The Risky And Safe Sides Of Atlantic Power Corporation
Summary
The company’s Power Purchase Agreements (PPAs) have a specific expiration date and fixed payment stream which ensures the security and stability of the cash flows without facing any commodity risk.
Management clearly stated in the annual report that the future dividends are not guaranteed.
Major debt refinancing in 2013 has reduced the company’s interest costs and has increased its financial flexibility.
Natural gas is the major power generation fuel used by the company. Its prices are continuously rising causing the company’s costs to increase.
The company’s legal proceedings are shattering investors’ confidence.