AY Atlantica Sustainable Infrastructure PLC

2023 has been an important year to consolidate Atlantica’s growth strategy through its own development engine complemented by acquisitions.

 

1.

During the year, four PV assets from our development pipeline successfully reached COD.

2.

Atlantica currently has three projects under construction or in an advanced development stage in California, levering on the Inflation Reduction Act:

•

Coso Batteries 1 & 2, two standalone battery projects in California, with a combined storage capacity of 180 MWh. Both projects have PPAs signed with an investment grade utility and are currently under construction.

•

Overnight, a 150 MW PV project in California. In February 2024, we entered into a 15-year busbar PPA with an investment grade utility, under which Overnight is set to receive a fixed price per MWh, with no basis risk. We expect to include storage in a second phase of the project.

 

These three projects benefit from synergies with our existing assets and permit us to strengthen our strategic position in the Southwest.

 

3.

In addition to our pipeline in the United States, we have opportunities in most of the geographies where we are present. In fact, we currently have other projects under construction, including PV plants and transmission line expansions in South America. The latter are a good example of expansions of assets in our existing portfolio, in a low risk sector where revenues are based on availability and indexed to inflation, and in geographies where we can find attractive returns.

 

As of March 1 and considering these and other opportunities, for 2024 Atlantica has already committed or earmarked investments in the range of $175-$220 million. We expect to complement this with new developments and acquisitions during the year.

 

Atlantica is initiating guidance for 2024:

 

•

2024 expected Adjusted EBITDA in the range of $800 million to $85014 million.

•

2024 expected CAFD in the range of $220 million to $270 million.

The CAFD guidance range is wider this year due to, among other reasons, several factors that are difficult to foresee as of today:

 

-	The proceeds from the potential sale of Monterrey equity interest that we expect to close in the first half of 2024.

-	The unscheduled outage at Kaxu. Although we expect the business interruption to be covered by insurance after a 60-day deductible, the outage will affect distributions in 2024.

-	Electricity market price volatility in Spain could affect distributions in 2024, to be compensated starting in 2026 according to the regulation.

-	The level of collections at ACT could bring volatility to 2024 CAFD and this could have a positive or negative effect.

CAFD is calculated as cash distributions received by the Company from its subsidiaries minus cash expenses of the Company, including debt service and general and administrative expenses plus realized dispositions gains and losses of ownership interest in assets. CAFD per share is calculated by dividing CAFD for the year by the weighted average number of shares for the year (116,151,646 for the year ended on December 31, 2023, and 114,694,880 for December 31, 2022).

 

Our management believes Adjusted EBITDA, CAFD and CAFD per share are useful to investors and other users of our financial statements in evaluating our operating performance because it provides them with an additional tool to compare business performance across companies and across periods. Adjusted EBITDA is widely used by investors to measure a company’s operating performance without regard to items such as interest expense, taxes, depreciation and amortization, which can vary substantially from company to company depending upon accounting methods and book value of assets, capital structure and the method by which assets were acquired.

 

Our management believes CAFD and CAFD per share are relevant supplemental measures of the Company’s ability to earn and distribute cash returns to investors and are useful to investors in evaluating our operating performance because securities analysts and other interested parties use such calculations as a measure of our ability to make quarterly distributions. In addition, CAFD and CAFD per share are used by our management team for determining future acquisitions and managing our growth. Adjusted EBITDA, CAFD and CAFD per share are widely used by other companies in the same industry.

 

Our management uses Adjusted EBITDA, CAFD and CAFD per share as measures of operating performance to assist in comparing performance from period to period and aims to use them on a consistent basis moving forward. They also readily view operating trends as a measure for planning and forecasting overall expectations, for evaluating actual results against such expectations, and for communicating with our board of directors, shareholders, creditors, analysts and investors concerning our financial performance.

 

In our discussion of operating results, we have included foreign exchange impacts in our revenue and Adjusted EBITDA by providing constant currency growth. The constant currency presentation is not a measure recognized under IFRS and excludes the impact of fluctuations in foreign currency exchange rates. We believe providing constant currency information provides valuable supplemental information regarding our results of operations. We calculate constant currency amounts by converting our current period local currency revenue and Adjusted EBITDA using the prior period foreign currency average exchange rates and comparing these adjusted amounts to our prior period reported results. This calculation may differ from similarly titled measures used by others and, accordingly, the constant currency presentation is not meant to be a substitute for recorded amounts presented in conformity with IFRS as issued by the IASB nor should such amounts be considered in isolation.

