OREANDA-NEWS.  Atlantica Yield Reports Second Quarter 2016 Financial Results

  • Revenue for the first six months of 2016 reached $467.7 million, a 52% increase compared to the same period of the previous year
     
  • Further Adjusted EBITDA including unconsolidated affiliates increased by 37% to $362.5 million for the first six months of 2016 compared to the same period in the previous year
     
  • Operating Cash Flow increased by 49% to $117.8 million for the first six months of 2016
     
  • In the second quarter, Cash Available For Distribution ("CAFD") amounted to $39.6 million, on track to meet guidance for the year
     
  • Progress made in gaining autonomy from our sponsor and managing sponsor related risks
     
  • Dividend reinstated with a dividend of $0.29 per share declared
     
  • Acquisition of a 1 MW solar PV plant in Spain, for a total consideration of $3.2 million and an expected CAFD acquisition yield and acquisition IRR of 12%

First Half 2016 Results

August 5th, 2016 - Atlantica Yield ("ABY"), the sustainable total return company that owns a diversified portfolio of contracted assets in the energy and environment sectors, reported another period of excellent operating results. Revenues for the first six months of 2016 amounted to $467.7 million, representing a 52% increase from the comparable period of 2015 and Further Adjusted EBITDA, including unconsolidated affiliates, amounted to $362.5 million, a 37% increase compared with the same period of the previous year.

Operating Cash Flow increased by 49% compared to the same period of the previous year and reached $117.8 million. CAFD for the second quarter of 2016 amounted to $39.6 million, more than double the CAFD for the first quarter. With this, CAFD for the first half of the year including the impact of a partial refinancing of ATN2 reached $58.3 million. According to our estimations, CAFD in the first half of the year should represent between a 20% and 40% of the total for an average year, therefore we believe that we are on track to meet guidance.

Highlights

  Six-month period ended June 30,
(in thousands of U.S. dollars) 2016   2015
Revenue 467,678   308,569
Further Adjusted EBITDA incl. unconsolidated affiliates[1] 362,524   264,786
CAFD[2] 58,343   83,095

Key Performance Indicators  

  Six-month period ended June 30,
  2016   2015
Renewable energy      
MW in operation[3] 1,441   1,241
GWh produced 1,488   1,083
Conventional power      
MW in operation3 300   300
GWh produced[4] 1,150   1,223
Electrical availability4,[5] (%) 95.0%   101.8%
Electric transmission lines      
Miles in operation 1,099   1,099
Availability5(%) 99.9%   99.9%
Water      
Capacity (Mft/day)3 10.5   10.5
Availability5 (%) 102.1%   100.7%

Segment Results

 

(in thousands of U.S. dollars)

 Six-month period ended June 30,
  2016   2015  
Revenue by Geography        
North America $   165,848   $   150,157  
South America 57,981   50,632  
EMEA 243,849   107,780  
Total revenue $  467,678   $  308,569  
         
Further Adjusted EBITDA incl. unconsolidated affiliates by Geography        
North America $  141,171   $  137,297  
South America 48,057   51,623  
EMEA 173,296   75,866  
Total Further Adjusted EBITDA incl. unconsolidated affiliates $  362,524   $  264,786  
         
         
   
 

(in thousands of U.S. dollars)

 Six-month period ended June 30,  
  2016   2015  
Revenue by business sector        
Renewable energy $  342,413   $   193,427  
Conventional power 65,468   65,339  
Electric transmission lines 46,912   39,238  
Water 12,885   10,565  
Total revenue $  467,678   $  308,569  
         
 

 

Further Adjusted EBITDA incl. unconsolidated affiliates by business sector

        
Renewable energy $  257,422   $  159,164  
Conventional power 53,734   53,319  
Electric transmission lines 39,359   41,855  
Water 12,009   10,448  
Total Further Adjusted EBITDA incl. unconsolidated affiliates $   362,524   $  264,786  

During the second quarter of 2016 our portfolio performed steadily in line with expectations. In Solana, we continued to implement the scheduled improvements needed at the plant. Mojave exceeded expectations in the second quarter. Kaxu, our youngest asset, also outperformed our forecast for the quarter.  In Spain, our portfolio of solar assets continued to show solid operational performance; although revenues were slightly affected by lower radiation and lower than expected electricity prices in the wholesale market. In Spain, approximately 15% of our revenues have exposure to the price of electricity. Finally, our wind assets in Uruguay showed stable operating results, although wind continued to be lower than expected this year.

Our Conventional power generating facility in Mexico continues to show excellent performance and exceeded its contractual targets again. Finally, in our Transmission Line and Water segments, our assets comfortably achieved forecasted availability levels.

Liquidity and Debt

As of June 30, 2016, consolidated cash and cash equivalents amounted to $554.6 million, of which $84.9 million was cash available at the Atlantica Yield corporate level. In addition, short-term financial investments at the project level amounted to $80.0 million. As a result, total liquidity including short-term financial investments amounted to $634.6 million as of June 30, 2016.

