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Abengoa Yield's (ABY) CEO Javier Garoz Discusses Q2 2015 Results - Earnings Call Transcript

Javier Garoz - Chief Executive Officer

Good morning and thank you for joining us in our Second Quarter Earnings Conference Call.

Please proceed to Page 3. I will start with an overview of what has been achieved since our last call. It has been a quarter of solid execution and continuous growth. Regarding our solid execution, overall, we have reached strong levels of EBITDA and CAFD for the period. Our portfolio of assets has performed according to expectations. I am glad to announce the Board of Directors have approved a dividend of $0.40 per share meaning an 18% above the guidance of $0.34 we have provided for the second quarter. Thus, we are anticipating part of the $1.6 per share of dividend promise for 2015.

In terms of executing previously announced transactions, we have closed the acquisition of all the assets, included in ROFO 3, which are Helios, Solnovas, the pending stake of Helioenergy and Kaxu. In addition, as per our commitments last fall, we have obtained the credit ratings from S&P and Moody’s, which have resulted in BB+ and Ba3 respectively. In relation to our ability to deliver continuous equity of growth, a few days ago we announced our fourth asset acquisition for a total price of approximately $370 million, generating $31 million of incremental CAFD before any related financial expenses.

Firstly, the acquisition comprises the dropdown from Abengoa of Solaben 1 and 6. Two solar assets, very similar to the ones we already own. Secondly, after the project economics have improved significantly, we have closed the acquisition of Abengoa’s stake in ATN2, plus the stake of our financial investor, owning now 100% of this transmission line in Peru. And ultimately, we have reached an agreement to acquire a 13% of the stake owned by the Japanese firm, JGC in our asset Solacor, where we already own a 74%. These two last acquisitions are the first proof of a third-party acquisition. We expect to finance the three assets with the proceeds of the recently expanded revolving credit facility already signed with a syndicate of banks and cash on hand. We will continue pursuing third-party acquisitions through the end of the year within the target segments and geographies.

Moving to Page #6, we will now review the quarterly results. In the first half of the year, our revenues and further adjusted EBITDA have reached $309 million and $265 million respectively, so a very significant growth in the range of 80% to 90% with respect to the same period of the previous year. In the six months period, we have also been able to generate $83 million of cash available for distribution.

On Slide 7, you can see our revenues and further adjusted EBITDA breakdown by geography and business segment showing a strong performance across businesses and geographies quarter-after-quarter. We have experienced a very significant growth across all geographies, very much in line with our expectations. Looking at the results by business sector, in the renewable segment, we have had a very high growth, mainly driven by the assets we have acquired since our IPO and the entry into operations of Mojave. In the conventional segments, ACT in Mexico continues delivering excellent results. In the transmission segment, results have also been as expected.