Post Earnings Coverage as Atlantica Yield Reported Narrower than Expected Loss
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LONDON, UK / ACCESSWIRE / May 31, 2017 / Active Wall St. announces its post-earnings coverage on Atlantica Yield PLC (NASDAQ: ABY). The Company released its third quarter fiscal 2017 financial results on May 15, 2017. The sustainable total return Company that owns contracted assets in the energy and environment sectors reported net loss improved on a y-o-y basis. Register with us now for your free membership at:
One of Atlantica Yield's competitors within the Electric Utilities space, Dominion Energy, Inc. (NYSE: D), announced on May 04, 2017, its unaudited reported earnings determined in accordance with Generally Accepted Accounting Principles (reported earnings) for Q1 2017 which ended on March 31, 2017. AWS will be initiating a research report on Dominion Energy in the coming days.
Today, AWS is promoting its earnings coverage on ABY; touching on D. Get our free coverage by signing up to:
During the three-month period ended March 31, 2017, Atlantica Yield's revenue amounted to $198.1 million representing a 4% decrease in comparison with the revenue generated in Q1 2016 of $206.38 million. The decrease was due in part to translation differences driven by the depreciation of Euro against US dollar, and also due to the lower production at Kaxu, the Company's solar plant in South Africa which experienced technical problems at the end of 2016. The Company's revenue numbers came in below analysts' consensus of $208 million.
For Q1 2017, Atlantica Yield's further adjusted EBITDA, including unconsolidated affiliates, amounted to $165.0 million representing a 7% increase compared with $154.9 million in Q1 2016 despite lower than expected solar radiation in the Southwest of the United States. Furthermore, adjusted EBITDA margin improved to 83.3% in the reported quarter from 75% in the prior year's same quarter
Atlantica Yield's net loss attributable to the Company for the quarter was $11.77 million, or $0.12 per share, compared to a loss of $26.0 million, or $0.26 per share, in Q1 2016. The Company's net loss was better than Wall Street's expectations for a loss of $0.19 per share.
Important Events during the Quarter
In February 2017, Atlantica Yield successfully refinanced part of its corporate debt by signing a note facility with a group of funds managed by Westbourne Capital, an Australian infrastructure investor for a total amount of €275 million (approximately $293 million). With this new financing, the Company has evenly staggered the maturity of the new notes in a manner that each of the three notes of approximately €92 million matures in 2022, 2023, and 2024. Atlantica Yield had fixed the interest rate to 5.5% via an interest rate swap.
In addition, in Q1 2017, Atlantica Yield completed the acquisition of a 12.5% stake in a 114-mile transmission line which will connect California and Arizona. The asset will receive a FERC regulated rate of return, and is currently under development, with COD expected in 2020. The Company expects its total investment to be up to $10 million in the coming three years and stated that it holds a right to acquire an additional 12.5% interest in the asset.
Finally, in March 2017, Atlantica Yield obtained a waiver in Kaxu which waives any past potential cross-default with Abengoa in the project finance agreement and allows reduction of ownership by Abengoa below the 35% threshold.
Cash Matters
Atlantica Yield's total liquidity as of March 31, 2017, represents $673.7 million and consists of $589.4 million of consolidated cash and cash equivalents, of which $102.0 million was available at the Atlantica corporate level and $84.3 million of cash classified as short-term financial investments at the project level.
As of March 31, 2017, Atlantica Yield's net project debt amounted to $4,922.9 million and net corporate debt amounted to $565.9 million. The net corporate debt / CAFD pre-corporate debt service ratio improved to 2.6x compared to 2.7x as of December 31, 2016, and is significantly below the Company's stated target of 3x.
During Q1 2017, Atlantica Yield's net cash provided by operating activities amounted to $86.4 million, in-line with $84.5 million in Q1 2016. Cash Available for Distribution ("CAFD") generation reached $60.9 million in the reported quarter compared to $18.7 million in the prior year's corresponding quarter.
Dividend
On May 12, 2017, Atlantica Yield's Board of Directors approved a dividend of $0.25 per share. This dividend is expected to be paid on or about June 15, 2017, to shareholders of record as of May 31, 2017.
Stock Performance
At the closing bell, on Tuesday, May 30, 2017, Atlantica Yield's stock rose slightly by 0.05%, ending the trading session at $20.53. A total volume of 868.16 thousand shares were traded at the end of the day, which was higher than the 3-month average volume of 482.02 thousand shares. In the last six months and previous twelve months, shares of the Company have surged 8.28% and 15.14%, respectively. Moreover, the stock gained 6.10% since the start of the year. The stock is trading at a PE ratio of 218.40 and has a dividend yield of 4.87%. At Tuesday's closing price, the stock's net capitalization stands at $2.07 billion.
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