TerraForm Power Inc (NASDAQ:TERP), the renewable power producer with 3.74 GW of wind and solar assets, has narrowed its first-quarter (Q1) net loss to USD 36 million (EUR 32m) in 2019 from USD 76 million a year earlier.
The company generated cash available for distribution (CAFD) of USD 44 million, up from USD 23 million a year ago.
Adjusted revenues stood at USD 242 million for the quarter, up by 74% year-on-year, while adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) nearly doubled to USD 178 million. The improvement came mainly due to the acquisition of fellow renewables yieldco Saeta Yield, higher availability in the wind fleet, and contribution from margin enhancement initiatives.
The margin enhancement initiatives include new operation and maintenance (O&M) contracts that would reduce operating costs and increase revenues, and the negotiation of long-term service agreement (LTSAs).
“During the first quarter of 2019, we made significant progress completing our margin enhancement initiatives, which we expect will cover approximately 75% of the growth required to achieve our 5% to 8% annual dividend increase target through 2022 with a payout ratio of 80% to 85% of CAFD,” said CEO John Stinebaugh.
TerraForm Power, controlled by Canada’s Brookfield Asset Management Inc (TSE:BAM.A), will distribute a Q2 dividend of USD 0.2014 per Class A share on June 17.
The company currently has 2.4 GW of wind and 1.35 GW of solar assets. This includes 1.54 GW of US wind and 911 MW of US solar capacity. Its other markets are Spain, Portugal, Chile, Canada, Uruguay and the UK. In the first quarter of 2019, total power generation rose to 2,399 GWh from 1,834 GWh a year earlier. TerraForm Power explained that strong wholesale market prices in Europe more than offset the below-normal resource and brought results that exceeded expectations. These compensated for a decline in North America, where performance was hit by below average wind and solar resource, and icing and blade repair work.