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Avangrid Inc (AGR) Reports Full Year 2023 Financial Results

  • Net Income: Reported $786 million for FY 2023, compared to $881 million for FY 2022.

  • Earnings Per Share (EPS): $2.03 for FY 2023, down from $2.28 in FY 2022.

  • Adjusted Net Income: Increased by 18% year-over-year when excluding specific gains and tax benefits from 2022.

  • Networks Business: Full year earnings of $726 million, reflecting new rate plans in New York and Maine.

  • Renewables Business: Full year earnings of $145 million, impacted by lower production and prices.

  • Operating Revenues: Increased to $8.309 billion in FY 2023 from $7.923 billion in FY 2022.

  • Webcast and Long-term Outlook: Scheduled for February 22, 2024, and March 21, 2024, respectively.

On February 21, 2024, Avangrid Inc (NYSE:AGR) released its consolidated financial results for the full year ended December 31, 2023, as detailed in its 8-K filing. The company, a leading sustainable energy company and part of the Iberdrola group, reported a U.S. GAAP net income of $786 million, or $2.03 per share, a decrease from $881 million, or $2.28 per share, for the full year 2022. However, when adjusting for certain gains and tax benefits from the previous year, the adjusted net income for 2023 reflects an 18% growth year-over-year.

Avangrid operates two primary business units: Networks and Renewables. Networks, which serves over 3.3 million customers across New York, Maine, Connecticut, and Massachusetts, reported earnings of $726 million for the full year 2023, up from $628 million in 2022. This increase is attributed to the implementation of new rate plans in New York and Maine. The Renewables segment, historically focused on onshore wind and expanding into solar and offshore wind, reported earnings of $145 million for the full year 2023, down from $386 million in 2022, primarily due to lower production and prices, as well as the absence of favorable taxes recorded in the previous year.

Financial Performance and Challenges

Avangrid's financial achievements are significant within the Utilities - Regulated industry, as they reflect the company's ability to grow its core businesses and manage regulatory challenges effectively. The approved regulated rate base investments exceeding $9 billion underscore the company's commitment to infrastructure development and long-term growth. However, the Renewables segment faced headwinds with lower production and prices, highlighting the volatility and challenges within the renewable energy market.

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CEO Pedro Azagra commented on the results, stating, "Our excellent results for 2023 demonstrate our commitment to execution. We delivered 18% yearly adjusted earnings growth from our core businesses and removed legacy uncertainties." This statement emphasizes the company's strategic focus and successful navigation of the energy sector's complexities.

We secured new multi-year rate plans in New York and Maine including more than $9 billion of approved regulated rate base investments and avoided significant offshore wind write-offs, preserving the future value of our offshore wind leases and continuing to benefit as a member of the Iberdrola group," Azagra added.

Key Financial Metrics

Avangrid's income statement shows an increase in operating revenues to $8.309 billion in FY 2023 from $7.923 billion in FY 2022. Operating expenses also increased, primarily due to higher purchased power, natural gas, and fuel used, as well as operations and maintenance expenses. The balance sheet and cash flow statements were not provided in the summary, but the reported net income and EPS are critical metrics for investors, indicating the company's profitability and earnings potential.

The company's performance is further detailed in the reconciliation of non-U.S. GAAP financial measures, which adjusts for items such as mark-to-market adjustments and accelerated depreciation, providing a clearer picture of Avangrid's core operational results.

Looking ahead, Avangrid has scheduled a webcast for an audio-only financial presentation on February 22, 2024, and a Long-term Outlook Update webcast on March 21, 2024. These events will offer further insights into the company's strategic plans and financial outlook.

For a detailed breakdown of Avangrid's financial results and to access the full earnings report, please visit the 8-K filing.

Explore the complete 8-K earnings release (here) from Avangrid Inc for further details.

This article first appeared on GuruFocus.