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Atlantica Yield Reports Third Quarter 2016 Financial Results

  • Strong operating results for the quarter, with $295.3 million in revenue representing a 10% increase compared to the same quarter of the previous year 
  • Profit for the quarter attributable to the Company of $33.0 million, a 28% increase compared to the same quarter of the previous year
     
  • Further Adjusted EBITDA including unconsolidated affiliates[1] of $264.3 million for the quarter, a 21% increase compared to the same quarter of the previous year
     
  • Net cash provided by operating activities increased by 17% to $184.4 million for the third quarter
     
  • Cash Available For Distribution ("CAFD") of $53.8 million[2] for the quarter
     
  • Dividend declared of $ 0.163 per share

BRENTFORD, United Kingdom, Nov. 14, 2016 (GLOBE NEWSWIRE) --  Atlantica Yield ("ABY"), the sustainable total return company that owns a diversified portfolio of contracted assets in the energy and environment sectors, reported strong operating results in the third quarter of 2016. Revenues for the first nine months of 2016 amounted to $763.0 million, representing a 32% increase from the comparable period of 2015 and Further Adjusted EBITDA, including unconsolidated affiliates, amounted to $626.8 million, a 30% increase compared with the same period of the previous year.

Net cash provided by operating activities increased by 27% compared to the same period of the previous year and reached $302.2 million. CAFD[3] for the nine-month period ended September 2016 reached $112.1 million.

Highlights

  Nine-month period ended September 30,
(in thousands of U.S. dollars)   2016       2015  
Revenue $  762,950     $  575,914  
Profit for the period attributable to the Company     9,658         25,195  
Further Adjusted EBITDA incl. unconsolidated affiliates[4] $  626,786     $  483,435  
Net cash provided by operating activities     302,192         237,293  
CAFD3 $   112,123     $  141,671  

/EIN News/ --

Key Performance Indicators  

  Nine-month period ended September 30,
    2016       2015  
Renewable energy      
MW in operation[5]   1,442       1,441  
GWh produced   2,587       2,041  
Conventional power      
MW in operation[5]   300       300  
GWh produced[6]   1,799       1,845  
Electrical availability[6][7] (%)   97.7 %     101.8 %
Electric transmission lines      
Miles in operation   1,099       1,099  
Availability[7] (%)   99.9 %     99.7 %
Water      
Capacity (Mft/day)[5]   10.5       10.5  
Availability[7] (%)   102.3 %     101.1 %

Segment Results

 

(in thousands of U.S. dollars)
Nine-month period ended
September 30,
  2016   2015  
Revenue by Geography        
North America $    275,340     $   259,811    
South America   88,164       80,249    
EMEA   399,446       235,854    
Total revenue $   762,950     $   575,914    
         
Further Adjusted EBITDA incl. unconsolidated affiliates by Geography        
North America $   244,220     $   232,036    
South America   93,553       80,794    
EMEA   289,013       170,605    
Total Further Adjusted EBITDA incl. unconsolidated affiliates $   626,786     $   483,435    
   
 

(in thousands of U.S. dollars)
Nine-month period ended
September 30,
 
    2016       2015    
Revenue by business sector        
Renewable energy $   578,256     $    397,839    
Conventional power   94,921       100,015    
Electric transmission lines   70,735       61,284    
Water   19,039       16,776    
Total revenue $   762,950     $   575,914    
 

 

Further Adjusted EBITDA incl. unconsolidated affiliates by business sector
       
Renewable energy $   448,992     $   322,135    
Conventional power   80,124       80,256    
Electric transmission lines   79,909       64,740    
Water   17,760       16,304    
Total Further Adjusted EBITDA incl. unconsolidated affiliates $    626,786     $    483,435    

During the third quarter, our portfolio performed steadily in line with expectations. At Solana, we continued to perform the scheduled improvements required at the plant.  Mojave and Kaxu exceeded expectations in the first nine months of 2016. In Spain, our portfolio of solar assets continued to show excellent operational performance during the summer season. Solar radiation was better than expected across all our geographies.  Our wind assets in Uruguay have shown stable performance, although wind levels continue to be lower than expected this year. 

Regarding our availability-based assets, our transmission line assets showed excellent performance and exceeded the contractual targets once again.  Our conventional and water-segment assets have comfortably achieved forecasted availability levels.

