Algonquin Power & Utilities Corp.- Q2-2021 Earnings, Price Target Update
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Algonquin Power & Utilities Corp (AQN, AQN.PR.A,D-TSX, AQNU-NYSE) operations include regulated public utilities and power generation, the utilities contribute 70% of earnings, power generation at 30%. The largest segment in the rate regulated public utilities segment is the electric and natural gas utilities contributing 65% of total revenues followed by water and waste water utilities at 11%. Rate Regulated Utilities includes electric, natural gas and water and wastewater utilities, natural gas and electric transmission. The Power Generation segment includes wind power, solar, hydro and natural gas generation. Revenues in the Rate Regulated Utilities segment are comprised of electricity distribution-54%, natural gas-27%, water distribution and waste water collection-14% and other -6%. US utility sales contribute 93%, Canada -3% and international 4%. For the Power Generation segment wind power contributes 60% of revenues, hydro electric – 16%, natural gas – 12% and solar 7%. Capital spending for 2021is budgeted at $4B-$4.5B. For the period from 2021 to 2025 capital spending is forecast at $9.4B split 70% to the Regulated Services Group and 30% to the Renewable Energy Group.
APUC also owns a 44% share of Atlantica Yield PLC (NYSE: AY) initially acquired during 2018 for $984.M.(41%) comprising $1.9B of the $16.4B of total assets as of Jun-30-2021. This compares to $9.4B as of Dec-31-2018.
Atlantica acquires, owns and manages a diversified international portfolio of contracted renewable energy, power generation, electric transmission, and water assets. Including investment income from Atlantica, 55% of AFFO is from Utilities, 25% from Power generation and 20% is from Atlantica and other investments.
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