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Alimentation Couche-Tard Announces its Results for its Second Quarter of Fiscal Year 2021

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  • Net earnings attributable to shareholders of the Corporation (“net earnings”) were $757.0 million or $0.68 per diluted share for the second quarter of fiscal 2021 compared with $578.6 million or $0.51 per diluted share for the second quarter of fiscal 2020. Adjusted net earnings were approximately $735.0 million1 compared with $569.0 million1 for the second quarter of fiscal 2020. Adjusted net earnings per share on a diluted basis were $0.661, representing an increase of 32.0% from $0.501 for the corresponding quarter of last year.
  • The COVID-19 pandemic continues to have a meaningful impact on the Corporation’s quarterly financial results. Traffic remained soft throughout its network due to ongoing restrictive social measures and continued work from home trends across the various geographies in which it operates. From a merchandise perspective, sales benefited from consolidation of trips, new shopping options and diversified product offerings. From a fuel perspective, volumes improved compared to the prior quarter, particularly in Europe which benefited from favorable summer weather, but remained challenged by work from home trends and evolving local restrictions, while fuel margins remained healthy.
  • Total merchandise and service revenues of $3.8 billion, an increase of 6.3%. Same-store merchandise revenues increased 4.4% in the U.S., 8.6% in Europe, and 11.4% in Canada.
  • Merchandise and service gross margin increased 0.1% in the U.S. to 34.0%, while it decreased 1.1% to 40.2% in Europe, negatively impacted by product mix, and remained steady in Canada at 32.6%.
  • Same-store road transportation fuel volume decreased 15.5% in the U.S., 4.5% in Europe, and 11.8% in Canada.
  • Road transportation fuel gross margin increased by 9.19¢ per gallon in the U.S. to 37.48¢ per gallon, by US 2.76¢ per liter in Europe to US 11.10¢ per liter, and by CA 2.16¢ per liter in Canada to CA 10.05¢ per liter.
  • Normalized operating, selling, administrative and general expenses declined 0.8% as rigorous cost control more than compensated for the additional COVID-19 related expenses.
  • Subsequent to the end of the quarter, the Corporation entered into an agreement to acquire all the issued and outstanding shares of Convenience Retail Asia (BVI) Limited for approximately $360.0 million.
  • The Corporation’s cash position is stronger than ever, with access to approximately $6.0 billion through its available cash and revolving unsecured operating credit facility. Its leverage ratio2 stood at 1.13 : 1, on a pro forma basis.
  • 25.0% increase of the quarterly dividend, from CA 7.00¢ to CA 8.75¢.
  • The Corporation announced the renewal of its share repurchase program which will allow it to repurchase up to 4.0% of the public float of its Class B subordinate voting shares.
  • Return on capital employed2 stood at 17.3%, on a pro forma basis.

LAVAL, QC, Nov. 24, 2020 /PRNewswire/ – For its second quarter ended October 11, 2020, Alimentation Couche-Tard Inc. (“Couche-Tard” or the “Corporation”) (TSX: ATD.A) (TSX: ATD.B) announces net earnings attributable to shareholders of the Corporation of $757.0 million, representing $0.68 per share on a diluted basis. The results for the second quarter of fiscal 2021 were affected by a pre-tax gain on disposal of $40.9 million related to the sale of a property located in Toronto, Canada, a pre-tax net foreign exchange loss of $8.9 million, as well as pre-tax acquisition costs of $1.2 million. The results for the comparable quarter of fiscal 2020 were affected by a pre-tax net foreign exchange gain of $11.8 million, pre-tax acquisition costs of $0.8 million, as well as a tax benefit from the second tranche of the December 2018 asset exchange agreement with CAPL, of which $0.7 million was attributable to shareholders of the Corporation. Excluding these items, the adjusted net earnings were approximately $735.0 million1 or $0.661 per share on a diluted basis for the second quarter of fiscal 2021, compared with $569.0 million1 or $0.501 per share on a diluted basis for the second quarter of fiscal 2020, an increase of 32.0% in the adjusted net earnings per share on a diluted basis, driven by strong growth in merchandise and service and in road transportation fuel gross profit, as well as by good cost control. All financial information presented is in US dollars unless stated otherwise.

“Across our global network, we had a strong second quarter, both in our stores and on our forecourts, even with the continuing impact of COVID-19. New customers and associated share gains since the start of the pandemic have continued as consumers take advantage of the convenience and proximity of our locations. This led to solid same-store sales growth of 4.4% in the U.S., 8.6% in Europe, and 11.4% in Canada. In Europe, we also had improvement in fuel volumes with strong B2B performance and favorable weather encouraging consumer travel. Overall, we continued to achieve healthy fuel margins during the quarter bolstered by conversions to the Circle K fuel brand and a continued focus in sourcing and logistics capabilities, which we expect will lead to improvements in the value chain and margins over time,” said Brian Hannasch, President and Chief Executive Officer of Alimentation Couche-Tard.

“We continue to be very pleased with developments in our food program, which is the biggest project ever undertaken by the organization. In the U.S., despite COVID-19 and associated supply chain disruptions, we met our target of introducing 1,500 Fresh Food, Fast locations by this fall. Our focus remains on the quality and ease of our fresh food offer, both for our customers and our team members. Stores with Fresh Food, Fast have been performing very well relative to test stores, and we are also customizing the offer to meet the tastes and pricing needs of our local communities. Based on these results, we plan to rollout the program in another 3,000 locations in North America by the end of fiscal year 2022. I am particularly proud that we are meeting our food service deployment goals through the challenges of this year,” concluded Brian Hannasch.

Claude Tessier, Chief Financial Officer, said: “Our business continues to show a lot of flexibility and resilience despite the disruptions on shopping and commuting behaviors caused by the pandemic. Once again, we executed well during the second quarter on our cost optimization initiatives including solid labor efficiencies, savings in goods-not-for-resale and strong control on discretionary expenses. Our balance sheet, with $6.0 billion of cash, on hand and available under our credit facility, remains well-positioned to support our global growth ambition. We continue to favor a balanced approach towards capital allocation and have announced the renewal of our share repurchase program representing 4.0% of the public float of our Class B shares to complement our quarterly dividend, for which an increase of 25.0% was approved on November 24, 2020.”

___________________________

1

Please refer to the section “Net earnings attributable to shareholders of the Corporation (“net earnings”) and adjusted net earnings attributable to shareholders of the Corporation (“adjusted net earnings”)” of this press release for additional information on this performance measure not defined by IFRS.

2

Please refer to the section “Summary Analysis of Consolidated Results for the Second Quarter and First Half-year of Fiscal 2021” of this press release for additional information on these performance measures not defined by IFRS.

