Altius Renewable Royalties Reports Q3 2023 Financial Results

Altius Renewable Royalties Corp. (TSX: ARR) (OTCQX: ATRWF) (“ARR” or the “Corporation”), is pleased to report its financial results for the third quarter of 2023 with a conference call to follow November 7, 2023 at 9:00 am EDT.

The Corporation’s 50% owned Great Bay Renewables (“GBR”) joint venture recorded $3.9 million in royalty revenue for the quarter ended September 30, 2023 compared to $3.2 million in Q3 2022 . Operating cash flows at GBR were $1.7 million in the third quarter of 2023 as compared to $1.8 million in Q3 2022. For the nine months ended September 30, 2023 GBR recorded $7.8 million in royalty revenue compared to $5.6 million in the same period in 2022. Operating cash flows at GBR were $3.6 million for the nine months ended September 30, 2023 as compared to $2.3 million in the same period in 2022.

ARR reported a net loss of $0.7 million, proportionate revenue⁽¹⁾of $2.5 million and adjusted EBITDA⁽¹⁾ of $1.5 million for the quarter. This compares to net earnings of $0.3 million, proportionate revenue⁽¹⁾ of $1.8 million and adjusted EBITDA⁽¹⁾ of $1.0 million in Q3 2022. Total proportionate revenue⁽¹⁾ in Q3 2023 was comprised of $2.0 million in royalty revenue and $0.5 million in interest income.

For the nine months ended September 30, 2023, ARR reported a net loss of $0.9 million, proportionate revenue⁽¹⁾ of $5.6 million and adjusted EBITDA⁽¹⁾ of $2.8 million. This compares to a net loss of $0.4 million , proportionate revenue⁽¹⁾ of $3.2 million and adjusted EBITDA⁽¹⁾ of $0.8 million for the comparative period in 2022. Total proportionate revenue⁽¹⁾ for the nine month period was comprised of $3.9 million in royalty revenue and $1.7 million in interest income.

The Corporation’s current quarter and year to date results reflect the proportionate share of increased revenues at GBR offset by the proportionate share of increased costs including GBR’s non-cash based share of loss in equity investments Bluestar and Nova of approximately $4.2 million and $6.2 million respectively. Bluestar and Nova are currently engaged in early-stage renewable energy development resulting in increased levels of expenses with minimal offsetting revenues thus far at those entities. Nova continues to make good progress in building its greenfield development pipeline as the current portfolio of projects with site control has now grown to over 2 GW of wind, solar and battery storage projects.

GBR’s operating royalty portfolio continued to benefit from the additions of each of the Titan Solar, Young Wind, Appaloosa Run and Hansford County Wind projects, which were either acquired or reached operational status in the second half of 2022. GBR continues to progress several new royalty investment opportunities spanning the full spectrum of development to production stage assets while the El Sauz project is currently in construction and expected to reach commercial operation in late 2023. Several additional royalty projects continue to be advanced towards construction start by several operators across a variety of US power regions.

Increased merchant pricing in the current quarter due to warm weather and increased power demand led to higher royalty revenues for the period.

At September 30, 2023 the Corporation held cash of $37.8 million and has expected commitments for the remainder of 2023 of approximately $5.0 million for existing GBR investment agreements. In addition the Corporation recently announced that GBR closed senior secured credit financing agreements in the aggregate amount of $246.5 million which enables GBR to accelerate its growth trajectory while maintaining a competitive cost of capital.

Commenting on the quarter, Frank Getman, CEO of GBR, said “With the recent closing of our new debt facility, we have demonstrated the underlying strength of our current asset portfolio in the eyes of sophisticated global lenders and have positioned ourselves to continue to seize upon our strong pipeline of growth opportunities. In a few short years, we have scaled up a portfolio of renewable royalties on over 2.3 GW of operating projects and a pipeline of development stage royalties of over 15 GW, providing an embedded stream of future cash-flowing royalties that ensures strong revenue growth for GBR through the remainder of the decade."

Brian Dalton, CEO of ARR, added that “GBR continues to gain portfolio scale and diversity at a pace that is exceeding the long-term goals we had set at the time of our IPO in 2021. Our portfolio has been built to date using 100% equity based financing and this has provided us with the capacity to now apply prudent amounts of leverage to continue to grow and diversify the portfolio in a way that is non dilutive to our shareholders equity. The new credit facilities allow us to capture the current contrarian royalty financing opportunity available within the renewables sector, relating to the decrease in availability and attractiveness of other competing forms of capital such as equity and debt. We are poised to play an increased role in supporting the energy transition and to adding further diversity and scale to the portfolio on behalf of shareholders.”

Non-GAAP Financial Measures

1. Management uses the following non-GAAP financial measures: proportionate royalty and other revenue (“proportionate revenue”) and adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA). 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, November 7, 2023 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:

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 33 renewable energy royalties representing approximately 1.9 GW of renewable power on operating projects and an additional approximate 6 GW on projects in 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 15 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.

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