CWEN - Clearway Energy Inc. Reports First Quarter 2024 Financial Results | Benzinga

• Signed agreements with Clearway Group to commit to invest in 55 MW of wind and 257 MW of solar plus storage projects
  
• Entered into new Resource Adequacy Contracts for Marsh Landing and Walnut Creek
• Reaffirming 2024 financial guidance
• Increasing the quarterly dividend by 1.7% to $0.4102 per share in the second quarter of 2024, or $1.64 per share annualized
• Continue to target annual dividend per share growth in the upper range of 5% to 8% through 2026
  

PRINCETON, N.J., May 09, 2024 (GLOBE NEWSWIRE) -- Clearway Energy, Inc. (NYSE:CWEN, CWEN.A)) today reported first quarter 2024 financial results, including Net Loss of $(46) million, Adjusted EBITDA of $211 million, Cash from Operating Activities of $81 million, and Cash Available for Distribution (CAFD) of $52 million.

"Clearway remains well positioned to achieve its 2024 financial objectives. We reported solid first quarter results highlighting the benefits of our fleet's geographic and technological diversification," said Craig Cornelius, Clearway Energy, Inc.'s incoming President and Chief Executive Officer. "Furthermore, we have made additional progress on the execution toward our long-term objectives with the commitments to invest in Dan's Mountain and Rosamond South and new resource adequacy contracts for our Conventional fleet. CWEN continues to expect to achieve the upper range of its 5% to 8% annual dividend growth objective without needing external capital through at least 2026. In 2027 we continue to see the potential for CAFD per share growth to be in that same range if the balance of our gas fleet contracts its capacity to deliver resource adequacy at the same or better pricing as recently disclosed contract awards."

Adjusted EBITDA and Cash Available for Distribution used in this press release are non-GAAP measures and are explained in greater detail under "Non-GAAP Financial Information" below.

Overview of Financial and Operating Results

Segment Results

Table 1: Net Income/(Loss)

Table 2: Adjusted EBITDA

Table 3: Cash from Operating Activities and Cash Available for Distribution (CAFD)

For the first quarter of 2024, the Company reported Net Loss of $(46) million, Adjusted EBITDA of $211 million, Cash from Operating Activities of $81 million, and CAFD of $52 million. Net Loss increased versus 2023 primarily due to higher depreciation expense from growth projects achieving commercial operations. Adjusted EBITDA results in the first quarter of 2024 were lower than 2023 primarily due to the expiration of certain tolling agreements in the Conventional fleet, partially offset by the contribution from growth investments. Cash from Operating Activities increased versus 2023 primarily due to higher distributions from unconsolidated affiliates and lower interest payments related to the Conventional fleet. CAFD results in the first quarter of 2024 were higher than 2023 primarily due to lower debt service in the Conventional fleet coinciding with the expiration of the tolling agreements as well as higher wind generation for certain facilities during the first quarter.

Operational Performance

Table 4: Selected Operating Results¹

In the first quarter of 2024, availability at the Conventional segment was higher than the first quarter of 2023 primarily due to the timing and duration of maintenance outages in the segment in 2023. Generation in the Renewables segment during the first quarter of 2024 was 10% higher than the first quarter of 2023 primarily due to the contribution of growth investments.

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¹ Excludes equity method investments
² Generation sold excludes MWh that are reimbursable for economic curtailment

Liquidity and Capital Resources

Table 5: Liquidity

Total liquidity as of March 31, 2024, was $1,435 million, which was $70 million lower than as of December 31, 2023, primarily due to the repayment of debt and execution of growth investments.

As of March 31, 2024, the Company's liquidity included $485 million of restricted cash. Restricted cash consists primarily of funds to satisfy the requirements of certain debt arrangements and funds held within the Company's projects that are restricted in their use. As of March 31, 2024, these restricted funds were comprised of $173 million designated to fund operating expenses, approximately $187 million designated for current debt service payments, and $87 million of reserves for debt service, performance obligations and other items including capital expenditures. The remaining $38 million is held in distribution reserve accounts.

