Algonquin Power & Utilities, a Canadian renewable energy and regulated utility conglomerate, has reported a widened loss in the second quarter and has announced its intention to sell its renewable energy group. The decision comes after a strategic review of the group, which began on May 11.
Streamlining for Greater Focus
Algonquin’s interim chief executive, Chris Huskilson, stated that the intended sale would unlock the company’s value as a pure-play regulated utility. By simplifying its structure and focusing on lower risk regulated investment opportunities, Algonquin aims to enhance operational efficiency and capital discipline.
Huskilson emphasized, “We believe the value of our assets is not fully realized in our current structure. We therefore determined that focusing on our regulated business going forward and pursuing a sale of the renewables business is the best path forward for Algonquin.”
The proceeds from the renewables transaction are expected to be used to reduce debt and fund share repurchases.
In the second quarter, Algonquin Power reported a wider loss of $253.2 million, or 37 cents a share, compared to a loss of $33.4 million, or five cents a share, in the same period last year. On an adjusted basis, net earnings fell 50% to eight cents a share. Analysts had anticipated a decline but forecasted it to be less drastic, at 11 cents.
However, despite the wider loss, revenue increased by 1% to $627.9 million, surpassing analyst expectations of $611.8 million.