6-K 1 form6k.htm ATLANTICA YIELD PLC 6-K 8-5-2016 (EARNINGS RELEASE)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 

FORM 6-K
 

 REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of August, 2016

Commission File Number 001-36487
 

Atlantica Yield plc
(Exact name of Registrant as Specified in its Charter)

Not Applicable
(Translation of Registrant’s name into English)
 

Great West House, GW1, 17th floor
Great West Road
Brentford, TW8 9DF
United Kingdom
Tel.: +44 20 7098 4384
 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

    ☒  Form 20-F            ☐  Form 40-F

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ☐
 
 
Atlantica Yield Reports Second Quarter 2016 Financial Results

· Revenue for the first six months of 2016 reached $467.7 million, a 52% increase compared to the same period of the previous year

· Further Adjusted EBITDA including unconsolidated affiliates increased by 37% to $362.5 million for the first six months of 2016 compared to the same period in the previous year

· Operating Cash Flow increased by 49% to $117.8 million for the first six months of 2016

· In the second quarter, Cash Available For Distribution  (“CAFD”) amounted to $39.6 million, on track to meet guidance for the year

· Progress made in gaining autonomy from our sponsor and managing sponsor related risks

· Dividend reinstated with a dividend of $0.29 per share declared

· Acquisition of a 1 MW solar PV plant in Spain, for a total consideration of $3.2 million and an expected CAFD acquisition yield and acquisition IRR of 12%

First Half 2016 Results

August 5th, 2016 – Atlantica Yield (“ABY”), the sustainable total return company that owns a diversified portfolio of contracted assets in the energy and environment sectors, reported another period of excellent operating results. Revenues for the first six months of 2016 amounted to $467.7 million, representing a 52% increase from the comparable period of 2015 and Further Adjusted EBITDA, including unconsolidated affiliates, amounted to $362.5 million, a 37% increase compared with the same period of the previous year.
 
2
 
Operating Cash Flow increased by 49% compared to the same period of the previous year and reached $117.8 million. CAFD for the second quarter of 2016 amounted to $39.6 million, more than double the CAFD for the first quarter. With this, CAFD for the first half of the year, including the impact of a partial refinancing of ATN2, reached $58.3 million. According to our estimates, CAFD in the first half of the year should represent between 20% and 40% of the total for an average year, therefore we believe that we are on track to meet guidance for the year.

Highlights
 
   
Six-month period ended June 30,
  
(in thousands of U.S. dollars)
  
2016
    
2015
  
Revenue
    
467,678
      
308,569
  
Further Adjusted EBITDA incl. unconsolidated affiliates1
    
362,524
      
264,786
  
CAFD2
    
58,343
      
83,095
  
 
1
Further Adjusted EBITDA includes our share in EBITDA of unconsolidated affiliates and the dividend from our preferred equity investment in Brazil for the six-month period ended June 30, 2015 (see reconciliation on page 12).
2
CAFD includes a one-time impact of a partial refinancing of ATN2 that took place in the first quarter of 2016.
 
3
 
Key Performance Indicators
 
   
Six-month period ended June 30,
  
   
2016
    
2015
  
Renewable energy
            
MW in operation3
    
1,441
      
1,241
  
GWh produced
    
1,488
      
1,083
  
Conventional power
                
MW in operation3
    
300
      
300
  
GWh produced4
    
1,150
      
1,223
  
Electrical availability4,5 (%)
    
95.0
%
    
101.8
%
Electric transmission lines
                
Miles in operation
    
1,099
      
1,099
  
Availability5(%)
    
99.9
%
    
99.9
%
Water
                
Capacity (Mft/day)3
    
10.5
      
10.5
  
Availability5 (%)
    
102.1
%
    
100.7
%

Segment Results

(in thousands of U.S. dollars)
  
