Altius Renewable Royalties Reports Q2 2024 Financial Results

Rhea-AI Summary

Altius Renewable Royalties Corp. (TSX: ARR) (OTCQX: ATRWF) reported its Q2 2024 financial results. Highlights include:

- GBR joint venture recorded $3.1 million in revenue, up from $2.0 million in Q2 2023
- Proportionate revenue of $2.4 million, compared to $1.6 million in Q2 2023
- Adjusted EBITDA of $1.3 million, up from $0.7 million in Q2 2023
- Net loss of $0.6 million, compared to $0.1 million in Q2 2023
- Apex's 195 MW Angelo Solar project achieved commercial operations
- GBR entered into a $30 million royalty investment with Nokomis Energy
- GBR provided a $40 million secured term loan facility to Nova

The company held $65.9 million in cash as of June 30, 2024, with $21.1 million in expected commitments for 2024.

Positive

• GBR joint venture revenue increased 55% YoY to $3.1 million
• Proportionate revenue grew 51.9% YoY to $2.4 million
• Adjusted EBITDA rose 89.1% YoY to $1.3 million
• Apex's 195 MW Angelo Solar project achieved commercial operations
• GBR entered into a $30 million royalty investment with Nokomis Energy
• GBR provided a $40 million secured term loan facility to Nova
• 700 MW of projects with GBR royalties under construction

Negative

• Net loss increased from $0.1 million in Q2 2023 to $0.6 million in Q2 2024
• Operating cash flows at GBR decreased slightly from $1.0 million to $0.9 million YoY
• Non-cash share of loss in equity investments Bluestar and Nova of approximately $0.4 million

All currency references in USD unless otherwise indicated

ST. JOHN’S, Newfoundland and Labrador--(BUSINESS WIRE)-- Altius Renewable Royalties Corp. (TSX: ARR) (OTCQX: ATRWF) (“ARR” or the “Corporation”), is pleased to report its financial results for the second quarter of 2024 with a conference call to follow August 6, 2024 at 9:00 am EDT.

The Corporation's 50% owned Great Bay Renewables ("GBR") joint venture recorded $3.1 million in revenue for the quarter ended June 30, 2024 compared to $2.0 million in Q2 2023. Operating cash flows at GBR were $0.9 million for the quarter ended June 30, 2024 compared to $1.0 million in Q2 2023 primarily due to increased revenue offset by debt service costs.

Selected financial information for the Corporation is included in the table below:

	Three Months ended
	June 30, 2024					June 30, 2023
Revenue per consolidated financial statements	$	891,000				$	613,000
Net loss		(559,000	)				(96,000	)
Total assets		217,156,000					203,269,000
Total liabilities		9,896,000					6,465,000
Non-GAAP financial measures(1)
Proportionate revenue (1)	$	2,427,000				$	1,598,000
Adjusted EBITDA (1)		1,265,000					669,000
Adjusted operating cash flow(1)		662,000					626,000

For the quarter ended June 30, 2024, ARR reported proportionate revenue⁽¹⁾ of $2.4 million, adjusted EBITDA⁽¹⁾ of $1.3 million, adjusted operating cash flow⁽¹⁾ of $0.7 million and a net loss of $0.6 million. This compares to proportionate revenue⁽¹⁾ of $1.6 million, adjusted EBITDA⁽¹⁾ of $0.7 million, adjusted operating cash flow⁽¹⁾ of $0.6 million and a net loss of $0.1 million for the same quarter in 2023.

Growth in proportionate revenue during the quarter relates to operating stage royalties at GBR, investment income on various loans and interconnect finance agreements as well as an increase in ARR's interest income from cash on hand.

The Corporation’s current quarter results reflect increased interest income, the proportionate share of increased revenues at GBR offset by the proportionate share of increased costs including the non-cash share of loss in equity investments Bluestar Energy Capital LLC ("Bluestar") and Nova Energy LLC ("Nova") of approximately $0.4 million. Bluestar and Nova continue to engage in early-stage renewable energy development resulting in minimal revenues to offset expenses thus far at those entities. Since commencing operations in early 2022, Nova has built an extensive pipeline of 25 wind, solar and battery storage projects totaling approximately 6.5 GW.

