Atlantic Power Corporation
Q4 2020 Earnings Call Transcript

Published:

  • Operator:
    Good morning, and welcome to the Atlantic Power Corporation Fourth Quarter and Year-End 2020 Results and Conference Call. All participants will be in a listen-only mode. After today’s presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Ron Bialobrzeski, Director of Finance. Please go ahead.
  • Ron Bialobrzeski:
    Welcome, and thank you for joining us this morning. Our results for the three months and year ended December 31, 2020, were issued by press release yesterday afternoon and are available on our website, www.atlanticpower.com and on EDGAR and SEDAR. Management’s prepared remarks and the accompanying presentation for today’s call and webcast can be found in the Conference Calls section of our website. A replay of today’s webcast will be available on our website following the call. Financial figures that we will be presenting are stated in U.S. dollars and are approximate, unless otherwise noted.
  • Jim Moore:
    Thank you, Ron. Welcome everyone. Good morning and thank you for joining us today. With me on the call this morning are Terry Ronan, our CFO; Joe Cofelice, our EVP, Commercial Development; Nick Galotti, our SVP, Operations, and several other members of the Atlantic power management team. The results for the fourth quarter and the full year 2020 are provided in the press release, the presentation and the prepared remarks, which were posted on our website last evening. Please review those materials. I will cover the highlights of the past year and our financial results very briefly and then devote most of my time this morning to discussing the agreement we announced for Atlantic Power to be acquired by I Squared Capital. Following my remarks, we will take questions. Our financial results for the fourth quarter and year were near the top end of our guidance for Project Adjusted EBITDA and exceeded our estimate of operating cash flow. We ended 2020 with $142 million of liquidity, including $14 million of discretionary cash. During the year we used our strong operating cash flow to repay $76 million of consolidated debt, as planned. Despite modestly lower Project Adjusted EBITDA, our consolidated leverage ratio improved to 3.6 times from 3.8 times a year ago. We expect to repay approximately $96 million of consolidated debt in 2021, which should drive further improvement in our leverage ratio. 2020 was also a strong year for capital allocation. We invested $48 million in the repurchases of common and preferred shares at prices, averaging $2.04 per common share and CAD15.17 for preferred shares.
  • Operator:
    Thank you. The first question is from Rupert Merer from National Bank. Please go ahead.
  • Rupert Merer:
    Good morning everyone.
  • Ron Bialobrzeski:
    Good morning.
  • Jim Moore:
    Hello, Rupert.
  • Rupert Merer:
    So congratulations to the team on the deal. And thank you for the presentation this morning. Just wondering if you can walk us through the expected timeline and milestones to move this deal to completion, if, of course, that’s the way it goes?
  • Jim Moore:
    So Rupert, I’d point you to the proxy. And we have the consents and obviously, the voting laid out there. We talked about the deal closing in the second quarter, we wouldn’t change that now, and we’ll define it more closely when we can. We’re on schedule, the convert vote is March 18 and the common and the preferred are April 7, and we haven’t hit any roadblocks yet on any of the approvals we need. So there’s no change to anything we filed on that front.
  • Rupert Merer:
    All right, great. I’ll leave it there. And thanks again for laying out the detail here. You always make it very easy for investors to understand and follow the company. Much appreciate it.
  • Jim Moore:
    Thanks, Rupert, for being on the call and for following us. And I see, this could be our last call. So if it is, thank you very much for following us.
  • Rupert Merer:
    Likewise. Yes. If it’s the last one, congratulations. Take care. Thank you.
  • Operator:
    There are no more questions in the queue. This concludes our question-and-answer session. I would like to turn the conference back over to Jim Moore for any closing remarks.
  • Jim Moore:
    Okay. So it’s been a long slog the last six years. Power prices and supply-demand fundamentals have been poor. And unfortunately, the outlook is still challenging with more and more wind and solar coming on the grid. That’s going to create price challenges for us and for other holders of more dependable generation. So we’re happy to have this opportunity for all our securities holders to de-risk at prices, premiums to what the trading ranges have been and to redeploy their capital elsewhere. That’s how we’re going to vote our own security interests. And we encourage everybody. Please do the math, look at lost opportunity costs and then vote. And hopefully, the transaction will close in the second quarter, and this will be our last call. So thank you all for your interest in being our securities holders. If the transaction doesn’t close, then we’ll talk to you next quarter at the same Bat time, same Bat channel. Thank you very much.
  • Operator:
    The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.

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