Six-month period ended June 30,
  
   
2016
    
2015
  
Revenue by Geography
            
North America
  
$
165,848
    
$
150,157
  
South America
    
57,981
      
50,632
  
EMEA
    
243,849
      
107,780
  
Total revenue
  
$
467,678
    
$
308,569
  
                 
Further Adjusted EBITDA incl. unconsolidated affiliates by Geography
                
North America
  
$
141,171
    
$
137,297
  
South America
    
48,057
      
51,623
  
EMEA
    
173,296
      
75,866
  
Total Further Adjusted EBITDA incl. unconsolidated affiliates
  
$
362,524
    
$
264,786
  

3
Represents total installed capacity in assets owned at the end of the period, regardless of our percentage of ownership in each of the assets.
4
Conventional production and availability were impacted by a periodic scheduled major maintenance in February 2016.
5
Availability refers to actual availability divided by contracted availability.
 
4
 
(in thousands of U.S. dollars)
  
Six-month period ended June 30,
  
   
2016
    
2015
  
Revenue by business sector
            
Renewable energy
  
$
342,413
    
$
193,427
  
Conventional power
    
65,468
      
65,339
  
Electric transmission lines
    
46,912
      
39,238
  
Water
    
12,885
      
10,565
  
Total revenue
  
$
467,678
    
$
308,569
  
                 
Further Adjusted EBITDA incl. unconsolidated affiliates by business sector
                
Renewable energy
  
$
257,422
    
$
159,164
  
Conventional power
    
53,734
      
53,319
  
Electric transmission lines
    
39,359
      
41,855
  
Water
    
12,009
      
10,448
  
Total Further Adjusted EBITDA incl. unconsolidated affiliates
  
$
362,524
    
$
264,786
  

During the second quarter of 2016 our portfolio performed steadily in line with expectations. In Solana, we continued to implement the scheduled improvements needed at the plant. Mojave exceeded expectations in the second quarter. Kaxu, our youngest asset, also outperformed our forecast for the quarter.  In Spain, our portfolio of solar assets continued to show solid operational performance; although revenues were slightly affected by lower radiation and lower than expected electricity prices in the wholesale market. In Spain, approximately 15% of our revenues have exposure to the price of electricity. Finally, our wind assets in Uruguay showed stable operating results, although wind continued to be lower than expected this year.
 
Our Conventional power generating facility in Mexico continues to show excellent performance and exceeded its contractual targets again. Finally, in our Transmission Line and Water segments, our assets comfortably achieved forecasted availability levels.
 
5
 
Liquidity and Debt

As of June 30, 2016, consolidated cash and cash equivalents amounted to $554.6 million, of which $84.9 million was cash available at the Atlantica Yield corporate level. In addition, short-term financial investments at the project level amounted to $80.0 million. As a result, total liquidity including short-term financial investments amounted to $634.6 million as of June 30, 2016.

As of June 30, 2016, net project debt and net corporate debt amounted to $5,042.4 million and $581.4 million, respectively. Net corporate debt / CAFD pre-corporate debt service ratio6 is at 2.7x, below our communicated internal target of 3x.

Continued progress on Key Initiatives

During the quarter, we progressed in back-office separation from our sponsor. We completed the transfer of support function employees and we terminated the support services agreement which was in place. In addition, the split in IT systems continues to progress at good pace and is expected to be completed by the end of the year.

With respect to risks arising from our sponsor’s situation, we have obtained waivers or forbearances for Cadonal in relation to cross-default provisions and 3 additional assets in relation to the minimum ownership provisions. We continue negotiations with the lenders of our project financing agreements to obtain further waivers and forbearances.

Dividend reinstated

On August 3 our Board of Directors approved a dividend of $0.29 per share expected to be paid on or about September 15, 2016 to shareholders of record as of August 31, 2016. The amount declared is the sum of $0.145 per share corresponding to the first quarter of 2016 and $0.145 per share corresponding to the second quarter of 2016. Considering the current status of waivers and forbearances on cross-default and minimum ownership provisions, the Board continues to be prudent and has decided to use the lower range of guidance and to approve a dividend for the proportional part of assets that do not require any waiver or forbearances. We expect to review upcoming quarterly dividends as we secure additional waivers and forbearances.