Apex's 195 MW Angelo Solar project achieved commercial operations on schedule in June 2024 and is expected to begin contributing to GBR's revenue in the fourth quarter of this year.

During the quarter ended June 30, 2024 GBR announced that it had entered into a $30 million royalty investment with Nokomis Energy, LLC. ("Nokomis") to gain future royalties related to a portfolio of distributed solar development projects. the funds will be invested in tranches as Nokomis achieves certain project advancement milestones. As individual pipeline projects are developed, GBR will receive a gross revenue royalty agreement on each project until a target minimum return is achieved. This represents GBR's first investment into the distributed solar market, which is less impacted by the interconnection challenges being experienced for many grid based projects.

Also in June, GBR entered into a $6.1 million interconnection (IC) support facility to assist Red Stone Renewables, LLC. (“Red Stone”) by funding the refundable portions of certain interconnection deposits for two solar development projects totaling approximately 250 MWac that Red Stone has selected for advancement in the PJM interconnection queue. As part of the support facility, GBR also acquired the option to purchase renewable royalties on the two projects at predetermined discount rates. Red Stone is a new counterparty to GBR, and has been developing a renewable energy and battery storage pipeline over 10+ years.

Subsequent to the quarter GBR entered into a follow-on transaction with Nova to provide a $40 million secured term loan facility. As part of the facility GBR will receive up to 500 MW of additional royalties on Nova’s pipeline of projects, depending on the amount drawn as projects are commercialized by Nova. This is in addition to the royalties on 1.5 GW of renewable energy projects GBR received as part of its initial investment into Nova and its parent company Bluestar Energy Capital in May 2022.

At June 30, 2024 the Corporation held cash of $65.9 million and has 2024 expected commitments related to existing GBR investment agreements of approximately $21.1 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, "The GBR team had a busy quarter with the closing of the Nokomis investment as well as the second interconnection loan agreement signed with Red Stone and the Nova bridge facility in July. The commencement of commercial operations of Apex's 195 MW Angelo Solar project adds to our operating stage portfolio. We currently have 700 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, "GBR continues to innovate and find opportunity in finding solutions to industry challenges while steadily scaling and diversifying its royalty portfolio. We look forward to realizing further growth ahead through progressive advancement of the large development stage portfolio that has been assembled as well as through the continuing establishment of new use cases for GBR's royalty financing structures."

Non-GAAP Financial Measures

1. 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 Tuesday, August 6, 2024 at 9:00 am EDT to provide an update and to offer an open Q&A session for analysts and investors. Access details are as follows:

DATE				Tuesday, August 6, 2024 at 9:00 am EDT
EVENT				Altius Renewable Royalties Q2 2024 Financial Results Conference Call and Webcast
DIAL IN				(+1) 646-307-1865 OR (+1) 800 717 1738
WEBCAST				ARR Q2 2024

About ARR

ARR is 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 2.6 GW of renewable power on operating projects and an additional approximate 5.6 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 18.7 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240805380974/en/

Flora Wood

Email: Flora@arr.energy

Tel: +1.877.576.2209

Direct: +1.416.346.9020

Ben Lewis

Email: Ben@arr.energy

Tel: +1.877.576.2209

Source: Altius Renewable Royalties Corp.

FAQ

What was Altius Renewable Royalties' (ATRWF) revenue for Q2 2024?

Altius Renewable Royalties reported proportionate revenue of $2.4 million for Q2 2024, compared to $1.6 million in Q2 2023.

How much did ATRWF's adjusted EBITDA increase in Q2 2024?

Altius Renewable Royalties' adjusted EBITDA increased from $0.7 million in Q2 2023 to $1.3 million in Q2 2024, representing an 89.1% year-over-year growth.

What major project achieved commercial operations for ATRWF in Q2 2024?

Apex's 195 MW Angelo Solar project achieved commercial operations on schedule in June 2024 and is expected to begin contributing to GBR's revenue in the fourth quarter of this year.

How much cash did ATRWF hold as of June 30, 2024?

As of June 30, 2024, Altius Renewable Royalties held cash of $65.9 million.

What new investments did ATRWF's GBR joint venture make in Q2 2024?

GBR entered into a $30 million royalty investment with Nokomis Energy and a $6.1 million interconnection support facility with Red Stone Renewables. Additionally, GBR provided a $40 million secured term loan facility to Nova in July 2024.