Significant Items of the Second Quarter of Fiscal 2021

  • The COVID-19 pandemic continues to have a meaningful impact on our quarterly financial results. Traffic remained soft throughout our network due to ongoing restrictive social measures and continued work from home trends across the various geographies in which we operate. The impact of lower traffic on the merchandise sales was however more than offset by an increase in the average basket size as consumers consolidated their trips and took advantage of new shopping options and diversified product offerings. From a fuel perspective, volumes improved compared to the prior quarter, particularly in Europe which benefited from favorable summer weather, but remained challenged by work from home trends and evolving local restrictions, while fuel margins remained healthy. Lastly, from an operating expense perspective, the initiatives implemented across our network to reduce our controllable expenses had a favorable impact while we continued to promote and support the wellness of our employees and customers.
  • The terms and conditions of our investments in Fire & Flower Holdings Corp. were amended mainly to modify the maturity and expiry dates of the financial instruments, as well as their respective conversion and exercise price to a lower strike price or to a market-based price. The amendments also gave rise to a commitment from Couche-Tard to exercise a portion of the common share purchase warrants for an amount of CA $19.0 million, no later than December 31, 2020, of which CA $10.3 million ($7.8 million) was exercised during the second quarter.
  • We disposed of a property located in Toronto, Canada, for a cash consideration of $54.7 million and recognized to earnings a gain on disposal of $40.9 million.
  • We fully repaid, at maturity, our CA $300.0 million ($227.1 million) Canadian-dollar-denominated senior unsecured notes issued on August 21, 2013.
  • On November 24, 2020, subsequent to the end of the quarter, the Toronto Stock Exchange approved the renewal of our share repurchase program which will allow us to repurchase up to 4.0% of the public float of our Class B subordinate voting shares.

Changes in our Network during the Second Quarter of Fiscal 2021

  • We closed the sixth and final transaction of the December 2018 asset exchange agreement with CrossAmerica Partners LP (“CAPL”). In this sixth transaction, we transferred 24 Circle K U.S. stores for a total value of approximately $20.0 million. In exchange, CAPL transferred the real estate for 4 properties of an equivalent value.
  • We acquired 10 company-operated stores from Wadsworth Oil Company of Clanton, Inc., all located in Alabama, within the United States. We settled this transaction using our available cash and existing credit facilities.
  • We acquired one company-operated store, reaching a total of two single-site acquisitions since the beginning of fiscal year 2021.
  • We completed the construction of 13 stores and the relocation or reconstruction of 1 store, reaching a total of 38 stores since the beginning of fiscal year 2021. As of October 11, 2020, another 51 stores were under construction and should open in the upcoming quarters.
  • On November 5, 2020, subsequent to the end of the quarter, we entered into an agreement to acquire all the issued and outstanding shares of Convenience Retail Asia (BVI) Limited (“Circle K HK”) for a purchase price of HK $2.8 billion, or approximately $360.0 million. Circle K HK, a subsidiary of Convenience Retail Asia Limited, operates a network of Circle K-licensed convenience stores, with 340 company-operated stores in Hong Kong and 33 franchised stores in Macau. The transaction is still subject to Convenience Retail Asia Limited shareholders’ approval and we expect it to close before the end of calendar year 2020.
  • On November 12, 2020, subsequent to the end of the quarter, we acquired seven company-operated stores from Pride C-Stores Inc., all located in Indiana, within the United States. We settled this transaction using our available cash and existing credit facilities.

Summary of changes in our store network

The following table presents certain information regarding changes in our store network over the 12-week period ended October 11, 2020:




12-week period ended October 11, 2020

Type of site

Company-
operated


CODO


DODO


Franchised and
 other affiliated


Total

Number of sites, beginning of period

9,647


435


662


1,244


11,988

Acquisitions

11




3


14

Openings / constructions / additions

13


1


9


16


39

Closures / disposals / withdrawals

(40)


(4)


(5)


(9)


(58)

Store conversion

2


(26)


24



Number of sites, end of period

9,633


406


690


1,254


11,983

Circle K branded sites under licensing agreements









2,221

Total network









14,204

Number of automated fuel stations included in the period-end figures

986



9



995

Exchange Rate Data

We use the US dollar as our reporting currency, which provides more relevant information given the predominance of our operations in the United States.

The following table sets forth information about exchange rates based upon closing rates expressed as US dollars per comparative currency unit:


12-week periods ended

24-week periods ended


October 11, 2020

October 13, 2019

October 11, 2020

October 13, 2019

Average for period





Canadian dollar

0.7541

0.7547

0.7416

0.7531

Norwegian krone

0.1101

0.1115

0.1064

0.1134

Swedish krone

0.1136

0.1032

0.1097

0.1044

Danish krone

0.1582

0.1482

0.1538

0.1494

Zloty

0.2653

0.2551

0.2568

0.2589

Euro

1.1777

1.1063

1.1453

1.1150

Ruble

0.0134

0.0154

0.0137

0.0155






Summary Analysis of Consolidated Results for the Second Quarter and First Half-year of Fiscal 2021

The following table highlights certain information regarding our operations for the 12 and 24-week periods ended October 11, 2020, and October 13, 2019. CAPL refers to CrossAmerica Partners LP.


12-week periods ended

24-week periods ended

(in millions of US dollars, unless otherwise stated)

October 11,
2020

October 13,
2019

Variation

%

October 11,
2020

October 13,
2019

Variation
%

Statement of Operations Data:







Merchandise and service revenues(1):







United States

2,736.4

2,629.8

4.1

5,587.8

5,287.6

5.7

Europe

394.6

331.3

19.1

737.8

684.4

7.8

Canada

629.8

568.4

10.8

1,293.0

1,144.0

13.0

CAPL

9.8

(100.0)

29.6

(100.0)

Elimination of intercompany transactions with CAPL

(0.3)

(100.0)

(0.8)

(100.0)

Total merchandise and service revenues

3,760.8

3,539.0

6.3

7,618.6

7,144.8

6.6

Road transportation fuel revenues:







United States

4,438.3

6,519.0

(31.9)

8,344.3

13,320.5

(37.4)

Europe

1,496.2

1,876.5

(20.3)

2,678.6

3,796.3

(29.4)

Canada

875.7

1,130.8

(22.6)

1,552.7

2,332.2

(33.4)

CAPL

530.1

(100.0)

1,097.5

(100.0)

Elimination of intercompany transactions with CAPL

(116.1)

(100.0)

(237.5)

(100.0)

Total road transportation fuel revenues

6,810.2

9,940.3

(31.5)

12,575.6

20,309.0

(38.1)

Other revenues(2):







United States

9.5

8.1

17.3

17.0

15.0

13.3

Europe

69.5

161.8

(57.0)

144.7

316.9

(54.3)

Canada

5.4

5.3

1.9

9.3

10.1

(7.9)

CAPL

27.0

(100.0)

52.8

(100.0)

Elimination of intercompany transactions with CAPL

(3.5)

(100.0)

(7.6)

(100.0)

Total other revenues

84.4

198.7

(57.5)

171.0

387.2

(55.8)

Total revenues

10,655.4

13,678.0

(22.1)

20,365.2

27,841.0

(26.9)

Merchandise and service gross profit(1):







United States

931.5

891.8

4.5

1,919.8

1,796.7

6.9

Europe

158.6

136.9

15.9

297.8

283.4

5.1

Canada

205.1

185.1

10.8

415.6

374.6

10.9

CAPL

2.2

(100.0)

6.8

(100.0)

Elimination of intercompany transactions with CAPL

(0.3)

(100.0)

(0.8)

(100.0)

Total merchandise and service gross profit

1,295.2

1,215.7

6.5

2,633.2

2,460.7

7.0

Road transportation fuel gross profit:







United States

767.4

698.4

9.9

1,579.9

1,370.9

15.2

Europe

283.2

226.2

25.2

519.7

448.4

15.9

Canada

97.3

86.4

12.6

179.0

167.9

6.6

CAPL

23.9

(100.0)

47.0

(100.0)

Total road transportation fuel gross profit

1,147.9

1,034.9

10.9

2,278.6

2,034.2

12.0

Other revenues gross profit(2):







United States

9.5

8.1

17.3

17.0

15.0

13.3

Europe

27.4

31.9

(14.1)

58.3

63.2

(7.8)

Canada

5.4

5.2

3.8

9.3

10.0

(7.0)

CAPL

27.0

(100.0)

52.8

(100.0)

Elimination of intercompany transactions with CAPL

(3.5)

(100.0)

(7.6)

(100.0)

Total other revenues gross profit

42.3

68.7

(38.4)

84.6

133.4

(36.6)

Total gross profit

2,485.4

2,319.3

7.2

4,996.4

4,628.3

8.0

Operating, selling, administrative and general expenses







Excluding CAPL(11)

1,194.4

1,214.8

(1.7)

2,365.4

2,439.1

(3.0)

CAPL

18.3

(100.0)

38.5

(100.0)

Elimination of intercompany transactions with CAPL

(3.7)

(100.0)

(8.1)

(100.0)

Total Operating, selling, administrative and general expenses

1,194.4

1,229.4

(2.8)

2,365.4

2,469.5

(4.2)

(Gain) loss on disposal of property and equipment and other assets

(35.1)

1.0

(3,610.0)

(43.9)

11.1

(495.5)

Depreciation, amortization and impairment







Excluding CAPL

305.8

292.9

4.4

595.3

577.1

3.2

CAPL

23.3

(100.0)

46.2

(100.0)

Total depreciation, amortization and impairment

305.8

316.2

(3.3)

595.3

623.3

(4.5)

Operating income







Excluding CAPL

1,020.3

763.0

33.7

2,079.6

1,506.0

38.1

CAPL

9.8

(100.0)

18.7

(100.0)

Elimination of intercompany transactions with CAPL

(0.1)

(100.0)

(0.3)

(100.0)

Total operating income

1,020.3

772.7

32.0

2,079.6

1,524.4

36.4

Net financial expenses

77.2

60.1

28.5

165.2

147.1

12.3

Net earnings including non-controlling interests

757.0

579.4

30.7

1,534.1

1,115.4

37.5

Net (earnings) loss attributable to non-controlling interests

(0.8)

(100.0)

2.0

(100.0)

Net earnings attributable to shareholders of the Corporation

757.0

578.6

30.8

1,534.1

1,117.4

37.3

Per Share Data:







Basic net earnings per share (dollars per share)

0.68

0.51

33.3

1.38

0.99

39.4

Diluted net earnings per share (dollars per share)

0.68

0.51

33.3

1.38

0.99

39.4

Adjusted diluted net earnings per share (dollars per share)(11)

0.66

0.50

32.0

1.37

0.99

38.4
















12-week periods ended

24-week periods ended

(in millions of US dollars, unless otherwise stated)

October 11,
2020

October 13,
2019

Variation

%

October 11,
2020

October 13,
2019

Variation

 %

Other Operating Data – excluding CAPL:







Merchandise and service gross margin(1):







Consolidated

34.4%

34.4%

34.6%

34.5%

0.1

United States

34.0%

33.9%

0.1

34.4%

34.0%

0.4

Europe

40.2%

41.3%

(1.1)

40.4%

41.4%

(1.0)

Canada

32.6%

32.6%

32.1%

32.7%

(0.6)

Growth of same-store merchandise revenues(3):







United States(4)

4.4%

3.2%


6.1%

2.9%


Europe

8.6%

3.3%


6.0%

2.0%


Canada(4)

11.4%

2.1%


15.7%

1.2%


Road transportation fuel gross margin:







United States (cents per gallon)(4)

37.48

28.29

32.5

40.14

27.57

45.6

Europe (cents per liter)

11.10

8.34

33.1

10.82

8.39

29.0

Canada (CA cents per liter)(4)

10.05

7.89

27.4

10.16

7.64

33.0

Total volume of road transportation fuel sold:







United States (millions of gallons)

2,098.2

2,601.8

(19.4)

4,049.1

5,192.4

(22.0)

Europe (millions of liters)

2,550.7

2,713.2

(6.0)

4,801.2

5,346.8

(10.2)

Canada (millions of liters)

1,288.4

1,458.4

(11.7)

2,380.8

2,931.0

(18.8)

 (Decrease in) growth of same-store road transportation fuel

   volume:







United States(4)

(15.5)%

0.6%


(18.4)%

0.6%


Europe(4)

(4.5)%

(0.6)%


(8.3)%

(1.1)%


Canada(4)

(11.8)%

0.2%


(18.7)%

0.3%


(in millions of US dollars, unless otherwise stated)

As at
October 11, 2020

As at
April 26, 2020

Variation
 $

Balance Sheet Data:




Total assets

26,767.1

25,679.5

1,087.6

Interest-bearing debt (5)

9,043.4

10,379.3

(1,335.9)

Equity

11,919.9

10,066.6

1,853.3

Indebtedness Ratios(6):




Net interest-bearing debt/total capitalization(5)(7)

0.32 : 1 

0.40 : 1 


Leverage ratio(8)(11)

1.13 : 1 

1.54 : 1 


Returns(6):




Return on equity(9)

25.7%

24.8%


Return on capital employed(10)

17.3%

15.0%




(1)

Includes revenues derived from franchise fees, royalties, suppliers’ rebates on some purchases made by franchisees and licensees, as well as from wholesale of merchandise.

(2)

Includes revenues from the rental of assets and from the sale of aviation fuel and energy for stationary engines.

(3)

Does not include services and other revenues (as described in footnotes 1 and 2 above). Growth in Canada and in Europe is calculated based on local currencies.

(4)

For company-operated stores only.

(5)

This measure is presented including the following balance sheet accounts: Current portion of long-term debt, Long-term debt, Current portion of lease liabilities, and Lease liabilities.

(6)

Until November 2019, these measures are presented as if our investment in CAPL was reported using the equity method as we believe it allows a more relevant presentation of the underlying performance of the Corporation.

(7)

This measure is presented for information purposes only and represents a measure of financial condition used especially in financial circles. It represents the following calculation: interest-bearing debt, net of cash and cash equivalents and temporary investments divided by the addition of shareholders’ equity and interest-bearing debt, net of cash and cash equivalents and temporary investments. It does not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other public corporations. We believe this measure is useful to investors and analysts.

(8)

This measure is presented for information purposes only and represents a measure of financial condition used especially in financial circles. It represents the following calculation: interest-bearing debt, net of cash and cash equivalents and temporary investments divided by EBITDA for the last 52 weeks (Earnings before Interest, Tax, Depreciation, Amortization and Impairment) adjusted for specific items. It does not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other public corporations. We believe this measure is useful to investors and analysts.

(9)

This measure is presented for information purposes only and represents a measure of performance used especially in financial circles. It represents the following calculation: net earnings for the last 52 weeks divided by average equity for the corresponding period. It does not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other public corporations. We believe this measure is useful to investors and analysts.