6
Based on mid-point of guidance range for CAFD for 2016.
 
6
 
Acquisition of a 1 MW solar PV plant in Spain

On August 2, we closed the acquisition of a 1MW solar PV plant in Spain for a total consideration of $3.2 million. We expect the acquisition to have an equity and project IRR of 12% and an average acquisition CAFD yield of 12% as well, considering the average yearly CAFD that we expect the asset to generate. The acquisition was closed under our ROFO agreement with Abengoa S.A. The asset is adjacent to two of our existing facilities.

Details of the Results Presentation Conference

Atlantica Yield’s CEO, Santiago Seage, and its CFO, Francisco Martinez-Davis, will hold a conference call today, August 5th, at 8:30 am EST.

In order to access the conference call participants should dial:  +1 855 402 7764 (US) / +44 (0) 207 107 0685 (UK).  A live webcast of the conference call will be available on Atlantica Yield's website. Please visit the website at least 15 minutes earlier in order to register for the live webcast and download any necessary audio software.

Forward-Looking Statements

This news release contains forward-looking statements. These forward-looking statements include, but are not limited to, all statements other than statements of historical facts contained in this prospectus, including, without limitation, those regarding our future financial position and results of operations, our strategy, plans, objectives, goals and targets, future developments in the markets in which we operate or are seeking to operate or anticipated regulatory changes in the markets in which we operate or intend to operate. In some cases, you can identify forward-looking statements by terminology such as “aim,” “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “guidance,” “intend,” “is likely to,” “may,” “plan,” “potential,” “predict,” “projected,” “should” or “will” or the negative of such terms or other similar expressions or terminology. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Our actual results of operations, financial condition and the development of events may differ materially from (and be more negative than) those made in, or suggested by, the forward-looking statements.
 
7
 
Factors that could cause actual results to differ materially from those contemplated above include, among others, general economic conditions, changes in government expenditure budgets, challenges in making acquisitions, changes in public support of renewable energy, weather conditions, legal challenges to regulations, changes to subsidies and incentives that support renewable energy sources, government regulations, the volatility of energy and fuel prices, counterparty credit risk, failure of customers to perform under contracts, our ability to enter into new contracts as existing contracts expire, reliance on third-party contractors and suppliers, failure of newly constructed assets to perform as expected, failure to receive dividends from assets, changes in our tax position, unanticipated outages at our generation facilities, the condition of capital markets generally and for yieldcos in particular our ability to access capital markets, adverse results in current and future litigation, developments at Abengoa, S.A. and our ability to maintain and grow our quarterly dividends. Furthermore, any dividends are subject to available capital, market conditions, and compliance with associated laws and regulations. These factors should be considered in connection with information regarding risks and uncertainties that may affect Atlantica Yield’s future results included in Atlantica Yield’s filings with the U.S. Securities and Exchange Commission at www.sec.gov.
 
Atlantica Yield undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or developments or otherwise.

Non-GAAP Financial Measures We present non-GAAP financial measures because we believe that they and other similar measures are widely used by certain investors, securities analysts and other interested parties as supplemental measures of performance and liquidity. The non-GAAP financial measures may not be comparable to other similarly titled measures of other companies and have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our operating results as reported under IFRS as issued by the IASB. Non-GAAP financial measures and ratios are not measurements of our performance or liquidity under IFRS as issued by the IASB and should not be considered as alternatives to operating profit or profit for the year or any other performance measures derived in accordance with IFRS as issued by the IASB or any other generally accepted accounting principles or as alternatives to cash flow from operating, investing or financing activities.
 