Potential future sources of liquidity include excess operating cash flow, availability under the revolving credit facility, asset dispositions, and, subject to market conditions, new corporate debt and equity financings.

Growth Investments

Cedar Creek Wind

On April 16, 2024, the Company, through an indirect subsidiary, acquired the Cedar Creek wind project, a 160 MW project located in Bingham County, Idaho, for $117 million in cash. The project achieved commercial operations in the second quarter of 2024 and sells its power under a 25-year PPA with an investment grade utility. The Company expects the project to contribute asset CAFD on a five-year average annual basis of approximately $13 million beginning January 1, 2025.

Dan's Mountain Wind

On May 3, 2024, the Company, through an indirect subsidiary, committed to acquire 50% cash equity interest in the Dan's Mountain wind project, a 55 MW project located in Allegany County, Maryland, for $44 million in cash, subject to closing adjustments. The project is expected to achieve commercial operations in the first half of 2025 and sell its power primarily under a 12-year PPA with an investment grade offtaker. The Company expects the project to contribute asset CAFD on a five-year average annual basis of approximately $4 million beginning January 1, 2026.

Rosamond South I

On May 7, 2024, the Company, through an indirect subsidiary, committed to acquire 50% cash equity interest in the Rosamond South I solar plus storage project, a 257 MW project located in Rosamond, California, for approximately $21 million in cash, subject to closing adjustments. The project is expected to achieve commercial operations in the first half of 2025 and sell its power, RECs, and capacity under agreements with creditworthy counterparties with a weighted average contract duration of approximately 15 years. The Company expects the project to contribute asset CAFD on a five-year average annual basis of approximately $2 million beginning January 1, 2026.

Strategic Announcements

Resource Adequacy Agreement at Walnut Creek

On May 6, 2024, the Company contracted with a load serving entity to sell approximately 97 MW of Resource Adequacy commencing January 2027 and ending December 2027. With this transaction, approximately 20% of Walnut Creek's net qualifying capacity is contracted through 2027 at terms providing for higher project level CAFD in 2027 relative to current run-rate expectations.

Resource Adequacy Agreement at Marsh Landing

On March 28, 2024, the Company contracted with a load serving entity to sell approximately 90 MW of Resource Adequacy commencing September 2026 and ending December 2030. With this transaction, approximately 74% of Marsh Landing's net qualifying capacity is contracted through 2027 at terms providing for higher project level CAFD in 2027 relative to current run-rate expectations.

Quarterly Dividend

On May 9, 2024, Clearway Energy, Inc.'s Board of Directors declared a quarterly dividend on Class A and Class C common stock of $0.4102 per share payable on June 17, 2024, to stockholders of record as of June 3, 2024.

Seasonality

Clearway Energy, Inc.'s quarterly operating results are impacted by seasonal factors, as well as weather variability which can impact renewable energy resource throughout the year. Most of the Company's revenues are generated from the months of May through September, as contracted pricing and renewable resources are at their highest levels in the Company's portfolio. Factors driving the fluctuation in Net Income, Adjusted EBITDA, Cash from Operating Activities, and CAFD include the following:

• Higher summer capacity and energy prices from conventional assets;
• Higher solar insolation during the summer months;
• Higher wind resources during the spring and summer months;
• Renewable energy resource throughout the year
• Debt service payments which are made either quarterly or semi-annually;
• Timing of maintenance capital expenditures and the impact of both unforced and forced outages; and
• Timing of distributions from unconsolidated affiliates
  

The Company takes into consideration the timing of these factors to ensure sufficient funds are available for distributions and operating activities on a quarterly basis.

Financial Guidance

The Company is reaffirming its 2024 full year CAFD guidance of $395 million. The Company's 2024 financial guidance factors in the contribution of committed growth investments based on current expected closing timelines and estimates for merchant energy gross margin at the conventional fleet. 2024 CAFD guidance does not factor in the timing of when CAFD is realized from new growth investments pursuant to 5-year averages beyond 2024. Financial guidance is based on median renewable energy production estimates for the full year.

