Algonquin Power & Utilities Corp. (NYSE:AQN) Q1 2024 Earnings Call Transcript

Christopher Huskilson: Well, I think it’s all of the above. I mean the whole electrification process that’s going on is really what’s driving growth. And we are beginning to see traction on the growth side. For the first time in a long time, we’ve actually put growth in our regulated kilowatt hour numbers. And the other thing that we’re seeing is we’re also seeing people moving to some of the territories where we are as they move out of concentrated areas like cities and so on. So there’s a number of factors that are going into growth. And as I say, we’re beginning to see growth for the first time in quite a long time.

Rupert Merer: So do you think you can keep pace with the growth rates in North America?

Christopher Huskilson: Well, we’re hopeful about that, right? At the end of the day, as I said, we’re just starting to see it materialize. And so we’re hopeful that it will materialize as it is everywhere. But electrification is going to be a long-term trend. And that long-term trend is going to drive growth in all of the businesses.

Rupert Merer: And some investors are really looking for exposure to data centers. Do you have any data center movement in your areas?

Christopher Huskilson: I would say at this stage, that’s not a major source of our growth. But we’re seeing just primarily from normalized electrification.

Rupert Merer: Okay. Very good. Thank you very much.

Christopher Huskilson: Okay. Thank you.

Operator: The next question comes from the line of Rob Hope from Scotia Bank. Please go ahead.

Robert Hope: Good morning, everyone. And congrats, Chris. I want to follow up on the commentary in the prepared remarks just about cost containment and really focusing on normalized or reducing costs at the operating utilities. As you look through kind of your plan there, do you have a timeline of when we could start to see some results there? And are there any goals you could share with us, whether that would be on a million dollar basis or ROE bps?

Christopher Huskilson: Yes. I mean, our concentration up to this point has really been twofold, making sure that we had the organization in the right position to be able to go after its cost and to restructure the cost structure of the business. And secondly, to get the platform in place that will allow us to do that better. So it’s a multiyear process. And as you can imagine, our focus has been on the renewable sale. It’s been on ensuring that we are ready for that sale and that we’re ready to separate the business and those kinds of things. But as we go into H2, you’re going to start to see us focus on cost structure and using the system that we’ve now installed to create more efficiency and effectiveness in our business. So it’s really just too early to quantify. But at the end of the day, just based on my experience and looking at it through those eyes, there’s lots of opportunity there for us.

Robert Hope: Thanks for that. And then just maybe moving over to the structure and the simplification. Is that now largely behind us and everything is ready for a sale? And I guess, maybe any great follow-up there would be, is that $6 million of corporate admin costs that were allocated to renewables. Is that a go-forward run rate?

Christopher Huskilson: Well, so yes, we’re ready for the sale. We’ve – specifically – I mean, the business is running as a business, and we’ve allocated employees to that business and created a perimeter around that business. And so yes, from that perspective, we’re absolutely ready for the sale. I don’t know, did you want to touch on the run rate?

Darren Myers: Yes. So maybe – and also just follow-on that simplification is really at the company level, and it doesn’t impact the sales process. We are trying to take steps to continue to simplify and make our results easier to understand, and we will continue to do that. I don’t think there’s anything nothing like the development JV that we’re looking at right now. And then in terms of the cost, yes, that’s a reasonable run rate. This is what we’ve had as admin charges before. So we’ve also opened the disclosure trying to make sure you understand it’s not a new cost for the business. It is the allocation of the corporate cost to it.

Robert Hope: Thank you.

Operator: The next question comes from the line of Ben Pham from BMO Capital.

Benjamin Pham: Hi. Good morning. Maybe first question is for Chris. I’m wondering now with your appointment, was there anything on your[indiscernible] cabinet that now that you are permanent CEO that you can advance a bit quicker? And obviously, the renewable stuff is front and center. But was there – is there anything there that you can push or focus on over the near term?

Christopher Huskilson: Ben, I’m not really sure I understood the question.

Darren Myers: Ben, I’d say from working with Chris, I don’t think you’ve been holding back. I don’t think the title change is going to make a difference, but…

Christopher Huskilson: Well, so I mean what – I understand that, what I said all along, Ben, was that I was not going to be a caretaker, and that we were going to act with pace. And so that doesn’t change. At the end of the day, I think a little more certainty for the company as a whole, as in knowing who the leader is going to be is something that I think helps everybody because the less uncertainty is better than more uncertainty, that’s for sure. And the fact that we are going to move into developing a complete succession plan for the entire company. So not just CEO succession, but succession across the company as we begin – when you think about it, the way that the company has run up to this point is that we’ve essentially done the business of the company centrally and the utilities have operated.