OAKVILLE, ON - Algonquin Power & Utilities Corp. (TSX: NYSE:AQN) (NYSE: AQN) reported first-quarter adjusted earnings per share (EPS) of $0.14, which fell short of analyst expectations by $0.03.
The company's revenue also missed estimates, coming in at $737.1 million against the consensus of $820.33 million. The results reflect a period of strategic transformation for the utility company as it aims to become a pure-play regulated utility.
In the first quarter, AQN experienced a 6% increase in net utility sales and a modest 1% rise in adjusted EBITDA. However, adjusted net earnings saw a significant decline of 20% compared to the same quarter last year. This was accompanied by an 18% decrease in adjusted EPS year-over-year (YoY). The company's regulated services group revenue dropped by 7% YoY, while its renewable energy group revenue increased by 11%.
Chris Huskilson, recently appointed as CEO after serving as interim CEO since August 2023, highlighted the company's ongoing efforts to streamline operations and focus on its regulated utilities. He noted that while the regulated net utility sales and divisional operating profit showed growth, there is more work to be done to reduce costs and enhance the standalone business's profitability.
The company's financial activities in the quarter included closing approximately $2.3 billion in financing transactions, signaling investor confidence in AQN's long-term value creation strategy. These transactions included the issuance of senior notes and securitized utility tariff bonds, as well as the successful remarketing of senior notes.
AQN's focus on business simplification was evident in its acquisition of the remaining 50% equity interest in the Sandy Ridge II Wind Facility and the sale of various development assets. Despite these strategic moves, the winding down of the company's development joint venture, increased interest expenses, and a normalization of tax credit recoveries contributed to the decline in adjusted net earnings per share.
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