Liquidity and Debt

As of September 30, 2016, consolidated cash and cash equivalents amounted to $673.4 million, of which $85.8 million was cash available at the Atlantica Yield corporate level. In addition, cash classified as short-term financial investments at the project level amounted to $95.4 million. As a result, total liquidity including short-term financial investments amounted to $768.8 million as of September 30, 2016.

As of September 30, 2016, net project debt and net corporate debt amounted to $5,025.2 million and $585.8 million, respectively. The net corporate debt / CAFD pre-corporate debt service ratio[8] is 2.7x, below our stated target of 3x.

Net project debt is calculated as long-term project debt plus short-term project debt minus cash and cash equivalents at the project level. Net corporate debt is calculated as long-term corporate debt plus short-term corporate debt minus cash and cash equivalents at Atlantica Yield corporate level.

Dividend declared

On November 11, 2016, our Board of Directors approved a dividend of $0.163 per share expected to be paid on or about December 15, 2016 to shareholders of record as of November 30, 2016.

Considering the current status of waivers and forbearances on cross-default and minimum ownership provisions, the Board continues to be prudent and has approved a dividend with the same reasoning as last quarter, which is to declare a divdend based on the percentage of cash generated by  the assets not requiring any waivers. The percentage used increased from 40% to 45% to reflect the likelihood of securing some additional waivers in the short term. We expect to review upcoming quarterly dividends as we secure additional waivers and forbearances.

Changes in the Board of Directors

On November 11, 2016, Atlantica Yield's Board of Directors accepted the resignation of Mr. William B. Richardson, to whom the Board of Directors expresses its gratitude for services rendered. Mr. Richardson was one of the directors appointed by Abengoa and has been on the Board of Directors since the initial public offering. Joaquin Fernandez de Pierola was appointed as Director by Abengoa in accordance with our articles of association, with immediate effect. Mr Fernandez de Pierola is the Chief Executive Officer of Abengoa.

Details of the Results Presentation Conference

Atlantica Yield's CEO, Santiago Seage, and its CFO, Francisco Martinez-Davis, will hold a conference call today, November 14th, at 8:30 am EST.

In order to access the conference call participants should dial: +1 866 305 9104 (US) / +44 (0) 203 043 2434 (UK). A live webcast of the conference call will be available on Atlantica Yield's website. Please visit the website at least 15 minutes earlier in order to register for the live webcast and download the necessary audio software.

Additionally, Atlantica Yield's management will be in New York, Boston and Dallas this week to meet with investors.

Forward-Looking Statements
This news release contains forward-looking statements. These forward-looking statements include, but are not limited to, all statements other than statements of historical facts contained in this prospectus, including, without limitation, those regarding our future financial position and results of operations, our strategy, plans, objectives, goals and targets, future developments in the markets in which we operate or are seeking to operate or anticipated regulatory changes in the markets in which we operate or intend to operate. In some cases, you can identify forward-looking statements by terminology such as "aim," "anticipate," "believe," "continue," "could," "estimate," "expect," "forecast," "guidance," "intend," "is likely to," "may," "plan," "potential," "predict," "projected," "should" or "will" or the negative of such terms or other similar expressions or terminology. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Our actual results of operations, financial condition and the development of events may differ materially from (and be more negative than) those made in, or suggested by, the forward-looking statements.

Factors that could cause actual results to differ materially from those contemplated above include, among others, general economic conditions, changes in government expenditure budgets, challenges in making acquisitions, changes in public support of renewable energy, weather conditions, legal challenges to regulations, changes to subsidies and incentives that support renewable energy sources, government regulations, the volatility of energy and fuel prices, counterparty credit risk, failure of customers to perform under contracts, our ability to enter into new contracts as existing contracts expire, reliance on third-party contractors and suppliers, failure of newly constructed assets to perform as expected, failure to receive dividends from assets, changes in our tax position, unanticipated outages at our generation facilities, the condition of capital markets generally and for yieldcos in particular our ability to access capital markets, adverse results in current and future litigation, developments at Abengoa, S.A. and our ability to maintain and grow our quarterly dividends. Furthermore, any dividends are subject to available capital, market conditions, and compliance with associated laws and regulations. These factors should be considered in connection with information regarding risks and uncertainties that may affect Atlantica Yield's future results included in Atlantica Yield's filings with the U.S. Securities and Exchange Commission at www.sec.gov.

Atlantica Yield undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or developments or otherwise. investors.