8
 
Consolidated Statements of Operations
 
(Amounts in thousands of U.S. dollars)

   
For the three-month period ended June 30,
    
For the six-month period ended June 30,
  
   
2016
    
2015
    
2016
    
2015
  
Revenue
  
$
261,302
    
$
190,265
    
$
467,678
    
$
308,569
  
Other operating income
    
15,615
      
18,304
      
30,440
      
36,376
  
Raw materials and consumables used
    
(10,226
)
    
(5,796
)
    
(17,601
)
    
(10,345
)
Employee benefit expenses
    
(3,595
)
    
(1,223
)
    
(5,849
)
    
(1,794
)
Depreciation, amortization, and impairment charges
    
(78,343
)
    
(58,095
)
    
(155,503
)
    
(110,350
)
Other operating expenses
    
(57,645
)
    
(48,170
)
    
(116,669
)
    
(84,318
)
Operating profit/(loss)
  
$
127,109
    
$
95,283
    
$
202,496
    
$
138,137
  
Financial income
    
797
      
2,878
      
864
      
3,517
  
Financial expense
    
(103,681
)
    
(73,093
)
    
(202,530
)
    
(136,285
)
Net exchange differences
    
(704
)
    
(319
)
    
(3,273
)
    
(1,473
)
Other financial income/(expense), net
    
(993
)
    
1,337
      
(3,183
)
    
4,331
  
Financial expense, net
  
$
(104,581
)
  
$
(69,197
)
  
$
(208,122
)
  
$
(129,910
)
Share of profit/(loss) of associates carried under the equity method
    
1,429
      
2,058
      
3,343
      
3,342
  
Profit/(loss) before income tax
  
$
23,956
    
$
28,143
    
$
(2,283
)
  
$
11,569
  
Income tax
    
(19,762
)
    
(10,304
)
    
(16,163
)
    
(6,428
)
Profit/(loss) for the period
  
$
4,194
    
$
17,839
    
$
(18,446
)
  
$
5,141
  
Loss/(profit) attributable to non-controlling interests
    
(1,544
)
    
(3,958
)
    
(4,911
)
    
(5,814
)
Profit/(loss) for the period attributable to the Company
  
$
2,649
    
$
12,881
    
$
(23,357
)
  
$
(673
)
Weighted average number of ordinary shares outstanding (thousands)
    
100,217
      
90,442
      
100,217
      
85,279
  
Basic earnings per share attributable to Abengoa Yield plc (U.S. dollar per share)
  
$
0.03
    
$
0.14
    
$
(0.23
)
  
$
(0.01
)
 
9
 
Consolidated Statement of Financial Position
 
(Amounts in thousands of U.S. dollars)

Assets
  
As of June 30, 2016
    
As of Dec. 31, 2015
  
Non-current assets
            
Contracted concessional assets
  
$
9,249,765
    
$
9,300,897
  
Investments carried under the equity method
    
52,255
      
56,181
  
Financial investments
    
90,103
      
93,791
  
Deferred tax assets
    
206,294
      
191,314
  
Total non-current assets
  
$
9,598,417
    
$
9,642,183
  
Current assets
                
Inventories
    
14,690
      
14,913
  
Clients and other receivables
    
253,533
      
197,308
  
Financial investments
    
222,191
      
221,358
  
Cash and cash equivalents
    
554,561
      
514,712
  
Total current assets
  
$
1,044,975
    
$
948,291
  
Total assets
  
$
10,643,392
    
$
10,590,474
  

Equity and liabilities
            
Share capital
  
$
10,022
    
$
10,022
  
Parent company reserves
    
2,313,855
      
2,313,855
  
Other reserves
    
(11,492
)
    
24,831
  
Accumulated currency translation differences
    
(82,409
)
    
(109,582
)
Retained Earnings
    
(383,912
)
    