As of June 30, 2016, net project debt and net corporate debt amounted to $5,042.4 million and $581.4 million, respectively. Net corporate debt / CAFD pre-corporate debt service ratio[6] is at 2.7x, below our communicated internal target of 3x.

Continued progress on Key Initiatives

During the quarter, we progressed in back-office separation from our sponsor. We completed the transfer of support function employees and we terminated the support services agreement which was in place. In addition, the split in IT systems continues to progress at good pace and is expected to be completed by the end of the year.

With respect to risks arising from our sponsor's situation, we have obtained waivers or forbearances for Cadonal in relation to cross-default provisions and 3 additional assets in relation to the minimum ownership provisions. We continue negotiations with the lenders of our project financing agreements to obtain further waivers and forbearances.

Dividend reinstated

On August 3 our Board of Directors approved a dividend of $0.29 per share expected to be paid on or about September 15, 2016 to shareholders of record as of August 31, 2016. The amount declared is the sum of $0.145 per share corresponding to the first quarter of 2016 and $0.145 per share corresponding to the second quarter of 2016. Considering the current status of waivers and forbearances on cross-default and minimum ownership provisions, the Board continues to be prudent and has decided to use the lower range of guidance and to approve a dividend for the proportional part of assets that do not require any waiver or forbearances. We expect to review upcoming quarterly dividends as we secure additional waivers and forbearances.

Acquisition of a 1 MW solar PV plant in Spain

On August 2, we closed the acquisition of a 1MW solar PV plant in Spain for a total consideration of $3.2 million. We expect the acquisition to have an equity and project IRR of 12% and an average acquisition CAFD yield of 12% as well, considering the average yearly CAFD that we expect the asset to generate. The acquisition was closed under our ROFO agreement with Abengoa S.A. The asset is adjacent to two of our existing facilities.

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

  For the three-month period ended June 30,   For the six-month period ended June 30,
  2016   2015   2016   2015
  Revenue  $  261,302    $  190,265    $  467,678    $  308,569
  Other operating income 15,615   18,304   30,440   36,376
  Raw materials and consumables used (10,226)   (5,796)   (17,601)   (10,345)
  Employee benefit expenses (3,595)   (1,223)   (5,849)   (1,794)
  Depreciation, amortization, and impairment charges (78,343)   (58,095)   (155,503)   (110,350)
  Other operating expenses (57,645)   (48,170)   (116,669)   (84,318)
Operating profit/(loss) $  127,109    $  95,283   $  202,496   $  138,137
  Financial income 797   2,878   864   3,517
  Financial expense (103,681)   (73,093)   (202,530)   (136,285)
  Net exchange differences (704)   (319)   (3,273)   (1,473)
  Other financial income/(expense), net (993)   1,337   (3,183)   4,331
Financial expense, net $  (104,581)   $  (69,197)   $  (208,122)   $ (129,910)
Share of profit/(loss) of associates carried under the equity method 1,429   2,058   3,343   3,342
Profit/(loss) before income tax $  23,956    $  28,143   $  (2,283)   $  11,569
  Income tax (19,762)   (10,304)   (16,163)   (6,428)
Profit/(loss) for the period $   4,194    $  17,839   $  (18,446)   $   5,141
Loss/(profit) attributable to non-controlling interests (1,544)   (3,958)   (4,911)   (5,814)
Profit/(loss) for the period attributable to the Company $   2,649    $  12,881   $  (23,357)   $   (673)
Weighted average number of ordinary shares outstanding (thousands) 100,217   90,442   100,217   85,279
Basic earnings per share attributable to Abengoa Yield plc (U.S. dollar per share) $  0.03    $   0.14   $  (0.23)   $  (0.01)

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

Assets As of June 30, 2016   As of Dec. 31, 2015
Non-current assets      
  Contracted concessional assets $   9,249,765    $   9,300,897
  Investments carried under the equity method 52,255   56,181
  Financial investments 90,103   93,791
  Deferred tax assets 206,294   191,314
Total non-current assets $  9,598,417    $   9,642,183
Current assets      
  Inventories 14,690   14,913
  Clients and other receivables 253,533   197,308
  Financial investments 222,191   221,358
  Cash and cash equivalents 554,561   514,712
Total current assets $   1,044,975    $   948,291
Total assets $   10,643,392    $   10,590,474
Equity and liabilities      
  Share capital  $   10,022    $   10,022
  Parent company reserves 2,313,855   2,313,855
  Other reserves (11,492)   24,831
  Accumulated currency translation differences (82,409)   (109,582)
  Retained Earnings (383,912)   (356,524)
  Non-controlling interest 122,884   140,899
Total equity  $   1,968,948    $   2,023,501
Non-current liabilities      
  Long-term corporate debt 662,990   661,341
  Long-term project debt 3,582,172   3,574,464
  Grants and other liabilities 1,629,720   1,646,748
  Related parties 115,421   126,860
  Derivative liabilities 444,321   385,095
  Deferred tax liabilities 96,669   79,654
Total non-current liabilities  $   6,531,293    $   6,474,162
Current liabilities      
  Short-term corporate debt 3,268   3,153
  Short-term project debt 1,929,906   1,896,205
  Trade payables and other current liabilities 190,237   178,217
  Income and other tax payables 19,740   15,236
Total current liabilities  $  2,143,151    $   2,092,811
Total equity and liabilities  $  10,643,392    $   10,590,474