(10)

This measure is presented for information purposes only and represents a measure of performance used especially in financial circles. It represents the following calculation: earnings before income taxes and interests for the last 52 weeks divided by average capital employed for the corresponding period. Capital employed represents total assets less short-term liabilities not bearing interests. It does not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other public corporations. We believe this measure is useful to investors and analysts.

(11)

Prior figures such as Adjusted EBITDA, Adjusted net earnings, as well as Adjusted diluted net earnings per share have been updated to remove the restructuring costs. This adjustment had no impact on the leverage ratio as of April 26, 2020. For additional information on these performance measures not defined by IFRS, please refer to the sections “Earnings before interest, taxes, depreciation, amortization and impairment (EBITDA) and adjusted EBITDA”, as well as “Net earnings attributable to shareholders of the Corporation (“net earnings”) and adjusted net earnings attributable to shareholders of the Corporation (“adjusted net earnings”)” of this press release. In addition, Operating, selling, administrative and general expenses excluding CAPL for the 12 and 24-week periods ended October 13, 2019 now include the restructuring costs that were previously presented on a distinct line.

Revenues

Our revenues were $10.7 billion for the second quarter of fiscal 2021, down by $3.0 billion, a decrease of 22.1% compared with the corresponding quarter of fiscal 2020. This performance is mainly attributable to a lower average road transportation fuel selling price, to the negative impact of COVID-19 on fuel demand, and to the disposal of our interests in CAPL which had an impact of approximately $447.0 million, partly offset by strong organic growth on merchandise and service sales, as well as by the net positive impact from the translation of revenues of our Canadian and European operations into US dollars, which had an impact of approximately $154.0 million.

For the first half-year of fiscal 2021, our revenues decreased by $7.5 billion or 26.9% compared with the corresponding period of fiscal 2020, mainly attributable to similar factors as those of the second quarter.

Merchandise and service revenues

Total merchandise and service revenues for the second quarter of fiscal 2021 were $3.8 billion, an increase of $221.8 million compared with the corresponding quarter of fiscal 2020. Excluding CAPL’s revenues, as well as the net positive impact from the translation of our Canadian and European operations into US dollars, merchandise and service revenues increased by approximately $208.0 million or 5.9%. This increase is primarily attributable to growth in basket size, which more than offset continued softness in traffic. The tobacco, package beverage, alcohol and grocery products categories continued to perform well all across our regions while in Europe, our fresh food category outperformed last year results. Same-store merchandise revenues increased by 4.4% in the United States, by 8.6% in Europe, and by 11.4% in Canada.

For the first half-year of fiscal 2021, the growth in merchandise and service revenues was $473.8 million compared with the first half-year of fiscal 2020. Excluding CAPL’s revenues, as well as the net negative impact from the translation of our Canadian and European operations into US dollars, merchandise and service revenues increased by approximately $512.0 million or 7.2%. Same-store merchandise revenues increased by 6.1% in the United States, by 6.0% in Europe and by 15.7% in Canada.

Road transportation fuel revenues

Total road transportation fuel revenues for the second quarter of fiscal 2021 were $6.8 billion, a decrease of $3.1 billion compared with the corresponding quarter of fiscal 2020. Excluding CAPL’s revenues, as well as the net positive impact from the translation of revenues of our Canadian and European operations into US dollars, road transportation fuel revenues decreased by approximately $2.8 billion, or 29.8%. This decrease is mostly attributable to a lower average road transportation fuel selling price, which had a negative impact of approximately $1.3 billion, as well as to the decrease on fuel demand in relation with the work from home trends due to the COVID-19 pandemic. Same-store road transportation fuel volume decreased by 15.5% in the United States, by 4.5% in Europe, and by 11.8% in Canada.

For the first half-year of fiscal 2021, the road transportation fuel revenues decreased by $7.7 billion compared with the first half-year of fiscal 2020. Excluding CAPL’s revenues, as well as the net negative impact from the translation of our Canadian and European operations into US dollars, road transportation fuel revenues decreased by approximately $6.9 billion or 35.3%. The negative impact of the lower average road transportation fuel selling price was approximately $3.1 billion. Same-store road transportation fuel volume decreased by 18.4% in the United States, by 8.3% in Europe, and by 18.7% in Canada.

The following table shows the average selling price of road transportation fuel of our company-operated stores in our various markets for the last eight quarters, starting with the third quarter of the fiscal year ended April 28, 2019:

Quarter

3rd

4th

1st

2nd

Weighted
average

52-week period ended October 11, 2020







United States (US dollars per gallon) – excluding CAPL

2.51

2.21

2.04

2.14

2.26


Europe (US cents per liter)

73.92

60.95

56.89

63.19

64.91


Canada (CA cents per liter)

103.47

88.78

86.89

92.00

94.34

52-week period ended October 13, 2019







United States (US dollars per gallon) – excluding CAPL

2.42

2.51

2.66

2.55

2.53


Europe (US cents per liter)

75.28

74.59

77.35

70.86

74.55


Canada (CA cents per liter)

97.59

103.45

111.16

105.14

103.86

Other revenues

Total other revenues for the second quarter and first half-year of fiscal 2021 were $84.4 million and $171.0 million, respectively, a decrease of $114.3 million and $216.2 million compared with the corresponding periods of fiscal 2020. Excluding CAPL’s revenues, as well as the net positive impact from the translation of our Canadian and European operations into US dollars, other revenues decreased by $101.3 million and by $175.9 million in the second quarter and first half-year of fiscal 2021, respectively, primarily driven by lower demand and lower average selling prices in our other fuel products, which had a minimal impact on gross profit.

Gross profit

Our gross profit was $2.5 billion for the second quarter of fiscal 2021, up by $166.1 million, or 7.2%, compared with the corresponding quarter of fiscal 2020, mainly attributable to higher road transportation fuel gross margins, to strong organic growth in our convenience activities, as well as to the net positive impact from the translation of our Canadian and European operations into US dollars, which had an impact of approximately $25.0 million, partly offset by the negative impact of COVID-19 on fuel demand, and by the disposal of our interests in CAPL which had an impact of approximately $49.0 million.

For the first half-year of fiscal 2021, our gross profit increased by $368.1 million, or 8.0%, compared with the first half-year of fiscal 2020, mainly attributable to similar factors as those of the second quarter.

Merchandise and service gross profit

In the second quarter of fiscal 2021, our merchandise and service gross profit was $1.3 billion, an increase of $79.5 million compared with the corresponding quarter of fiscal 2020. Excluding CAPL’s gross profit, as well as the net positive impact from the translation of our Canadian and European operations into US dollars, merchandise and service gross profit increased by approximately $72.0 million, or 5.9%, mainly attributable to strong organic growth, despite lower traffic in our network due to COVID-19. Our gross margin increased by 0.1% in the United States to 34.0%, while it decreased by 1.1% in Europe to 40.2% due to our product mix towards lower margin categories. It remained steady at 32.6% in Canada.