Non-GAAP Financial Measures We present non-GAAP financial measures because we believe that they and other similar measures are widely used by certain investors, securities analysts and other interested parties as supplemental measures of performance and liquidity. The non-GAAP financial measures may not be comparable to other similarly titled measures of other companies and have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our operating results as reported under IFRS as issued by the IASB. Non-GAAP financial measures and ratios are not measurements of our performance or liquidity under IFRS as issued by the IASB and should not be considered as alternatives to operating profit or profit for the year or any other performance measures derived in accordance with IFRS as issued by the IASB or any other generally accepted accounting principles or as alternatives to cash flow from operating, investing or financing activities.
We define Further Adjusted EBITDA including unconsolidated affiliates as profit/(loss) for the period attributable to the Company, after adding back loss/(profit) attributable to non-controlling interest from continued operations, income tax, share of profit/(loss) of associates carried under the equity method, finance expense net, depreciation, amortization and impairment charges, and dividends received from the preferred equity investment in ACBH.

Our management believes Further Adjusted EBITDA including unconsolidated affiliates is 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. This measure 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. Further Adjusted EBITDA including unconsolidated affiliates is also used by management as a measure of liquidity.

Our management uses Further Adjusted EBITDA including unconsolidated affiliates as a measure of operating performance to assist in comparing performance from period to period on a consistent basis and to readily view operating trends, as a measure for planning and forecasting overall expectations and for evaluating actual results against such expectations, and in communications with our Board of Directors, shareholders, creditors, analysts and investors concerning our financial performance.

We define Cash Available For Distribution as cash distributions received by the Company from its subsidiaries minus all cash expenses of the Company, including debt service and general and administrative expenses. Management believes cash available for distribution is a relevant supplemental measure of the Company's ability to earn and distribute cash returns to investors.

We believe cash available for distribution is 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, cash available for distribution is used by our management team for determining future acquisitions and managing our growth.

  


Consolidated Statements of Operations
(Amounts in thousands of U.S. dollars)

  For the three-month period ended September 30,   For the nine-month period ended September 30,
    2016       2015       2016       2015  
  Revenue $   295,272     $   267,345     $   762,950     $   575,914  
  Other operating income   17,218       18,400       47,657       54,776  
  Raw materials and consumables used   (6,880 )     (8,444 )     (24,481 )     (18,774 )
  Employee benefit expenses   (4,747 )     (1,083 )     (10,596 )     (2,877 )
  Depreciation, amortization, and  impairment charges   (78,900 )     (73,642 )     (234,403 )     (183,992 )
  Other operating expenses   (59,936 )     (64,290 )     (176,605 )     (148,624 )
Operating profit/(loss) $   162,027     $   138,286     $    364,522     $   276,423  
  Financial income   132       (53 )     996       3,464  
  Financial expense   (101,553 )     (98,567 )     (304,083 )     (234,852 )
  Net exchange differences   (1,638 )     2,759       (4,911 )     1,286  
  Other financial income/(expense), net   4,358       1,407       1,175       5,738  
Financial expense, net $  (98,701 )   $   (94,454 )   $   (306,823 )   $ (224,364 )
Share of profit/(loss) of associates carried under the equity method   1,760       1,288       5,104       4,630  
Profit before income tax $   65,086     $   45,120     $    62,803     $   56,689  
  Income tax   (29,801 )     (15,981 )     (45,964 )     (22,409 )
Profit for the period $    35,285     $   29,139     $    16,839     $    34,280  
Loss/(profit) attributable to non-controlling interests   (2,271 )     (3,271 )     (7,181 )     (9,085 )
Profit for the period attributable to the Company $    33,014     $   25,868     $    9,658     $    25,195  
Weighted average number of ordinary shares outstanding (thousands)   100,217       100,217       100,217       90,332  
Basic earnings per share attributable to Atlantica Yield plc (U.S. dollar per share) $   0.33     $    0.26     $   0.10     $  0.28  


Consolidated Statement of Financial Position
(Amounts in thousands of U.S. dollars)

Assets As of September 30, 2016   As of December 31, 2015
Non-current assets      
  Contracted concessional assets $                9,243,143     $    9,300,897  
  Investments carried under the equity method   54,250       56,181  
  Financial investments   66,926       93,791  
  Deferred tax assets   193,837       191,314  
Total non-current assets $   9,558,156     $    9,642,183  
Current assets      
  Inventories   15,014       14,913  
  Clients and other receivables   271,642       197,308  
  Financial investments   238,054       221,358  
  Cash and cash equivalents   673,447       514,712  
Total current assets $    1,198,157     $    948,291  
Total assets $    10,756,313     $    10,590,474  


