Algonquin Power & Utilities Corp.- Q1-2022 Earnings, Price Target Update

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Algonquin Power & Utilities Corp (AQN, AQN.PR.A,D-TSX, AQNU-NYSE) is a North American company owning power generation, transmission, and public utilities. Public utilities include regulated water, natural gas, and electricity distribution utilities mainly in the US. The generation and transmission segment group sells electricity produced by its energy facilities, including hydroelectric, wind, solar, and thermal power plants. Algonquin's wind farms account for most of its generation revenue. Transmission focuses on building and investing in natural gas pipelines and electric transmission systems.

The utilities contribute 70% of earnings, power generation at 30%. Rate Regulated Utilities includes electric, natural gas and water and wastewater utilities, natural gas and electric transmission. The largest segment in the rate regulated public utilities segment is the electric and natural gas utilities comprising 72% and 15% of the rate base followed by water and waste water utilities at 13%. The Power Generation segment total 4,100MW of generating capacity and mainly comprised of wind power and also 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 2022is budgeted at $4.2B. For the period from 2022 to 2026 capital spending is forecast at $12.4B split 70% to the Regulated Services Group and 30% to the Renewable Energy Group. Total assets as of Mar-31-2022 were $17.7B

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 $17.7B of total assets as of Mar-31-2022. 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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