Altius Renewable Royalties Corp. (TSX: ARR) (OTCQX: ATRWF) (“ARR” or the “Corporation”), is pleased to report its financial results for the first quarter of 2024 with a conference call to follow May 3, 2024 at 9:30 am EDT.
The Corporation’s 50% owned Great Bay Renewables (“GBR”) joint venture recorded $4.9 million in royalty revenue for the quarter ended March 31, 2024 compared to $2.0 million in the comparative period in 2023, an increase of 145%. Operating cash flows at GBR were $0.3 million for the quarter ended March 31, 2024 compared to $1.0 million in the comparative 2023 period primarily due to interest paid in the current quarter related to its recently entered into credit facilities.
Selected financial information for the Corporation is included in the table below:
| Three Months ended | ||||||
| March 31, 2024 | March 31, 2023 | |||||
| Revenue per consolidated financial statements | $ | 1,087,000 | $ | 558,000 | ||
| Net loss | (240,000 | ) | (106,000 | ) | ||
| Total assets | 218,915,000 | 202,004,000 | ||||
| Total liabilities | 10,370,000 | 6,301,000 | ||||
| Non-GAAP financial measures(1) | ||||||
| Proportionate revenue (1) | $ | 3,563,000 | $ | 1,554,000 | ||
| Adjusted EBITDA (1) | 2,513,000 | 569,000 | ||||
| Adjusted operating cash flow(1) | 637,000 | 19,000 | ||||
For the quarter ended March 31, 2024, ARR reported a net loss of $0.2 million, proportionate revenue(1) of $3.6 million, adjusted EBITDA(1) of $2.5 million and adjusted operating cash flow(1) of $0.6 million. This compares to a net loss of $0.1 million, proportionate revenue(1) of $1.6 million, adjusted EBITDA(1) of $0.6 million and adjusted operating cash flow(1) of $0.02 million for the same period in 2023. Total proportionate revenue(1) for the quarter ended was comprised of $2.5 million in royalty revenue and $1.1 million in interest income.
Included in the GBR joint venture’s first quarter revenue is $1.3 million from the previously noted escrow release from the Titan Solar transmission upgrade as well as $1.4 million of revenue recognized related to Hexagon Energy LLC (“Hexagon”) project sales proceeds, both of which are non-recurring, and resulted in increased revenue.
During the quarter Hexagon sold a 138 MWac solar energy project in Virginia to further augment the development stage royalties held by GBR. GBR is entitled to 10% of the project sales proceeds from any project sales to third parties by Hexagon, or $1.4 million, which does not count towards the minimum return threshold that determines the amount of renewable royalties to be granted under the agreement. In addition GBR elected to receive up to an additional 20% of sales proceeds, or $2.8 million, which is treated as return of capital and counted towards the minimum return threshold calculation.
The Corporation’s current quarter results reflect the proportionate share of increased revenues at GBR offset by the proportionate share of increased costs including GBR’s non-cash share of loss in equity investments Bluestar Energy Capital LLC (“Bluestar”) and Nova Energy LLC (“Nova”) of approximately $2.9 million. Bluestar and Nova continue to engage in early-stage renewable energy development resulting in increased levels of expenses with minimal offsetting revenues thus far at those entities. Nova continues to make good progress in building its greenfield development pipeline as the current portfolio of projects has now grown to approximately 5 GW of wind, solar and battery storage projects.
During the quarter ended March 31, 2024 GBR announced that it had entered into a $30.0 million royalty investment with Apex Clean Energy (“Apex”) related to Apex’s 195 MWac Angelo Solar project in Tom Green County, Texas (“Angelo”) which is anticipated to achieve commercial operations in Q2 with royalty payments commencing in Q4 of this year. In addition, the Canyon Wind project royalty achieved commercial operations and began contributing to GBR’s revenue during the quarter.
GBR also entered into an interconnection (IC) support facility with Hexagon during the quarter, where GBR is providing financing for the refundable portion of interconnection deposits to support the further development of specific renewable energy projects that are also subject to its royalty funding agreement with Hexagon.
For 2024, GBR is maintaining the previously provided annual revenue guidance range of $13.0 million to $16.0 million.
At March 31, 2024 the Corporation held cash of $67.2 million and has 2024 expected commitments related to existing GBR investment agreements of approximately $19.1 million. In addition, GBR has available liquidity of $105.6 million under its credit facilities.
Commenting on the quarter, Frank Getman, CEO of GBR, said, “It was a busy quarter with the closing of the Angelo Solar investment with Apex and adding Canyon Wind, which stems from our TGE development portfolio investment, to our growing portfolio of operating royalties. We currently have 895 MW of projects with GBR royalties under construction which will contribute to our operating cash flow later this year and next. Market conditions remain attractive for future deployment into new royalty investments.”
Brian Dalton, CEO of ARR added, “While the royalty portfolio continues to grow, I also commend GBR for continuing to innovate and offer solutions that address industry bottlenecks, such as the new interconnection support facility with Hexagon in the MISO Regional Transmission Organization (“RTO”). We look forward to seeing further growth this year and the continuing development of new use cases for GBR’s royalty financing structures.”
Non-GAAP Financial Measures
- Management uses the following non-GAAP financial measures: proportionate royalty and other revenue (“proportionate revenue”), adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA) and adjusted operating cash flow. Management uses these measures to monitor the financial performance of the Corporation and believes these measures enable investors and analysts to compare the Corporation’s financial performance with its competitors and/or evaluate the results of its underlying business which are held primarily in jointly controlled entities. These measures are intended to provide additional information, not to replace International Financial Reporting Standards (IFRS) measures, and do not have a standard definition under IFRS and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. As these measures do not have a standardized meaning, they may not be comparable to similar measures provided by other companies. Further information on the composition and usefulness of each non-GAAP financial measure, including reconciliation to their most directly comparable IFRS measures, is included in the non-GAAP financial measures section of our MD&A.
Conference Call Details
A conference call and webcast will be held on Friday, May 3, 2024 at 9:30 am EDT to provide an update and to offer an open Q&A session for analysts and investors. Access details are as follows:
| DATE | Friday, May 3, 2024 at 9:30 am EDT | |||
| EVENT | Altius Renewable Royalties Q1 2024 Financial Results Conference Call and Webcast | |||
| DIAL IN | (+1) 289 514 5100 OR (+1) 800 717 1738 | |||
| WEBCAST | ARR Q1 2024 |
About ARR
ARRis a renewable energy royalty company whose business is to provide long-term, royalty level investment capital to renewable power developers, operators, and originators. ARR has 35 renewable energy royalties representing approximately 2.4 GW of renewable power on operating projects and an additional approximate 5.8 GW on projects in construction and development phase, across several regional power pools in the U.S. The Corporation also expects future royalties from GBR’s investments in Bluestar Energy Capital, Hodson Energy and Hexagon Energy, which increase the total development project pipeline to approximately 18.6 GW. The Corporation combines industry expertise with innovative, partner-focused solutions to further the growth of the renewable energy sector as it fulfills its critical role in enabling the global energy transition.
Forward-looking information
This news release contains forward‐looking information. The statements are based on reasonable assumptions and expectations of management and ARR provides no assurance that actual events will meet management’s expectations. In certain cases, forward‐looking information may be identified by such terms as “anticipates”, “believes”, “could”, “estimates”, “expects”, “may”, “shall”, “will”, or “would”. Although ARR believes the expectations expressed in such forward‐looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those projected. Readers should not place undue reliance on forward-looking information. ARR does not undertake to update any forward-looking information contained herein except in accordance with securities regulation.