(356,524
)
Non-controlling interest
    
122,884
      
140,899
  
Total equity
  
$
1,968,948
    
$
2,023,501
  
Non-current liabilities
                
Long-term corporate debt
    
662,990
      
661,341
  
Long-term project debt
    
3,582,172
      
3,574,464
  
Grants and other liabilities
    
1,629,720
      
1,646,748
  
Related parties
    
115,421
      
126,860
  
Derivative liabilities
    
444,321
      
385,095
  
Deferred tax liabilities
    
96,669
      
79,654
  
Total non-current liabilities
  
$
6,531,293
    
$
6,474,162
  
Current liabilities
                
Short-term corporate debt
    
3,268
      
3,153
  
Short-term project debt
    
1,929,906
      
1,896,205
  
Trade payables and other current liabilities
    
190,237
      
178,217
  
Income and other tax payables
    
19,740
      
15,236
  
Total current liabilities
  
$
2,143,151
    
$
2,092,811
  
Total equity and liabilities
  
$
10,643,392
    
$
10,590,474
  
 
10
 
Consolidated Cash Flow Statements
 
(Amounts in thousands of U.S. dollars)
 
   
For the three-month period ended June 30,
    
For the six-month period ended June 30,
  
   
2016
    
2015
    
2016
    
2015
  
Profit/(loss) for the period
    
4,194
      
17,839
      
(18,446
)
    
5,141
  
Financial expense and non-monetary adjustments
    
187,991
      
116,079
      
342,253
      
206,103
  
Profit for the period adjusted by financial expense and non-monetary adjustments
  
$
192,185
    
$
133,918
    
$
323,807
    
$
211,244
  
                                 
Variations in working capital
    
(21,450
)
    
21,037
      
(40,960
)
    
379
  
Net interest and income tax paid
    
(137,372
)
    
(113,023
)
    
(164,985
)
    
(132,314
)
Net cash provided by/(used in) operating activities
  
$
33,363
    
$
41,932
    
$
117,862
    
$
79,309
  
                                 
Investment in contracted concessional assets
    
(813
)
    
(83,976
)
    
(5,851
)
    
(93,170
)
Other non-current assets/liabilities
    
13,057
      
3,143
      
(2,557
)
    
3,143
  
Investments in entities under the equity method
    
4,984
      
-
      
4,984
      
-
  
Acquisitions of subsidiaries
    
-
      
(399,817
)
    
(19,071
)
    
(481,845
)
Net cash used in investing activities
  
$
17,228
    
$
(480,650
)
  
$
(22,495
)
  
$
(571,872
)
                                 
Net cash provided by/(used in) financing activities
  
$
(63,110
)
  
$
693,561
    
$
(62,471
)
  
$
674,960
  
                                 
Net increase/(decrease) in cash and cash equivalents
  
$
(12,519
)
  
$
254,843
    
$
32,896
    
$
182,397
  
Cash and cash equivalents at beginning of the period
    
574,788
      
267,442
      
514,712
      
354,154
  
Translation differences in cash or cash equivalent
    
(7,708
)
    
5,879
      
6,953
      
(8,387
)
Cash and cash equivalents at end of the period
  
$
554,561
    
$
528,164
    
$
554,561
    
$
528,164
  
 
11
 
Reconciliation of Further Adjusted EBITDA including unconsolidated affiliates to Profit/(loss) for the period attributable to the Company

(in thousands of U.S. dollars)
  
For the three-month period ended June 30,
    
For the six-month period ended June 30,
  
   
2016
    
2015
    
2016
    
2015
  
Profit/(loss) for the period attributable to the Company
  
$
2,649
    
$
13,881
    
$
(23,357
)
  
$
(673
)
Profit attributable to non-controlling interest
    
1,545
      
3,958
      
4,911
      
5,814
  
Income tax
    
19,762
      
10,304
      
16,163
      
6,428
  
Share of loss/(profit) of associates carried under the equity method
    
(1,428
)
    
(2,058
)
    
(3,343
)
    
(3,342
)
Financial expense, net
    
104,581
      
69,197
      
208,122
      
129,910
  
Operating profit
  
$
127,109
    
$
95,282
    
$
202,496
    
$
138,137
  
Depreciation, amortization, and impairment charges
    
78,343
      
58,096
      
155,503
      
110,350
  
Dividend from exchangeable preferred equity investment in ACBH
    
-
      
4,600
      
-
      
9,200
  
Further Adjusted EBITDA
  
$
205,452
    
$
157,978
    
$
357,999
    
$
257,687
  
Atlantica Yield’s pro-rata share of EBITDA from Unconsolidated Affiliates
    
2,193
      
1,622
      
4,525
      
7,099
  
Further Adjusted EBITDA including unconsolidated affiliates
  
$
207,645
    
$
159,600
    
$
362,524
    
$
264,786
  
 
12
 
Reconciliation of Further Adjusted EBITDA including unconsolidated affiliates to net cash provided by operating activities
 
