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TerraForm Power posts lower EBITDA, CAFD for Q3

Wind turbines in Illinois, USA. Author: Tom. License: Creative Commons. Attribution 2.0 Generic.

November 13 (Renewables Now) - TerraForm Power Inc (NASDAQ:TERP) last week reported adjusted EBITDA and CAFD for the third quarter of 2017 that are slightly lower than expected, largely because of an unusually weak wind resource during the period.

The US renewables yieldco, which is now controlled by Canada’s Brookfield Asset Management Inc (TSE:BAM.A), posted an 8.4% year-on-year decrease in adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) and a 26.5% decline in cash available for distribution (CAFD). The company said that the wind resource was around 20% below average for the quarter, which led to a 13% drop in total generation compared to the prior year. The solar resource was also about 5% below normal levels.

The table below gives more detail about the company’s performance in the third quarter and nine months through September 30, 2017.

in USD (unless otherwise noted) Q3 2017 Q3 2016 9-mo 2017 9-mo 2016
Generation (GWh) 1,378 1,582 5,315 5,504
Net profit (loss) (35m) (28m) (92m) (106m)
Earnings (loss) per share (0.31) (0.29) (0.62) (0.53)
Adjusted EBITDA (loss) 109m 119m 344m 369m
CAFD 25m 34m 92m 145m

The company said it aims at delivering a total return of some 12% to shareholders that "is sustainable over the long term". It plans to save USD 10 million in costs within the next year by streamlining its organisation structure, and targets an additional USD 15 million in cost savings over the next two to three years through reductions in operation and maintenance (O&M) expense.

TerraForm Power’s plan for the next few years also includes growth, both organically and through value-oriented acquisitions. The yieldco said it has identified a number of opportunities to invest in its fleet, including the repowering of several wind farms in the Northeast and Hawaii, and of distributed generation solar parks; site expansions; and potentially adding energy storage to existing plants.

When it comes to acquisitions, the company is currently evaluating a number of opportunities in its target markets of North America and Western Europe, it said, adding that it also has a right of first offer (ROFO) to acquire 3,500 MW of renewable power assets in those markets from Brookfield and its affiliates.

Earlier this month, TerraForm Power issued a USD-350-million term loan to repay an intermediate holdco loan. It noted that after this move there will no longer be any debt between its projects and corporate debt. Future acquisitions will be financed primarily using non-recourse debt with investment grade metrics.

(USD 1.0 = EUR 0.858)

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Ivan is the mergers and acquisitions expert in Renewables Now with a passion for big deals and ambitious capacity plans.

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