Earnings Conference Call

On May 9, 2024, Clearway Energy, Inc. will host a conference call at 8:00 a.m. Eastern to discuss these results. Investors, the news media and others may access the live webcast of the conference call and accompanying presentation materials by logging on to Clearway Energy, Inc.'s website at http://www.clearwayenergy.com and clicking on "Presentations & Webcasts" under "Investor Relations."

About Clearway Energy, Inc.

Clearway Energy, Inc. is one of the largest renewable energy owners in the US with approximately 6,200 net MW of installed wind, solar, and battery energy storage systems. The Company's approximately 8,700 net MW of assets also include approximately 2,500 net MW of environmentally-sound, highly efficient natural gas generation facilities. Through this environmentally-sound diversified and primarily contracted portfolio, Clearway Energy endeavors to provide its investors with stable and growing dividend income. Clearway Energy, Inc.'s Class C and Class A common stock are traded on the New York Stock Exchange under the symbols CWEN and CWEN.A, respectively. Clearway Energy, Inc. is sponsored by its controlling investor, Clearway Energy Group LLC. For more information, visit investor.clearwayenergy.com.

Safe Harbor Disclosure

This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements are subject to certain risks, uncertainties and assumptions, and typically can be identified by the use of words such as "expect," "estimate," "target," "anticipate," "forecast," "plan," "outlook," "believe" and similar terms. Such forward-looking statements include, but are not limited to, statements regarding, the Company's dividend expectations and its operations, its facilities and its financial results, statements regarding the anticipated consummation of the transactions described above, the anticipated benefits, opportunities, and results with respect to the transactions, including the Company's future relationship and arrangements with Global Infrastructure Partners, TotalEnergies, and Clearway Energy Group, as well as the Company's Net Income, Adjusted EBITDA, Cash from Operating Activities, Cash Available for Distribution, the Company's future revenues, income, indebtedness, capital structure, strategy, plans, expectations, objectives, projected financial performance and/or business results and other future events, and views of economic and market conditions.

Although Clearway Energy, Inc. believes that the expectations are reasonable, it can give no assurance that these expectations will prove to be correct, and actual results may vary materially. Factors that could cause actual results to differ materially from those contemplated above include, among others, the Company's ability to maintain and grow its quarterly dividend, impacts related to COVID-19 (including any variant of the virus) or any other pandemic, risks relating to the Company's relationships with its sponsors, the failure to identify, execute or successfully implement acquisitions or dispositions (including receipt of third party consents and regulatory approvals), the Company's ability to acquire assets from its sponsors, the Company's ability to borrow additional funds and access capital markets due to its indebtedness, corporate structure, market conditions or otherwise, hazards customary in the power industry, weather conditions, including wind and solar performance, the Company's ability to operate its businesses efficiently, manage maintenance capital expenditures and costs effectively, and generate earnings and cash flows from its asset-based businesses in relation to its debt and other obligations, the willingness and ability of counterparties to the Company's offtake agreements to fulfill their obligations under such agreements, the Company's ability to enter into new contracts as existing contracts expire, changes in government regulations, operating and financial restrictions placed on the Company that are contained in the project-level debt facilities and other agreements of the Company and its subsidiaries, and cyber terrorism and inadequate cybersecurity. Furthermore, any dividends are subject to available capital, market conditions, and compliance with associated laws and regulations.

Clearway Energy, Inc. undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The Cash Available for Distribution are estimates as of today's date, May 9, 2024, and are based on assumptions believed to be reasonable as of this date. Clearway Energy, Inc. expressly disclaims any current intention to update such guidance. The foregoing review of factors that could cause Clearway Energy, Inc.'s actual results to differ materially from those contemplated in the forward-looking statements included in this news release should be considered in connection with information regarding risks and uncertainties that may affect Clearway Energy, Inc.'s future results included in Clearway Energy, Inc.'s filings with the Securities and Exchange Commission at www.sec.gov. In addition, Clearway Energy, Inc. makes available free of charge at www.clearwayenergy.com, copies of materials it files with, or furnishes to, the Securities and Exchange Commission.

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