Atlantic Power has soild quarter and raises guidance

Atlantic Power is working on it's structure;it is restructuring.It's headquarters are in Massachusetts and it owns all or part of 28 facilities located in U.S.A and Canada.But it has partners directly(through equity ownwership) or indirectly through debt.In fact, the knock against ATP in the past is that it had too much debt.This forced it to cancel it's dividend in 2016.Since then it has been  restructuring.Atlantic adds that since 2013 it has paid down debt by $1 billion and furthermore it will repay $166 million in 2017.Still ATP has total assets of $2.1 billion.On the other hand it will lose one of it's partly owned facilities in San Diego and soon (perhaps in 2019) lose 3 Ontario facilities.It also is reducing it's expenses and repricing it's debt .

The Third Quarter

The third quarter was a solid quarter for Atlantic.Cash provided by operations was $53 million versus $38 million in 2016.The more important project adjusted EBITDA went from $51 million in 2016 to $77 million in Q3 2017.And for 9 months EBITDA went from $160 million in 2016 to $226 million.It repaid $86 million of debt including $29 million of a term loan.In addition, it repaid $55 million of project debt on their Piedmont plant.Consequently Moody's debt rating service improved it's debt rating from B1 to Ba3.It also got $37 million from an OEFC award and used it for payments on 3 Ontario plants that will be shut down  soon.And it's Tunis pant in Ontario will soon be restarted.The new structure is not yet beautiful but it is certainly shaping up.

Outlook for 2017      

Atlantic Power management has trouble keeping up with all their facility changes.At the start of the year guidance  for adjusted EBITDA was $250 -$265 million and it has been raised in Q3 to $260-$275 million for they year.But it is already $226 million after 9 months and Q4 should be another good one.So this blog thinks that adjusted EBITDA for 2017 should be closer to $290 -$305 million.This will produce e.p.s. of $2.75 to $2.90 and a price/earnings ratio of  about 1.This is an extremely low P/E ratio and recommended by this blog but investors don't want to chase the share price any higher until the restructuring is finished.     use Blogdaleupsome for analysis of Cdn. utilities