Algonquin Power & Utilities Corp. has announced significant developments in their corporate strategy and financial performance for the third quarter of 2024. A key highlight is the decision to sell its renewable energy business, excluding hydro, to LS Power for a total consideration of up to $2.5 billion. This move is instrumental in the company's transition towards becoming a pure-play regulated utility, aiming to optimize its regulated business activities, improve its balance sheet, and enhance the quality of its earnings. The transaction, subject to customary closing conditions and regulatory approvals, is expected to close in the fourth quarter of 2024 or the first quarter of 2025.

Financially, Algonquin has reported its second quarter results, showing a steady performance with net utility and net energy sales of $474.9 million, maintaining the same level as previously. Adjusted EBITDA for the company saw a 12% increase to $311.0 million, with adjusted net earnings growing by 16% to $65.2 million. These results highlight the company's ongoing efforts to increase its quality of earnings and establish long-term value for its stakeholders.

In line with its strategic shift and in response to a higher cost of capital environment, Algonquin has adjusted its quarterly dividend to US$0.065 per common share, payable in October 2024. This adjustment represents a more sustainable payout to shareholders as the company looks to improve earnings and capital sustainability. Registered shareholders have the option to receive dividends in Canadian dollars, and the company has provided the equivalent dividend payments for its preferred shares.

The sale of the renewable energy business to LS Power is a pivotal step for Algonquin Power & Utilities Corp. to solidify its position as a pure-play regulated utility. The proceeds from this sale are anticipated to strengthen the company's financial position, allowing it to recapitalize its balance sheet and position itself for future growth. Moreover, this strategic move is complimented by the company's decision to adjust capital expenditures and dividends, aiming to enhance financial flexibility and reduce the need for external funding.

Algonquin Power & Utilities Corp.'s ongoing strategic transition underscores its commitment to providing safe, reliable, and sustainable energy and water solutions to its customers. With a focus on improving returns on significant investments and supporting a healthy dividend payout, the company is well-positioned to continue creating value for its customers and shareholders in the years ahead.