Equity and liabilities      
  Share capital $                      10,022     $   10,022  
  Parent company reserves   2,284,792       2,313,855  
  Other reserves   (26,199 )     24,831  
  Accumulated currency translation differences   (65,664 )     (109,582 )
  Retained Earnings   (350,897 )     (356,524 )
  Non-controlling interest   121,994       140,899  
Total equity $   1,974,048     $           2,023,501  
Non-current liabilities      
  Long-term corporate debt $                  663,824     $   661,341  
  Long-term project debt   3,596,976       3,574,464  
  Grants and other liabilities   1,620,857       1,646,748  
  Related parties   107,222       126,860  
  Derivative liabilities   471,611       385,095  
  Deferred tax liabilities   107,740       79,654  
Total non-current liabilities $    6,568,230     $           6,474,162  
Current liabilities      
  Short-term corporate debt   7,834       3,153  
  Short-term project debt   2,015,943       1,896,205  
  Trade payables and other current liabilities   167,549       178,217  
  Income and other tax payables   22,709       15,236  
Total current liabilities $   2,214,035     $    2,092,811  
Total equity and liabilities $   10,756,313     $    10,590,474  

Consolidated Cash Flow Statements
(Amounts in thousands of U.S. dollars)


 
For the three-month period ended September 30,   For the nine-month period ended September 30,
    2016       2015       2016       2015  
Profit/(loss) for the period   35,285       29,139       16,839       34,280  
Financial expense and non-monetary adjustments   192,496       168,702       534,749       374,805  
Profit for the period adjusted by financial expense and non-monetary adjustments $   227,781     $   197,841                         $        551,588     $        409,085  
               
Variations in working capital   (16,269 )     6,304       (57,229 )     6,683  
Net interest and income tax paid   (27,183 )     (46,161 )     (192,167 )     (178,475 )
Net cash provided by operating activities $    184,329     $   157,984                         $        302,192     $       237,293  
               
Investment in contracted concessional assets   (101 )     (6,627 )     (5,952 )     (99,797 )
Other non-current assets/liabilities   (17,250 )     551       (19,807 )     3,694  
Investments in entities under equity method   -       4,163       4,984       4,163  
Acquisitions of subsidiaries and non-controlling interest   (14,833 )     (275,298 )     (33,905 )     (757,143 )
Net cash used in investing activities $    (32,184 )   $ (277,211                     )   $       (54,680 )   $     (849,083 )
               
Net cash provided by/(used in) financing activities $  (39,283 )   $  253,482                       $      (101,755 )   $       928,442  
               
Net increase/(decrease) in cash and cash equivalents $    112,862     $                    134,255     $        145,757     $       316,652  
Cash and cash equivalents at beginning of the period     554,561       528,164       514,712       354,154  
Translation differences in cash or cash equivalent   6,024       89       12,978       (8,298 )
Cash and cash equivalents at end of the period $   673,447     $                   662,508     $        673,447     $        662,508  

Reconciliation of Further Adjusted EBITDA including unconsolidated affiliates to Profit/(loss) for the period attributable to the company

(in thousands of U.S. dollars) For the three-month period ended September 30,   For the nine-month period ended September 30,
    2016       2015       2016       2015  
Profit/(loss) for the period attributable to the Company $    33,014     $   25,868     $  9,658     $    25,195  
Profit attributable to non-controlling interest   2,271       3,271       7,181       9,085  
Income tax   29,801       15,981       45,964       22,409  
Share of loss/(profit) of associates carried under the equity method   (1,760 )     (1,288 )     (5,104 )     (4,630 )
Financial expense, net   98,701       94,454       306,823       224,364  
Operating profit $    162,027     $   138,286     $   364,522     $   276,423  
Depreciation, amortization, and impairment charges   78,900       73,642       234,403       183,992  
Dividend from exchangeable preferred equity investment in ACBH   21,179       4,600       21,179       13,800  
Further Adjusted EBITDA $  262,105     $   216,529     $   620,104     $   474,215  
Atlantica Yield's pro-rata share of EBITDA from Unconsolidated Affiliates   2,157       2,121       6,682       9,220  
Further Adjusted EBITDA including unconsolidated affiliates $    264,262     $  218,650     $  626,786     $    483,435  

Reconciliation of Further Adjusted EBITDA including unconsolidated affiliates to net cash provided by operating activities