During the first half-year of fiscal 2021, our merchandise and service gross profit was $2.6 billion, an increase of $172.5 million compared with the first half-year of fiscal 2020. Excluding CAPL’s gross profit, as well as the net negative impact from the translation of our Canadian and European operations into US dollars, merchandise and service gross profit increased by approximately $181.0 million, or 7.4%. The gross margin increased by 0.4% to 34.4% in the United States, while it decreased by 1.0% in Europe to 40.4%, and by 0.6% in Canada to 32.1%.

Road transportation fuel gross profit

In the second quarter of fiscal 2021, our road transportation fuel gross profit was $1.1 billion, an increase of $113.0 million compared with the corresponding quarter of fiscal 2020. Excluding CAPL’s gross profit, as well as the net positive impact from the translation of our Canadian and European operations into US dollars, our road transportation fuel gross profit increased by approximately $124.0 million, or 12.2%. In the United States, our road transportation fuel gross margin was 37.48¢ per gallon, an increase of 9.19¢ per gallon, in Europe, it was US 11.10¢ per liter, an increase of US 2.76¢ per liter, and in Canada, it was CA 10.05¢ per liter, an increase of CA 2.16¢ per liter. Growth in road transportation fuel gross margins were driven by decline in fuel product costs, changes in the competitive landscape and improved supply conditions.

During the first half-year of fiscal 2021, our road transportation fuel gross profit was $2.3 billion, an increase of $244.4 million compared with the first half-year of fiscal 2020. Excluding CAPL’s gross profit, as well as the net positive impact from the translation of our Canadian and European operations into US dollars, road transportation fuel gross profit increased by approximately $291.0 million, or 14.7%. The road transportation fuel gross margin was 40.14¢ per gallon in the United States, US 10.82¢ per liter in Europe, and CA 10.16¢ per liter in Canada.

The road transportation fuel gross margin of our company-operated stores in the United States and the impact of expenses related to electronic payment modes for the last eight quarters, starting with the third quarter of the fiscal year ended April 28, 2019, were as follows:

(US cents per gallon)






Quarter

3rd

4th

1st

2nd

Weighted
average

52-week period ended October 11, 2020






Before deduction of expenses related to electronic payment modes

27.04

46.88

42.99

37.48

37.10

Expenses related to electronic payment modes

4.54

4.97

4.88

4.79

4.76

After deduction of expenses related to electronic payment modes

22.50

41.91

38.11

32.69

32.34

52-week period ended October 13, 2019






Before deduction of expenses related to electronic payment modes

29.42

18.51

26.86

28.29

26.00

Expenses related to electronic payment modes

4.31

4.40

4.70

4.63

4.50

After deduction of expenses related to electronic payment modes

25.11

14.11

22.16

23.66

21.50

Generally, during normal economic cycles, road transportation fuel margins in the United States can be volatile from one quarter to another but have historically trended higher over longer periods. The historical trends for Europe and Canada are similar, while the margin volatility and expenses related to electronic payment modes are not as significant.

Other revenues gross profit

In the second quarter and first half-year of fiscal 2021, other revenues gross profit was $42.3 million and $84.6 million, respectively, a decrease of $26.4 million and of $48.8 million, compared with the corresponding periods of fiscal 2020. Excluding CAPL’s gross profit, as well as the net positive impact from the translation of our Canadian and European operations into US dollars, other revenues gross profit decreased by approximately $5.0 million and $4.0 million in the second quarter and first half-year of fiscal 2021, respectively, mainly driven by a decrease in rental income.

Operating, selling, administrative and general expenses (“expenses”)

For the second quarter and first half-year of fiscal 2021, expenses decreased by 2.8% and 4.2%, respectively, compared with the corresponding periods of fiscal 2020. If we exclude certain items that are not considered indicative of future trends, expenses decreased by 0.8% and 0.6%, respectively.


12-week period ended
October 11, 2020

24-week period ended
October 11, 2020

Total variance, as reported

(2.8%)

(4.2%)

Adjusted for:



Decrease from lower electronic payment fees, excluding acquisitions

1.6%

2.0%

Decrease from the disposal of our interests in CAPL

1.5%

1.6%

Increase from the net impact of foreign exchange translation

(1.2%)

Impact from the December 2018 asset exchange agreement with CAPL, net of electronic payment fees

0.4%

0.5%

Increase from incremental expenses related to acquisitions

(0.3%)

(0.3%)

Acquisition costs recognized to earnings of fiscal 2021

(0.1%)

(0.2%)

Acquisition costs recognized to earnings of fiscal 2020

0.1%

Remaining variance

(0.8%)

(0.6%)

We were able to achieve this decrease while maintaining the investments in our stores to support our strategic initiatives, even though we continue to see higher labor costs from minimum wage increases in certain regions, normal inflation and COVID-19 related expenses. This decrease was a result of cost and labor efficiencies, as well as rigorous work and activities initiated to streamline and minimize our controllable expenses. COVID-19 related expenses of the second quarter of fiscal 2021 include, but are not limited to, severance costs, additional cleaning and sanitizing supplies, as well as masks and gloves for our employees. For the first half-year of fiscal 2021, it also includes an emergency appreciation pay premium of $2.50 per hour in North America for hourly store employees and distribution center employees, and Thank you bonuses in North America following the end of the appreciation pay premium.

Earnings before interest, taxes, depreciation, amortization and impairment (EBITDA) and adjusted EBITDA

During the second quarter of fiscal 2021, EBITDA increased from $1.1 billion to $1.3 billion, an increase of 21.7% compared with the same quarter last year. Excluding the specific items shown in the table below, the adjusted EBITDA for the second quarter of fiscal 2021 increased by $223.5 million, or 20.9%, compared with the corresponding period of the previous fiscal year, mainly from higher road transportation fuel gross margins, organic growth on merchandise and service sales, as well as from the net positive impact from the translation of our Canadian and European operations into US dollars, partly offset by the negative impact of COVID-19 on our traffic. The variation in exchange rates had a net positive impact of approximately $11.0 million.

During the first half-year of fiscal 2021, EBITDA increased from $2.2 billion to $2.7 billion, an increase of 24.5% compared with the same period last year. Excluding the specific items shown in the table below from EBITDA of the first half-year of fiscal 2021 and of the first half-year of fiscal 2020, the adjusted EBITDA for the first half-year of fiscal 2021 increased by $543.9 million or 25.8% compared with the corresponding period of the previous fiscal year, mainly attributable to similar factors as those of the second quarter. The variation in exchange rates had a net negative impact of approximately $1.0 million.

It should be noted that EBITDA and adjusted EBITDA are not performance measures defined by IFRS, but we, as well as investors and analysts, consider that those performance measures facilitate the evaluation of our ongoing operations and our ability to generate cash flows to fund our cash requirements, including our capital expenditures program and payment of dividends. Note that our definition of these measures may differ from the one used by other public corporations.


