Altius Renewable Royalties Corp. (ARR) Earnings Call Transcript & Summary

I will pause for questions or comments. Not seeing any questions or comments, the final item of business is the approval of the unallocated options, RSUs and DSUs available for issuance under ARR's... [Technical Difficulty] Ben, you may be muted.

Sorry, David. I lost you there for a second. I move that the issuance of the unallocated options, RSUs and DSUs available for issuance under ARR's long-term incentive plan as described in the circular be approved.

I second the motion.

A reminder to everyone that most of you have already cast your votes on these motions. Therefore, you do not need to vote again today on your screen. Are there any further director nominations? As there are no further nominations, I now declare the nominations closed. Again, voting is underway. And if you are eligible to vote, please cast your votes electronically based on the proxies received. In advance of the meeting, it is expected that all resolutions will pass. The polls will now be open for 1 additional minute. [Voting]

I now ask that TSX Trust now close the polls. I declare the motion to appoint Deloitte LLP Canada, Chartered Accountants, as the auditor of the corporation at a remuneration to be fixed by the Board carried. With respect to the election of directors, each nominee has received the majority of yes votes, and I declare them duly elected to act as directors of the corporation until the next annual election of directors or until their successors are elected or appointed subject to the provisions of the Business Corporations Act and the bylaws of the corporation. With respect to the motion approving on a nonbinding advisory basis the approach to executive compensation, this motion received a majority of favorable votes, and I declare it carried. Finally, with respect to the motion approving the unallocated options, RSUs and DSUs available for issuance under ARR's long-term incentive plans as described in the circular, this motion also received a majority of favorable votes, and I declare it carried. Are there any questions from the floor? I see no questions. So given that there are no questions, I would ask Ben Lewis to entertain a motion that the formal portion of this meeting be terminated. Ben?

I move this meeting be terminated.

I second the motion.

The formal part of the meeting has now been terminated, and I would like to turn the floor over to Brian Dalton, CEO of ARR; and Frank Getman, CEO of Great Bay Renewables, for their remarks. I would also point out that a presentation has been added on the ARR website under Investors Presentations, and you are welcome to peruse that presentation.

Thank you, Mr. Chairman. I'll have some very brief sort of summary remarks on the year. As David pointed out, there is a presentation that's available on the website. And following my remarks, we certainly welcome any questions with respect to, obviously, the remarks or to the materials that are included on the website presentation. And again, I'll point out that Frank Getman, CEO of Great Bay, is also available for any questions. So to summarize, it was actually quite a strong year for the business. We continue to see a very good ramp-up of royalty revenue relating to past investments as well as some new ones that were made over the course of the year. So generally speaking, we would say that we see revenue -- royalty revenue from the business ramping up largely to plan. It was another strong year as well in terms of what we're seeing as far as adoption for royalty type financing has been taking hold in the broader market. We would -- I think it's safe to say right now that most of the players within the renewable energy space, particularly in the U.S. and North American market, now recognize that renewable royalty financing is an alternative to more mainstream or traditional sources of financing. So that's a strong point of progress we're quite proud of. It was another good year for deal flow, and that certainly came through with some of the transactions that were announced. A lot of that has to do with the backdrop that we're seeing in the broader market. The more traditional forms of capital available to the sector are or have been quite constrained. Certainly, the cost of debt financing, which has always been a large part of the renewables industry, has gone up and become a little more constrained generally. And I think even more dramatically, there has been a lot of weight on equity valuations in the sector. So that tool has become a lot less attractive. And just for reference there, we note that the renewables index, the main TSX renewables index currently trades at about 1/3 of the level it would have when we completed the IPO 3 years ago. That's not to complain. That backdrop of more difficult mainstream or traditional financing sources has actually represented a strong tailwind for this business and has made royalty type financing relatively more attractive and has certainly brought quite a bit of business opportunity our way. Now that can be double-edged. Obviously, to the extent that we would require equity financing ourselves in order to complete these investments, well, that's difficult. But I think one of the key highlights of the past year was the ability of the GBR team to secure significant access to debt capital, so nondilutive equity financing. And it came -- it's of sufficient size and on attractive terms relative to the deal opportunity set and types of return profile we believe we're able to -- or we have been achieving in the marketplace. There was also a pretty strong progress throughout the year when I think back to some of the earlier-stage investments we've made in the last number of years, so backing developer pipelines. We're really starting to see a good flow of those projects work through the pipeline now and come out the other side as cash flowing royalties. So that's certainly -- it's an embedded part of the growth profile that we're envisioning, and we see that continuing the next few years for sure. Other backdrop elements, I guess there is remarkable growth in demand for electricity in the U.S. markets that we're active in. And the reasons for that are actually manyfold, but it's translating into a demand surge that really kind of growth projections that haven't been seen in many decades in that market. So that's pretty strong tailwind. And we're also seeing that a number of the customers who are seeking that additional access to power are very preferentially looking for that to be renewable-based. What else? I'd just comment that we continue to have an excellent working relationship with our JV partner at the GBR level in Apollo, continue to, I think, bring different strengths, but really a strong working relationship that I believe has not only helped us with sourcing deal flow, but it makes all of our deals that much tighter and better. I'm very, very happy with the team development at the GBR level that's occurred during the course of the year. There were some new additions to come in and help with the increased workload. And that integration has been very, very seamless. So well done to Frank and the whole team there in executing, I would say, to a degree that they've been fighting outside of their weight class. This has been a really fun, hardworking team to be part of. And again, congratulations, and I know you'll keep it going. And lastly for me, I just wanted to point out our great appreciation for the continuing support of you, our shareholders. And with that, please feel free to raise any questions. Either Frank or I would be happy to address those. And also, again, you can refer to the website presentation if you wish as part of that or just any general questions that you might have, we're happy to deal with. So over to questions, please. Mr. Chairman, I don't believe we have any questions from the floor today.

Thank you, Brian. At this point in time, I'll turn things over to TSX Trust to conclude the virtual aspect of this meeting.

Ladies and gentlemen, thank you for attending today's meeting. You may now disconnect.