Altius Renewable Royalties (ARR) Q4 2023 earnings summary

Executive summary

• 2023 proportionate revenue was $7.934M, adjusted EBITDA $3.765M and adjusted operating cash flow $2.986M; net loss was $1.071M.

• Growth reflected full-year production from royalties acquired in late 2022 and higher royalty revenue at GBR.

• GBR generated $10.4M in 2023 royalty revenue, up 44% YoY, and guided to $13M-$16M for 2024.

Financial highlights

• Consolidated revenue was $2.665M in 2023 versus $0.781M in 2022; net loss was $1.071M versus $0.780M.

• 2023 proportionate revenue of $7.934M comprised $5.2M royalty revenue and $2.7M interest income, versus $4.420M in 2022.

• Adjusted EBITDA was $3.765M in 2023 versus $0.830M in 2022; adjusted operating cash flow was $2.986M versus $0.163M.

• Q4 proportionate revenue was $2.3M, adjusted EBITDA $1.0M and adjusted operating cash flow $1.3M, versus $1.2M, $0.1M and $0.6M in Q4 2022.

• GBR's 2023 royalty revenue was $10.4M, up from $7.3M; operating cash flows rose 89% to $5.1M. Q4 royalty revenue was $2.6M and operating cash flows $1.5M.

Outlook and guidance

• GBR guided to $13M-$16M in 2024 royalty revenue, based on its current portfolio, construction-stage assets expected online and current merchant price assumptions.

• Guidance excludes potential additional revenue from entitlements tied to Hodson Energy and Hexagon Energy project sales.

• Expected 2024 commitments are $22.5M; the targeted risk-adjusted return threshold is at the higher end of 8%-12% amid competitive financing conditions.

• Angelo Solar was expected to reach COD in Q2 2024, with royalty revenue starting Q4 2024; a wind project from GBR's development pipeline is expected to contribute beginning Q2 2024.