Altius Renewable Royalties (ARR) Q2 2024 earnings summary

Executive summary

• Q2 2024 GBR joint venture royalty revenue reached $3.1 million, up 55% year-over-year, with $0.9 million investment income from interconnection and loan agreements.

• Deployed nearly $500 million at the joint venture level since 2019, holding royalties on dozens of projects across major U.S. power regions, including 12 operating royalties totaling 2.6 GW.

• $30 million invested in Nokomis Energy, securing rights to 77 distributed generation solar projects in Minnesota and nearby regions.

• New $6.1 million interconnection support facility with Red Stone Renewables for deposits on 2 solar projects.

• In July, a loan facility of up to $40 million was provided to Nova Clean Energy, with GBR entitled to up to 0.5 GW of additional royalties.

Financial highlights

• Q2 2024 GBR revenue was $3.1 million, up 55% from $2 million in Q2 2023.

• Operating cash flow for Q2 2024 was $0.9 million, down from $1 million in Q2 2023 due to interest on new credit facilities.

• Cash balance stood at $65.9 million, with $21.1 million in expected 2024 commitments and $105.6 million in available GBR credit facilities.

• Since 2019, $360.2 million has been deployed, with an additional $103.8 million of potential commitments.

• 2024 revenue guidance reiterated at $13 million–$16 million.

Outlook and guidance

• Expects continued strong demand for renewable energy and shovel-ready projects, with a 19.5 GW development pipeline across wind, solar, and storage.

• PPA prices have increased nearly 12% year-over-year from Q2 2023 to Q2 2024.

• Estimated 2024 revenue mix: 63% contracted, 37% merchant, assuming El Sauz contributes as planned.

• Focus remains on deploying remaining capital into cash-flowing, operating royalties.

• Stated target pre-tax unlevered return threshold is approximately 8-12% for investments.