Algonquin Power misses a quarter
Algonquin Power released it's third quarter results and it was not a pretty sight.It's revenue was $152 million which was a 20% increase from the same quarter in 2013.Also on the positive side revenue for the nine month period was $684 million which was up 46% from the 9 months in 2013.But EBITDA was only $42 million versus $40 million in 2013.This I am referring to as a miss.For 9 months it was only $206 million compared to $160 million for 2013.Algonquin showed $100 million of EBITDA in Q1 and $66 million in Q2.With their new acquisitions EBITDA should have been at $65 to $75 million for this quarter.Yahoo Finance shows them at $240 million EBITDA as I believe their forecast for nine months.This is a good forecast.I also thought they would be at$240 to $250 million.However a review of their 2013 annual and 2014 quarterly reports shows that Algonquin did not give guidance for the year.
New facilities
AQN states that two new properties are in commercial operation,that is, the Cornwall solar facility and the St. Leon wind facility.AQN also says that the Bakersfield operation(in California) with 20 MW and the St. Damase,Quebec wind operation with 24 MW of power and the Morse wind operation with 23 MW of power will all come onstream in 2015.There is no guidance as to when the new Park Water operation will add profits to AQN.The addition of the facilities in 2104 and expected facilities in 2015 mean that EBITDA should have been higher this quarter than last quarter.In other words EBITDA should have been at $65 to $75 million. But AQN missed on this quarter.
Comparison with the Past
Algonquin has grown very fast as well as very solidly in the past two years.This blog does not have the EBITDA figures for 2012 nor 2013 but it does have an indicator called adjusted net earnings before income tax.This is a very close estimate to EBITDA(the best performance indicator for utilities) and it was $6.5 million for year-end 2012 and $60.6 million for year-end 2013. This is a tremenduous increase!And it is not likely to be less than $250 million this year and may get up to $275 million.This is not an overly optimistic forecast.This would produce earnings per share of $1.10 to $1.20 per share.And this would produce a price/earnings ratio of 7.9 to 8.6 .This is much lower than that for the bigger utilities like Capital Power and Emera .But Algonquin has good ,profitable new resources coming onstream in 2014 and 2015.But Algonquin needs to give us better annual guidance for 2015.
New facilities
AQN states that two new properties are in commercial operation,that is, the Cornwall solar facility and the St. Leon wind facility.AQN also says that the Bakersfield operation(in California) with 20 MW and the St. Damase,Quebec wind operation with 24 MW of power and the Morse wind operation with 23 MW of power will all come onstream in 2015.There is no guidance as to when the new Park Water operation will add profits to AQN.The addition of the facilities in 2104 and expected facilities in 2015 mean that EBITDA should have been higher this quarter than last quarter.In other words EBITDA should have been at $65 to $75 million. But AQN missed on this quarter.
Comparison with the Past
Algonquin has grown very fast as well as very solidly in the past two years.This blog does not have the EBITDA figures for 2012 nor 2013 but it does have an indicator called adjusted net earnings before income tax.This is a very close estimate to EBITDA(the best performance indicator for utilities) and it was $6.5 million for year-end 2012 and $60.6 million for year-end 2013. This is a tremenduous increase!And it is not likely to be less than $250 million this year and may get up to $275 million.This is not an overly optimistic forecast.This would produce earnings per share of $1.10 to $1.20 per share.And this would produce a price/earnings ratio of 7.9 to 8.6 .This is much lower than that for the bigger utilities like Capital Power and Emera .But Algonquin has good ,profitable new resources coming onstream in 2014 and 2015.But Algonquin needs to give us better annual guidance for 2015.
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