12-week periods ended

24-week periods ended

(in millions of US dollars)

October 11, 2020

October 13, 2019

October 11, 2020

October 13, 2019

Net earnings including non-controlling interests, as reported

757.0

579.4

1,534.1

1,115.4

Add:





Income taxes

193.6

139.7

396.3

275.0

Net financial expenses

77.2

60.1

165.2

147.1

Depreciation, amortization and impairment

305.8

316.2

595.3

623.3

EBITDA

1,333.6

1,095.4

2,690.9

2,160.8

Adjusted for:





Gain on disposal of a property

(40.9)

(40.9)

Acquisition costs

1.2

0.8

5.1

1.0

EBITDA attributable to non-controlling interests

(25.8)

(50.6)

Adjusted EBITDA

1,293.9

1,070.4

2,655.1

2,111.2

Depreciation, amortization and impairment (“depreciation”)

For the second quarter of fiscal 2021, our depreciation expense decreased by $10.4 million compared with the second quarter of fiscal 2020. Excluding CAPL’s results, as well as the net negative impact from the translation of our Canadian and European operations into US dollars, the depreciation expense increased by approximately $10.0 million. This increase is mainly driven by the replacement of equipment and the ongoing improvement of our network.

For the first half-year of fiscal 2021, our depreciation expense decreased by $28.0 million compared with the corresponding period of fiscal 2020. Excluding CAPL’s results, as well as the net positive impact from the translation of our Canadian and European operations into US dollars, the depreciation expense increased by approximately $19.0 million for the first half-year of fiscal 2021, mainly attributable to similar factors as those of the second quarter.

Net financial expenses

Net financial expenses for the second quarter of fiscal 2021 were $77.2 million, an increase of $17.1 million compared with the second quarter of fiscal 2020. Excluding the items shown in the table below, net financial expenses for the second quarter of fiscal 2021 increased by $5.9 million compared to the second quarter of fiscal 2020, driven by a higher average cost of debt.

Net financial expenses for the first half-year of fiscal 2021 were $165.2 million, an increase of $18.1 million compared with the first half-year of fiscal 2020. Excluding the items shown in the table below, net financial expenses for the first half-year of fiscal 2021 increased by $6.3 million compared to corresponding period of fiscal 2020, driven by the same factor as the one of the second quarter.


12-week periods ended

24-week periods ended

(in millions of US dollars)

October 11, 2020

October 13, 2019

October 11, 2020

October 13, 2019

Net financial expenses, as reported

77.2

60.1

165.2

147.1

Adjusted for:





Net foreign exchange (loss) gain

(8.9)

11.8

(27.3)

5.3

CAPL’s financial expenses

(9.5)

(20.8)

Net financial expenses excluding items above

68.3

62.4

137.9

131.6

Income taxes

The income tax rate for the second quarter of fiscal 2021 was 20.4% compared with 19.4% for the corresponding period of fiscal 2020. Excluding the item shown in the table below, the income tax rate for the second quarter of fiscal 2020 would have been 19.5%.

The income tax rate for the first half-year of fiscal 2021 was 20.5% compared with 19.8% for the first half-year of fiscal 2020. Excluding the item shown in the table below, the income tax rate would have been 19.6% for the first half-year of fiscal 2020. The increase for both the second quarter and first half-year is mainly stemming from the impact of a different mix in our earnings across the various jurisdictions in which we operate.


12-week periods ended

24-week periods ended


October 11, 2020

October 13, 2019

October 11, 2020

October 13, 2019

Income tax rate, as reported

20.4%

19.4%

20.5%

19.8%

Adjusted for:





Income tax benefit (expense) following the December 2018 asset exchange agreement with CAPL

0.1%

(0.2)%

Net income tax rate excluding items above

20.4%

19.5%

20.5%

19.6%

Net earnings attributable to shareholders of the Corporation (“net earnings”) and adjusted net earnings attributable to shareholders of the Corporation (“adjusted net earnings”)

Net earnings for the second quarter of fiscal 2021 were $757.0 million, compared with $578.6 million for the second quarter of the previous fiscal year, an increase of $178.4 million or 30.8%. Diluted net earnings per share stood at $0.68, compared with $0.51 for the previous fiscal year. The translation of revenues and expenses from our Canadian and European operations into US dollars had a net positive impact of approximately $8.0 million on net earnings of the second quarter of fiscal 2021.

Excluding the items shown in the table below from net earnings of the second quarter of fiscal 2021 and fiscal 2020, adjusted net earnings for the second quarter of fiscal 2021 were approximately $735.0 million, compared with $569.0 million for the second quarter of fiscal 2020, an increase of $166.0 million, or 29.2%. Adjusted diluted net earnings per share were $0.66 for the second quarter of fiscal 2021, compared with $0.50 for the corresponding period of fiscal 2020, an increase of 32.0%.

For the first half-year of fiscal 2021, net earnings were $1.5 billion, compared with $1.1 billion for the first half-year of fiscal 2020, an increase of $416.7 million or 37.3%. Diluted net earnings per share stood at $1.38, compared with $0.99 for the previous fiscal year. The translation of revenues and expenses from our Canadian and European operations into US dollars had no significant impact on net earnings of the first half-year of fiscal 2021.

Excluding the items shown in the table below from net earnings of the first half-year of fiscal 2021 and fiscal 2020, adjusted net earnings for the first half-year of fiscal 2021 were approximately $1.5 billion, compared with $1.1 billion for the comparable period of the previous year, an increase of $413.0 million or 37.0%. Adjusted diluted net earnings per share were $1.37 for the first half-year of fiscal 2021, compared with $0.99 for the first half-year of fiscal 2020, an increase of 38.4%.

The table below reconciles reported net earnings to adjusted net earnings:


12-week periods ended

24-week periods ended

(in millions of US dollars)

October 11, 2020

October 13, 2019

October 11, 2020

October 13, 2019

Net earnings attributable to shareholders of the Corporation, as reported

757.0

578.6

1,534.1

1,117.4

Adjusted for:





Gain on disposal of a property

(40.9)

(40.9)

Net foreign exchange loss (gain)

8.9

(11.8)

27.3

(5.3)

Acquisition costs

1.2

0.8

5.1

1.0

Income tax (benefit) expense following the December 2018 asset exchange agreement with CAPL

(0.7)

2.7

Tax impact of the items above and rounding

8.8

2.1

4.4

1.2

Adjusted net earnings attributable to shareholders of the Corporation

735.0

569.0

1,530.0

1,117.0

It should be noted that adjusted net earnings and adjusted diluted net earnings per share are not performance measures defined by IFRS, but we, as well as investors and analysts, consider these measures useful for evaluating the underlying performance of our operations on a comparable basis. Note that our definition of these measures may differ from the one used by other public corporations.

Dividends

During its November 24, 2020 meeting, the Board of Directors approved an increase in the quarterly dividend of CA 1.75¢ per share, bringing it to CA 8.75¢ per share, an increase of 25.0%.

During the same meeting, the Board of Directors declared a quarterly dividend of CA 8.75¢ per share for the second quarter of fiscal 2021 to shareholders on record as at December 3, 2020, and approved its payment for December 17, 2020. This is an eligible dividend within the meaning of the Income Tax Act (Canada).

Profile

Couche-Tard is the leader in the Canadian convenience store industry. In the United States, it is the largest independent convenience store operator in terms of the number of company-operated stores. In Europe, Couche-Tard is a leader in convenience store and road transportation fuel retail in the Scandinavian countries (Norway, Sweden and Denmark), in the Baltic countries (Estonia, Latvia and Lithuania), as well as in Ireland, and has an important presence in Poland.

