filings in CalPeco Electric, Empire Electric, and Litchfield Park Water expected to recover significant invested capital and reduce regulatory lag.