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Avangrid faces lower renewables profits in Q4 2018

The 208-MW Wind Farm US East. Source: Iberdrola (www.iberdrola.com).

February 20 (Renewables Now) - The renewables division of Avangrid Inc (NYSE:AGR) booked a significant drop in net profit for the fourth quarter and full 2018 but enjoyed an increase in wind power generation in both periods.

Avangrid, part of Spain’s Iberdrola (BME:IBE), explained on Tuesday that the drop in profits as compared to the year-ago period reflects a USD-301-million (EUR 265.2m) benefit from tax reform measurements in 2017. The renewables division’s net profit in October-December 2018 came at USD 7 million, down from USD 218 million a year before. Earnings per share (EPS), respectively, declined to USD 0.02 from USD 0.70, while on an adjusted basis, they climbed to USD 0.12 from USD 0.02.

Тhe renewables unit benefited from improved wind power output from new capacity, income from project sales and the absence of an impairment of an equity method investment.

The segment closed 2018 with a net profit of USD 148 million, or USD 0.48 per share, representing a drop from USD 333 million, or USD 1.07 per share, in 2017. The adjusted result stands at USD 185 million, or USD 0.60 per share, up from USD 120 million, 0.39 per share, in the previous year. The division's performance was enhanced by a settlement income related to a counterparty bankruptcy proceeding, the recovery of bad debt and revenues from a disputed contract and transmission rights sale.

The table below contains details about Avangrid’s profits across its divisions.

GAAP Net profit (loss) in USD million Q4 2018 Q4 2017 2018 2017
Renewables 7 218 148 333
Networks 103 124 478 496
Corporate 8 53 12 (60)
Gas storage 1 (472) (19) (508)
Total GAAP 119 (77) 595 381
Total non-GAAP /adjusted/ 173 188 684 682

“2018 was an excellent year for Avangrid in terms of executing on our strategic plan, but challenging from an earnings perspective,” said CEO James P Torgerson. He noted, however, that the company’s performance was negatively affected by storm-related impacts, lower-than-expected wind resource and transmission-related issues at two new wind farms.

Avangrid confirmed that the development of the 800-MW Vineyard wind project off Massachusetts, in which it partners with Copenhagen Infrastructure Partners (CIP), is on track and all needed approvals are expected to be obtained late this year.

Last week, the Vineyard Wind partnership also took part in New York state’s solicitation of offshore wind project proposals with a scheme called Liberty Wind and three options of 400 MW, 800 MW and 1,200 MW.

(USD 1.0 = EUR 0.881)

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Veselina Petrova is one of SeeNews Renewables most experienced green energy writers. For several years she has been keeping track of game-changing events both large and small projects and across the globe.

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