As of October 11, 2020, Couche-Tard’s network comprised 9,261 convenience stores throughout North America, including 8,085 stores with road transportation fuel dispensing. Its North American network consists of 18 business units, including 14 in the United States covering 47 states and 4 in Canada covering all 10 provinces. Approximately 109,000 people are employed throughout its network and at its service offices in North America.

In Europe, Couche-Tard operates a broad retail network across Scandinavia, Ireland, Poland, the Baltics and Russia through 10 business units. As of October 11, 2020, Couche-Tard’s network comprised 2,722 stores, the majority of which offer road transportation fuel and convenience products while the others are unmanned automated fuel stations which only offer road transportation fuel. Couche-Tard also offers other products, including aviation fuel and energy for stationary engines. Including employees at branded franchise stores, approximately 22,000 people work in its retail network, terminals and service offices across Europe.

In addition, under licensing agreements, more than 2,220 stores are operated under the Circle K banner in 15 other countries and territories (Cambodia, Egypt, Guam, Guatemala, Honduras, Hong Kong, Indonesia, Jamaica, Macau, Mexico, Mongolia, New Zealand, Saudi Arabia, the United Arab Emirates and Vietnam), which brings the worldwide total network to more than 14,200 stores.

For more information on Alimentation Couche-Tard Inc. or to consult its Unaudited Interim Condensed Consolidated Financial Statements and Management Discussion and Analysis, please visit: https://corpo.couche-tard.com/.

The statements set forth in this press release, which describes Couche-Tard’s objectives, projections, estimates, expectations or forecasts, may constitute forward-looking statements within the meaning of securities legislation. Positive or negative verbs such as “believe”, “can”, “shall”, “intend”, “expect”, “estimate”, “assume” and other related expressions are used to identify such statements. Couche-Tard would like to point out that, by their very nature, forward-looking statements involve risks and uncertainties such that its results, or the measures it adopts, could differ materially from those indicated in or underlying these statements, or could have an impact on the degree of realization of a particular projection. Major factors that may lead to a material difference between Couche-Tard’s actual results and the projections or expectations set forth in the forward-looking statements include the effects of the integration of acquired businesses and the ability to achieve projected synergies, uncertainty related to the duration and severity of the current COVID-19 pandemic, fluctuations in margins on motor fuel sales, competition in the convenience store and retail motor fuel industries, exchange rate variations, and such other risks as described in detail from time to time in the reports filed by Couche-Tard with securities authorities in Canada and the United States. Unless otherwise required by applicable securities laws, Couche-Tard disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking information in this release is based on information available as of the date of the release.

Webcast on November 25, 2020, at 8:00 A.M. (EST)

Couche-Tard invites analysts known to the Corporation to send their two questions to its management before 7:00 P.M. (EST) on November 24, 2020, at [email protected].

Financial analysts, investors, media and any individuals interested in listening to the webcast on Couche-Tard’s results, which will take place online on November 25, 2020, at 8:00 A.M. (EST) can do so by either accessing the Corporation’s website at https://corpo.couche-tard.com and by clicking in the “Investor Relations/Corporate presentations” section or by dialing 1-888-390-0549 or 1-416-764-8682, followed by the access code 70839272#.

Rebroadcast: For individuals who will not be able to listen to the live webcast, a recording of the webcast will be available on the Corporation’s website for a period of 90 days.

SOURCE Alimentation Couche-Tard Inc.

Related Links

http://corpo.couche-tard.com

Source: https://www.prnewswire.com:443/news-releases/alimentation-couche-tard-announces-its-results-for-its-second-quarter-of-fiscal-year-2021-301180140.html

Energy

Product roundup: Enphase, Panasonic, Con Edison, startups, and more

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Check out this week’s list of some of the newest announcements related to clean energy products.

This year kicked off with a slew of new clean energy products, and over the past week, the announcements kept on coming. To stay up to date on what’s new, check out this latest product roundup:

ConnectDER meter device

New York City-based utility Con Edison is offering, free of charge, a device that can save upwards of $1,000 for a residential customer installing a new solar array. The Smart ConnectDER, built by project partner ConnectDER, allows the customer to avoid the cost of upgrading the circuit breaker panel. It also eliminates the need for excessive electrical boxes on the side of the home.

The Smart ConnectDER is an adapter that uses the electric meter socket as a point of interconnection for solar power. It fits on most electric meters and works for solar arrays up to 15 kW. Con Edison provided 300 Smart ConnectDERs to customers during a 2019 pilot program and has received state funding to provide an additional 2,400 units. The utility said it plans to continue the program even after reaching that target. More info available here.

Separately, Virginia-based ConnectDER announced it received a U.S. patent for “innovations” to its products. More info available here.

e-Zinc raises cash to commercialize energy storage tech

e-Zinc, a Toronto-based startup, raised C$2.3 million ($1.8 million) in a closed round led by BDC Capital’s Cleantech Practice to help accelerate commercialization of the tech company’s long-duration energy storage solution.

According to e-Zinc, it developed a grid-scale solution that stores energy in physically free zinc metal, scales energy capacity at a fraction of the cost of lithium-ion batteries, and enables economical energy delivery over a period of multiple days. This latest financing adds to other equity rounds and government grants. The company plans to launch a pilot project in Ontario in May and has set its sights on entering the U.S. market. More info available here.

Panasonic expands products and installer program

Panasonic Corp. of North America recently promoted 13 installers across the U.S. to the Elite and Premium tiers of its Residential Solar Installer Program. Installers and homeowners will not only gain access to the Panasonic Solar Modules portfolio, but also receive access to the new high-efficiency Panasonic Solar EverVolt Modules, available beginning in February.

Homeowners in Arizona, Texas, Florida, Iowa, and Indiana will be able to access Panasonic’s solar products from seven Elite Level installers, who will be the first in Panasonic’s network to gain access to new products and rebates. Six additional installers in Florida, Texas, and New Mexico will also offer homeowners Panasonic’s benefits as new Premium Level installers. More info available here.

Enphase solar+storage product compatibility

California-based Enphase Energy said that its Enphase Storage systems are now compatible with Enphase M215 and M250 microinverter-based solar systems. According to the company, the expanded compatibility provides approximately 300,000 additional Enphase system owners with the possibility of achieving grid-agnostic energy resilience through the Enphase Upgrade Program.

Similarly, this new combo of solar and storage products, as well as previous compatibility with IQ 6 and IQ 7 microinverter-based systems, now allows U.S. installers to approach and offer storage upgrades to nearly the vast majority of Enphase homeowners nationwide. More info available here.

NeoVolta spreads storage distribution network

NeoVolta, a San Diego-based manufacturer of residential energy storage systems, has expanded its distribution network into Utah, adding to California, Nevada, and Arizona. Under a three-year agreement, PMP Energy is able to secure specific geographic exclusivities for distribution, in exchange for making minimum purchases of up to $15 million.

According to NeoVolta, its NV14 product features a storage capacity of 14.4 kWh and 7.7 kW of continuous power discharge. That capacity can be scaled up to 24 kWh with the optional NV24 add-on battery, without the expense of an additional inverter. NeoVolta systems are engineered with lithium iron phosphate chemistry. More info available here.

