Algonquin Energy & Utilities Corp. (AQN) is pursuing the sale of its renewables enterprise, the Renewable Vitality Group, to give attention to its utilities enterprise.
The choice comes after the corporate’s board of administrators initiated a strategic evaluate of its renewables division, AQN outlined in a information launch Thursday.
Upon the profitable sale of the division, AQN mentioned it expects to be a “competitively capitalized, pure-play regulated utility with a steady and wholesome development outlook”, based on the discharge.
“Over the previous few months, the AQN Board of Administrators, along with our unbiased monetary advisor, has performed an intensive evaluate of our companies with the intention of enhancing worth for our shareholders”, AQN interim CEO Chris Huskilson mentioned.
“We now have two robust companies – a well-positioned regulated utility enterprise with diversified property and engaging jurisdictions, and a stable, aggressive renewables enterprise with scale and robust property. That mentioned, we imagine the worth of our property will not be totally realized in our present construction. We due to this fact decided that specializing in our regulated enterprise going ahead and pursuing a sale of the renewables enterprise is the perfect path ahead for AQN,” he added.
“We’re assured that the supposed sale will unlock AQN’s worth as a pure-play regulated utility by simplifying our construction and enabling us to give attention to decrease threat regulated funding alternatives, with higher operational effectivity and capital self-discipline,” Huskilson continued.
“We count on to make use of the proceeds of a renewables transaction to cut back our debt and fund share repurchases. As well as, our targets for the transaction are to assist our present dividend, scale back our price of capital, and keep our investment-grade BBB credit standing. On the identical time, we are going to search to maximise the worth of the renewables enterprise and place it with a brand new proprietor that may facilitate its long-term success by way of the continuing vitality transition,” he went on to state.
JP Morgan will act because the AQN’s monetary advisor in reference to the sale of the Renewable Vitality Group, the information launch mentioned.
AQN reported adjusted internet earnings of $56.2 million, a lower of 49 % in comparison with second-quarter 2022 internet earnings of $109.6 million, based on the discharge.
The corporate posted income of $627.9 million for the second quarter, a rise of 1 % 12 months over 12 months on the earlier 12 months’s quarter income of $619.4 million. Its adjusted EBITDA was $277.7 million, a lower of 4 % in comparison with $289.2 million within the second quarter of 2022.
“Whereas our second quarter 2023 outcomes had been negatively impacted by unfavorable climate, we stay targeted on our development outlook and long-term success”, Huskilson mentioned.
Particularly, the Renewable Vitality Group’s wind services generated 75.1 % of long-term common useful resource, which was a 22 % lower in comparison with the identical interval in 2022, accounting for about two cents of year-over-year adjusted internet earnings per frequent share decline, AQN mentioned.
The Renewable Vitality Group additionally noticed a $14.0 million lower in “Hypothetical Liquidation at E-book Worth associated to finish of the manufacturing tax credit score eligibility on sure initiatives commissioned in 2012, as beforehand skilled within the latter half of 2022 and first quarter of 2023,” AQN mentioned.
In a separate information launch, AQN’s board declared a dividend of $0.1085 per frequent share, payable on October 13 to the shareholders of file on September 28 for the interval from July 1 to September 30.
The board additionally declared a dividend of $0.24 (CAD 0.32263) per collection A most well-liked share and $0.24 (CAD 0.31819) per collection D most well-liked share, payable in money on October 2 to holders of file on September 15 for the interval from June 30 to, however excluding, September 30.
AQN additionally suspended the dividend reinvestment plan for its frequent shares, efficient March 16.
To contact the creator, e mail firstname.lastname@example.org