NRG Yield buys more wind capacity, affirms 2017 forecast

Wind turbines at work. Author: Nick Cross. License: Creative Commons, Attribution-NoDerivs 2.0 Generic.

NRG Yield Inc (NYSE:NYLD.A) today said it has completed the acquisition of the 25% it did not already own in a wind portfolio of 814 net MW, and it also affirmed its full-year financial forecast.

The NRG Wind TE Holdco portfolio consists of 12 wind projects. The yieldco vehicle acquired the remaining 25% stake in it for USD 41.5 million (EUR 35m), excluding working capital adjustments, from its sponsor, US power producer NRG Energy Inc (NYSE:NRG). Additional payments may be due to the seller dependent on actual energy prices for merchant periods beginning in 2027.

The Drop Down deal, funded with available cash, is seen to add USD 4.6 million to cash available for distribution (CAFD) from 2018.

The effect of the acquisition is not expected to be felt in the current year so NRG Yield is reiterating its forecast for 2017 net profit of USD 140 million, adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of USD 920 million, and CAFD of USD 255 million.

Today the company also reported results for the first half of the year.

All in USD millions	H1 2017	H1 2016	Q2 2017	Q2 2016
Net profit	44	66	45	64
- of which Renewables	41	39	43	51
- of which Conventional	51	69	31	41
EBITDA	454	455	270	257
- of which Renewables	297	285	186	170
- of which Conventional	139	148	77	78

Renewables EBITDA improved thanks to the acquisition of NRG's stakes in utility-scale solar projects in Utah, while Conventional EBITDA fell because of outages at the Walnut Creek facility.

Renewables generation sold in the first half of 2017 amounted to 3,751 MWh, slightly down from 3,819 MWh a year before. In the second quarter there was a small improvement to 2,089 MWh from 2,041 MWh as increased wind resources in Texas and the East, compensated for lower wind resources in California.

NRG Yield announced a 3.7% quarterly dividend increase to USD 0.28 per share for the third quarter.

In July NRG Energy said it intended get rid of 50% to 100% of its interest in NRG Yield and its renewables platform as part of a newly-announced transformation plan.

(USD 1 = EUR 0.84)

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