Rhombus nets certifications for EV remote charging dispenser

Rhombus Energy Solutions has landed certification by Underwriters Laboratory (UL) and the Consumer Electronics Testing and Certification Services Group (CSA) for its RES-D2-CS20 electric vehicle (EV) charging dispenser. The product is compatible with Rhombus’s UL-certified 60 kW and 125 kW power conditioning systems (PCS) for high-power EV charging of medium- and heavy-duty fleets.

Combined with the UL 1741-SA certification of Rhombus’ AC to DC PCS units, these certifications allow Rhombus solutions to be used in both unidirectional and bi-directional vehicle-to-grid applications, meaning fleet operators could use their EVs as a source of energy storage. More info available here.

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Source: https://pv-magazine-usa.com/2021/01/22/product-roundup-enphase-panasonic-con-edison-startups-and-more/

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Energy

Virginia aims to make installing energy storage easier

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The state is under a crunch to build out 3.1 GW of storage by 2035, but bills meant to remove lengthy regulatory approvals and ease the procurement of local permits are looking to alleviate the pressure.

Over the last two years, Virginia has made significant legislative strides in promoting the development of renewable resources, all in pursuit of achieving 100% clean energy by 2050, adding 16 GW of solar and onshore wind, building 3 GW of energy storage, and closing the state’s coal power plants by 2024.

In 2020, legislators changed state laws to allow solar and wind projects to be developed more smoothly and swiftly. Initially devised for smaller-scale wind projects and later extended to solar, Virginia’s permit by rule (PBR) program allows renewable generation projects under a certain threshold – 150 MW for now – to eschew the approval process overseen by the State Corporation Commission, which can be a lengthy affair.

This year, lawmakers are looking to do the same for energy storage.

Enter House Bill 2148, a measure introduced by State Delegate Rodney Willett, a Democrat from Henrico County. The bill looks to extend this same regulatory review avoidance to energy storage facilities and hybrid renewable + storage projects that meet similar parameters.

Willett has described the bill as the logical next step toward achieving the state’s clean economy goals and critical if Virginia hopes to get an unprecedented 3.1 GW of storage onto the grid by 2035.

And while projects still have a number of steps along development that can slow down or stall them, PBR has proven to be an effective policy for Virginia in recent history. More than 70 project developers filed notices of intent to apply for the program in 2020.

HB 2148 is not the only bill in the works in Virginia to make rolling out storage projects easier. One of the biggest headaches for developing solar in the state has been getting permits for projects (just ask the Spotsylvania developers).

This has been so historically difficult because, prior to 2020, renewable generation projects had certain state tax exemptions. Because of this, rural residents and legislators felt that they were being taken advantage of, as these projects would take up large swaths of land, provide little local revenue, and have the generation used outside of the local community.

This issue was partially remedied in 2020, when laws were passed that caused the tax exemptions to decrease over time, or local governments could instead opt for a revenue-sharing system where a $1,400/MW fee could be imposed on the project.

State Delegate Stephen Heretick, a Democrat from Portsmouth County, has introduced House Bill 2006, which would extend these same measures to energy storage projects.

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Source: https://pv-magazine-usa.com/2021/01/22/virginia-aims-to-make-installing-energy-storage-easier/

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Entergy Arkansas solar program slated to save $60m for local schools, other customers

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“From October to November, our energy bill went down by $2,700,” said Robby Lowe, superintendent of the Junction City School District.

Entergy Arkansas customers who joined the utility’s Solar Energy Purchase Option B program in fall 2020 have already begun to reap savings from the clean power generated at the 81 MW Stuttgart Solar Energy Center.

According to Entergy Arkansas, participating agencies are projected to save about $60 million over the lifetime of the solar facility.

Of the 61 subscribed customers, 26 are schools, which will save an estimated $39 million over the next 18 years. The remaining subscribed entities – including cities and counties, water treatment plants, churches, and nonprofits – will save nearly $21 million.

“From October to November, our energy bill went down by $2,700,” said Robby Lowe, superintendent of the Junction City School District.

The Jessieville School District is expected to save over $50,000 annually. Superintendent Melissa Speers said that extra money can now go toward more efforts to support students, including anything “from better science labs to more field trips.”

Owned and operated by NextEra, Stuttgart Solar came online in 2018 and is contracted exclusively to Entergy Arkansas. It was the first of three approved Entergy Arkansas solar facilities.

Half of the 81 MW project’s power is dedicated to tax-exempt subscribers under the Solar Energy Purchase Option program. The solar tariff was approved by the Arkansas Public Service Commission (PSC) in mid-September 2020, and customers were enrolled on a first-come, first-served basis.

Entergy Arkansas noted that all available energy is currently under contract, with more than 60 entities enrolled and at least that many on the waiting list for any future Solar Energy Purchase Options the PSC might authorize.

By participating in this program, customers are expected to save between 18% and 28% on their electricity costs, while still helping to support grid maintenance and lowering the cost shift incurred by all other customers without solar systems.

Michael Considine, Entergy Arkansas’ vice president of customer service, said this program is “especially helpful to tax-exempt customers who already have tight budgets.”

This content is protected by copyright and may not be reused. If you want to cooperate with us and would like to reuse some of our content, please contact: editors@pv-magazine.com.

Source: https://pv-magazine-usa.com/2021/01/22/entergy-arkansas-solar-program-slated-to-save-60m-for-local-schools-other-customers/

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Tampa Electric doubles its solar-powered homes goal

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The utility plans to power the equivalent of 200,000 homes with solar energy by 2023, and retire a coal plant 18 years ahead of schedule.

Tampa Electric achieved commercial operation on its tenth utility-scale  solar project, the 60 MW Durrance Solar project, located in Polk County, Florida.

By bringing that project live earlier this month, Tampa Electric now has enough solar capacity to power 100,000 homes, a benchmark that the utility had previously set as a procurement goal. Now, the utility has set a new goal of having enough solar capacity on-line by 2023 to power 200,000 homes.

Alongside doubling its solar reach in just two years, the utility is also looking to retire a coal unit, Big Bend Unit 3, in 2023, nearly two decades before the unit’s scheduled retirement. The move is seen as a money saving one as well as an environmentally-conscious decision, as continuing the unit’s operation past 2023 would require significant capital investments for improvements, a financial burden the utility has deemed unfair to ratepayers.

Big Bend 3 also marks the second Big Bend unit that is retiring. In November, Unit 2 will retire as part of the $850 million Big Bend Modernization project, an undertaking that will renovate the remaining Big Bend units to include combined-cycle natural gas units, capable of producing 1,090 MW of electricity.

Back on the solar side of things, the work to get to 200,000 is under way. Tampa Electric has begun construction on the next wave of 600 MW of solar, all of which will reach commercial operation by the end of 2023. Four projects with a combined capacity of 225 MW are scheduled to be completed by the end of 2021. When the entire 600 MW tranche is complete, Tampa Electric will have enough solar energy to reach its 200,000-homes goal.

This content is protected by copyright and may not be reused. If you want to cooperate with us and would like to reuse some of our content, please contact: editors@pv-magazine.com.

Source: https://pv-magazine-usa.com/2021/01/22/tampa-electric-doubles-its-solar-powered-homes-goal/

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