(in thousands of U.S. dollars) For the three-month period ended September 30,   For the nine-month period ended
 September 30,
    2016       2015       2016       2015  
Net cash provided by operating activities $   184,329     $    157,984     $   302,192     $   237,293  
Net interest and income tax paid   27,183       46,161       192,167       178,475  
Variations in working capital   16,269       (6,304 )     57,229       (6,683 )
Other non-cash adjustments and other   34,324       18,688       68,516       65,130  
Further Adjusted EBITDA $    262,105     $    216,529     $    620,104     $   474,215  
Atlantica Yield's pro-rata share of EBITDA from unconsolidated affiliates    

2,157
       

2,121
       

6,682
       

9,220
 
Further Adjusted EBITDA including unconsolidated affiliates $  264,262     $    218,650     $    626,786     $    483,435  

Cash Available For Distribution Reconciliation

(in thousands of U.S. dollars) For the three-month period ended September 30,   For the nine-month period ended
 September 30,
    2016       2015       2016       2015  
Profit/(loss) for the period attributable to the Company $    33,014     $   25,868     $  9,658     $    25,195  
Profit attributable to non-controlling interest   2,271       3,271       7,181       9,085  
Income tax   29,801       15,981       45,964       22,409  
Share of loss/(profit) of associates carried under the equity method   (1,760 )     (1,288 )     (5,104 )     (4,630 )
Financial expense, net   98,701       94,454       306,823       224,364  
Operating profit $    162,027     $   138,286     $   364,522     $   276,423  
Depreciation, amortization, and impairment charges   78,900       73,642       234,403       183,992  
Dividend from exchangeable preferred equity investment in ACBH   21,179       4,600       21,179       13,800  
Atlantica Yield's pro-rata share of EBITDA from Unconsolidated Affiliates   2,157       2,121       6,682       9,220  
Further Adjusted EBITDA including unconsolidated affiliates $    264,262     $  218,650     $  626,786     $    483,435  
Atlantica Yield's pro-rata share of EBITDA from unconsolidated affiliates    

(2,157


)
     

(2,121


)
     

(6,682


)
     

(9,220


)
Dividends from equity method investments   -       4,163       4,984       4,163  
Non-monetary items   (32,686 )     (21,447 )     (63,605 )     (66,417 )
Interest and income tax paid   (27,183 )     (46,161 )     (192,167 )     (178,475 )
Principal amortization of indebtedness   (18,792 )     (38,573 )     (86,897 )     (89,236 )
Deposits into/ withdrawals from restricted accounts   (43,027 )     (10,090 )     (64,891 )     (13,420 )
Change in non-restricted cash at project level   (90,385 )     (62,285 )     (71,506 )     (2,171 )
Dividends paid to non-controlling interests   (3,473 )     (4,665 )     (8,952 )     (4,665 )
Changes in other assets and liabilities   7,221       21,105       (39,840 )     17,677  
ATN2 refinancing   -       -       14,893       -  
Cash Available For Distribution[9] $    53,780     $    58,576     $    112,123     $    141,671  

About Atlantica Yield

Atlantica Yield plc is a total return company that owns a diversified portfolio of contracted renewable energy, power generation, electric transmission and water assets in North & South America, and certain markets in EMEA (www.atlanticayield.com). 

 

Chief Financial Officer
Francisco Martinez-Davis
E  ir@atlanticayield.com

 
Investor Relations & Communication
Leire Perez
E  ir@atlanticayield.com
T  +44 20 3499 0465 

 

 




[1] Further Adjusted EBITDA includes our share in EBITDA of unconsolidated affiliates and the dividend from our preferred equity investment in Brazil or its compensation (see reconciliation on page 12).

[2] The third quarter CAFD includes $21.2 million of ACBH dividend compensation in the third quarter of 2016.

[3] CAFD includes $21.2 million of ACBH dividend compensation in the third quarter of 2016 and $14.9 million proceeds of ATN2 refinancing in the first quarter of 2016.

[4] Further Adjusted EBITDA includes our share in EBITDA of unconsolidated affiliates and the dividend from our preferred equity investment in Brazil or its compensation (see reconciliation on page 12).

[5] Represents total installed capacity in assets owned at the end of the period, regardless of our percentage of ownership in each of the assets.

[6] Conventional production and availability were impacted by a periodic scheduled major maintenance in February 2016

[7] Availability refers to actual availability divided by contracted availability.

[8] Based on mid-point of guidance range for CAFD for 2016.

[9] CAFD includes $21.2 million of ACBH dividend compensation in the third quarter of 2016 and $14.9 million proceeds of ATN2 refinancing in the first quarter of 2016.