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

  For the three-month period ended June 30,   For the six-month period ended June 30,
  2016   2015   2016   2015
Profit/(loss) for the period 4,194   17,839   (18,446)   5,141
  Financial expense and non-monetary adjustments 187,991   116,079   342,253   206,103
Profit for the period adjusted by financial expense and non-monetary adjustments $  192,185    $  133,918   $  323,807   $  211,244
  Variations in working capital (21,450)   21,037   (40,960)   379
  Net interest and income tax paid (137,372)   (113,023)   (164,985)   (132,314)
Net cash provided by/(used in) operating activities $  33,363   $  41,932   $  117,862   $  79,309
  Investment in contracted concessional assets (813)   (83,976)   (5,851)   (93,170)
  Other non-current assets/liabilities 13,057   3,143   (2,557)   3,143
  Investments in entities under the equity method 4,984   -   4,984   -
  Acquisitions of subsidiaries -   (399,817)   (19,071)   (481,845)
Net cash used in investing activities $  17,228    $  (480,650)   $  (22,495)   $ (571,872)
               
Net cash provided by/(used in) financing activities $  (63,110)    $  693,561   $  (62,471)   $  674,960
               
Net increase/(decrease) in cash and cash equivalents $  (12,519)    $  254,843   $  32,896   $  182,397
Cash and cash equivalents at beginning of the period   574,788   267,442   514,712   354,154
Translation differences in cash or cash equivalent (7,708)   5,879   6,953   (8,387)
Cash and cash equivalents at end of the period $  554,561    $  528,164   $  554,561   $  528,164
       

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 June 30,   For the six-month period ended
 June 30,
  2016   2015   2016   2015
Profit/(loss) for the period attributable to the Company $   2,649   $  13,881   $  (23,357)   $   (673)
Profit attributable to non-controlling interest 1,545   3,958   4,911   5,814
Income tax 19,762   10,304   16,163   6,428
Share of loss/(profit) of associates carried under the equity method (1,428)   (2,058)   (3,343)   (3,342)
Financial expense, net 104,581   69,197   208,122   129,910
Operating profit $   127,109   $   95,282   $  202,496   $  138,137
Depreciation, amortization, and impairment charges 78,343   58,096   155,503   110,350
Dividend from exchangeable preferred equity investment in ACBH -   4,600   -   9,200
Further Adjusted EBITDA $  205,452   $   157,978   $  357,999   $  257,687
Atlantica Yield's pro-rata share of EBITDA from Unconsolidated Affiliates 2,193   1,622   4,525   7,099
Further Adjusted EBITDA including unconsolidated affiliates $   207,645   $   159,600   $  362,524   $  264,786

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 June 30,   For the six-month period ended
 June 30,
  2016   2015   2016   2015
Further Adjusted EBITDA including unconsolidated affiliates $  207,645   $  159,600   $  362,524   $  264,786
Atlantica Yield's pro-rata share of EBITDA from unconsolidated affiliates  

(2,193)

    

(1,622)

    

(4,525)

    

(7,099)
Further Adjusted EBITDA $  205,452   $  157,978    $  357,999    $  257,687
Net interest and income tax paid (137,372)   (113,023)   (164,985)   (132,314)
Variations in working capital (21,450)   21,037   (40,960)   379
Other non-cash adjustments and other (13,268)   (24,060)   (34,192)   (46,443)
Net cash provided by operating activities $  33,363   $  41,932    $  117,862   $  79,309

Cash Available For Distribution Reconciliation

(in thousands of U.S. dollars) For the three-month period ended June 30,   For the six-month period ended
 June 30,
  2016   2015   2016   2015
Further Adjusted EBITDA including unconsolidated affiliates $ 207,645   $  159,600   $ 362,524   $  264,786
Atlantica Yield's pro-rata share of EBITDA from unconsolidated affiliates  

(2,193)

    

(1,622)

    

(4,525)

    

(7,099)
Dividends from equity method investments 4,984   -   4,984   -
Non-monetary items (12,563)   (23,741)   (30,919)   (44,970)
Interest and income tax paid (137,372)   (113,023)   (164,985)   (132,314)
Principal amortization of indebtedness (53,851)   (41,873)   (68,105)   (50,663)
Deposits into/ withdrawals from restricted accounts 12,291   (3,121)   (21,864)   (3,331)
Change in non-restricted cash at project level 59,969   43,859   18,879   60,114
Dividends paid to non-controlling interests (5,479)   -   (5,479)   -
Changes in other assets and liabilities (33,824)   24,516   (47,060)   (3,428)
ATN2 refinancing -   -   14,893   -
Cash Available For Distribution $  39,607   $  44,595   $  58,343   $  83,095

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.