Algonquin Shares Plunge: Posts Mixed Q2, Sells Renewables Energy Business & Cuts Dividend

Algonquin Power & Utilities Corp. AQN shares are trading lower today after it reported second-quarter FY24 results and disclosed the sale of its renewable energy business. 

Q2 Earnings: The company reported revenue of $598.60 million (-5% Y/Y), missing the consensus of $625.00 million. Adjusted EPS of $0.09 exceeded the street view of $0.08.

Adjusted Funds from Operations rose 12% Y/Y to $167.9 million in the quarter.

Dividend Cut: The company has declared a third-quarter 2024 dividend of $0.065 per share, a 40% reduction from the second quarter of 2024, reflecting an annualized dividend of $0.26 per share.

Asset Sale: Algonquin Power disclosed a definitive agreement to sell its renewable energy business (excluding hydro) to an LS Power subsidiary for up to $2.5 billion, including $2.28 billion in cash at closing and up to $220 million in earn-outs related to specific wind assets.

The sale, pending regulatory and competition approvals, is expected to close in the fourth quarter of 2024 or the first quarter of 2025.

Algonquin Power anticipates net cash proceeds of $1.6 billion after repaying financing and adjusting for taxes and fees.

Chris Huskilson, CEO said, “This major milestone, coupled with our previously announced agreement to support the sale of our Atlantica shares, delivers on our plan to transform AQN into a pure play regulated utility, optimize our regulated business activities, strengthen our balance sheet, and enhance our quality of earnings. With these key objectives in mind, we have also reduced our expected capital expenditures and dividend to enable even greater financial flexibility.”

Price Action: AQN shares are down 10.4% at $5.545 at the last check Friday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Photo via Midjourney

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