 

Information presented as the pro-rata share of our unconsolidated affiliates reflects our proportionate ownership of each asset in our property portfolio that we do not consolidate and has been calculated by multiplying our unconsolidated affiliates’ financial statement line items by our percentage ownership thereto. Note 7 to our consolidated financial statements as of and for the year ended December 31, 2023 includes a description of our unconsolidated affiliates and our pro rata share thereof. We do not control the unconsolidated affiliates. Multiplying our unconsolidated affiliates’ financial statement line items by our percentage ownership may not accurately represent the legal and economic implications of holding a non-controlling interest in an unconsolidated affiliate. We include pro-rata share of depreciation and amortization, financial expense and income tax expense of unconsolidated affiliates because we believe it assists investors in estimating the effect of such items in the profit/(loss) of entities carried under the equity method (which is included in the calculation of our Adjusted EBITDA) based on our economic interest in such unconsolidated affiliates. Each unconsolidated affiliate may report a specific line item in its financial statements in a different manner. In addition, other companies in our industry may calculate their proportionate interest in unconsolidated affiliates differently than we do, limiting the usefulness of such information as a comparative measure. Because of these limitations, the information presented as the pro-rata share of our unconsolidated affiliates should not be considered in isolation or as a substitute for our or such unconsolidated affiliates’ financial statements as reported under applicable accounting principles.

 

Consolidated Statement of Operations

 (Amounts in thousands of U.S. dollars)

 

Consolidated Statement of Financial Position

(Amounts in thousands of U.S. dollars)

Assets		As of December 31, 2023				As of December 31, 2022
Non-current assets
Contracted concessional, PP&E and other Intangible assets			7,204,267				7,483,259
Investments carried under the equity method			230,307				260,031
Financial investments			136,582				176,237
Deferred tax assets			160,995				149,656
Total non-current assets		$	7,732,151			$	8,069,183
Current assets
Inventories			29,870				34,511
Trade and other receivables			286,483				200,334
Financial investments			188,886				195,893
Cash and cash equivalents			448,301				600,990
Total current assets		$	982,182			$	1,031,728
Total assets		$	8,714,333			$	9,100,911
Equity and liabilities
Share capital			11,616				11,606
Share premium			736,594				986,594
Capital reserves			858,220				814,951
Other reserves			308,002				345,567
Accumulated currency translation differences			(139,434	)			(161,307	)
Accumulated deficit			(351,521	)			(397,540	)
Non-controlling interest			165,332				189,176
Total equity		$	1,588,809			$	1,789,047
Non-current liabilities
Long-term corporate debt			1,050,816				1,000,503
Long-term project debt			3,931,873				4,226,518
Grants and other liabilities			1,233,808				1,252,513
Derivative liabilities			29,957				16,847
Deferred tax liabilities			271,288				296,481
Total non-current liabilities		$	6,517,742			$	6,792,862
Current liabilities
Short-term corporate debt			34,022				16,697
Short-term project debt			387,387				326,534
Trade payables and other current liabilities			141,713				140,230
Income and other tax payables			44,660				35,541
Total current liabilities		$	607,782			$	519,002
Total equity and liabilities		$	8,714,333			$	9,100,911

Consolidated Cash Flow Statement

 (Amounts in thousands of U.S. dollars)

Reconciliation of Adjusted EBITDA to Net cash provided by operating activities

Reconciliation of CAFD to CAFD per share

Reconciliation of CAFD and Adjusted EBITDA to

Profit/(loss) for the period attributable to the Company

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15	“Deposits into/ withdrawals from restricted accounts” and “Change in non-restricted cash at project level” are calculated on a constant currency basis to reflect actual cash movements isolated from the impact of variations generated by foreign exchange changes during the period.

Reconciliation of 2024 Target Guidance for Adjusted EBITDA to CAFD

16

The forward-looking measures of 2024 Adjusted EBITDA and CAFD are non-GAAP measures that cannot be reconciled to the most directly comparable GAAP financial measure without unreasonable effort primarily because of the uncertainties involved in estimating forward looking income tax expense, mark-to-market changes in derivatives, profit attributable to non-controlling interest and Share of loss/(profit) of entities carried under the equity method to arrive at net income and which are subtracted therefrom to arrive to CAFD.

About Atlantica

 

 

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Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.