(in thousands of U.S. dollars)
  
For the three-month period ended June 30,
    
For the six-month period ended June 30,
  
   
2016
    
2015
    
2016
    
2015
  
Further Adjusted EBITDA including unconsolidated affiliates
  
$
207,645
    
$
159,600
    
$
362,524
    
$
264,786
  
Atlantica Yield’s pro-rata share of EBITDA from unconsolidated affiliates
    
(2,193
)
    
(1,622
)
    
(4,525
)
    
(7,099
)
Further Adjusted EBITDA
  
$
205,452
    
$
157,978
    
$
357,999
    
$
257,687
  
Net interest and income tax paid
    
(137,372
)
    
(113,023
)
    
(164,985
)
    
(132,314
)
Variations in working capital
    
(21,450
)
    
21,037
      
(40,960
)
    
379
  
Other non-cash adjustments and other
    
(13,268
)
    
(24,060
)
    
(34,192
)
    
(46,443
)
Net cash provided by operating activities
  
$
33,363
    
$
41,932
    
$
117,862
    
$
79,309
  

Cash Available For Distribution Reconciliation
 
(in thousands of U.S. dollars)
  
For the three-month period ended June 30,
    
For the six-month period ended June 30,
  
   
2016
    
2015
    
2016
    
2015
  
Further Adjusted EBITDA including unconsolidated affiliates
  
$
207,645
    
$
159,600
    
$
362,524
    
$
264,786
  
Atlantica Yield’s pro-rata share of EBITDA from unconsolidated affiliates
    
(2,193
)
    
(1,622
)
    
(4,525
)
    
(7,099
)
Dividends from equity method investments
    
4,984
      
-
      
4,984
      
-
  
Non-monetary items
    
(12,563
)
    
(23,741
)
    
(30,919
)
    
(44,970
)
Interest and income tax paid
    
(137,372
)
    
(113,023
)
    
(164,985
)
    
(132,314
)
Principal amortization of indebtedness
    
(53,851
)
    
(41,873
)
    
(68,105
)
    
(50,663
)
Deposits into/ withdrawals from restricted accounts
    
12,291
      
(3,121
)
    
(21,864
)
    
(3,331
)
Change in non-restricted cash at project level
    
59,969
      
43,859
      
18,879
      
60,114
  
Dividends paid to non-controlling interests
    
(5,479
)
    
-
      
(5,479
)
    
-
  
Changes in other assets and liabilities
    
(33,824
)
    
24,516
      
(47,060
)
    
(3,428
)
ATN2 refinancing
    
-
      
-
      
14,893
      
-
  
Cash Available For Distribution7
  
$
39,607
    
$
44,595
    
$
58,343
    
$
83,095
  

7
Cash Available For Distribution includes a one-time impact of the refinancing of ATN2 for the three-month period ended March 31, 2016 and in the six-month period ended June 30, 2016.
 
13
 
About Atlantica Yield

Atlantica Yield plc is a total return company that owns a diversified portfolio of contracted renewable energy, power generation, electric transmission and water assets in North & South America, and certain markets in EMEA (www.atlanticayield.com).
 
 
Chief Financial Officer
Francisco Martinez-Davis
E  ir@atlanticayield.com
Investor Relations & Communication
Leire Perez
E  ir@atlanticayield.com
T  +44 20 3499 0465
 
 
14
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 
ATLANTICA YIELD PLC
     
Date: August 5, 2014
By:
 /s/ Santiago Seage
   
Name: Santiago Seage
   
Title: Chief Executive Officer