SunEdison Net Loss Outweighs Importance For Skittish Investors After Record Quarter & 1.9 GW Under Construction
SunEdison shares have plummeted after the world’s largest clean energy developer reports record growth, 1.9 GW of projects under construction, and the recent close of financing on a 300 MW wind farm in Texas.
Bloomberg Business has described analysts as “scratching their heads” in the wake of the biggest drop in SunEdison’s shares in almost 14 years. They quote Mahesh Sanganeria at RBC Capital Markets, who sent a note to clients on Thursday: “We have been receiving a lot of calls on today’s sell-off of SunEdison. We expected the stock to react positively.”
The company announced its second quarter earnings on Thursday, revealing a record 404 MW delivered in the quarter, versus guidance of 300 to 340 MW. SunEdison also has 1.9 GW of projects currently under construction, is up 1.1 GW quarter-over-quarter, has an 8.1 GW pipeline, a 5.6 GW backlog, and guidance for 2016 of between 4.2 to 4.5 GW. Net sales were up ($455 million) on both the previous quarter ($323 million) and a year earlier ($431 million), and the company’s first yieldco — TerraForm Power — has $65 million Q2 cash available for distribution, at $0.335 DPS.
However, it was the company’s $263 million net loss (attributable to shareholders) that appears to be the only takeaway from the company’s second quarter earnings, with shares plunging 25% at the close of trading — the company’s biggest decline since September 2001.
Reports are that investors are afraid of the net loss, which is in part due to the number of acquisitions the company has made over the past quarter. SunEdison acquired the India-based Continuum Wind Energy and the Central American Globeleq Mesoamerica Energy (GME). On top of that, SunEdison and TerraForm acquired a 521 MW wind energy portfolio from Atlantic Power, and a 930 MW wind energy portfolio from Invenergy. In the first quarter, the company announced the closure of SunEdison and TerraForm’s acquisition of First Wind.
This acquisition spree has apparently sent shivers through SunEdison investors, concerned at the net loss attributable to shareholders. However, Bloomberg Business spoke to SunEdison’s chief strategy officer, Julie Blunden, who said that the market may not recognize the benefit of investing so much revenue in future growth. “Earnings per share is not a good measure,” she said. “That will come back to the company over many years.”
SunEdison Closes Financing On 300 MW In Texas
At the same time as SunEdison announced its second quarter earnings, it also announced that it had closed financing on a 300 MW wind farm set to be developed in Floyd County, Texas. The 300 MW South Plains II wind farm will generate approximately 1,200 GWh of energy each year, providing the equivalent of enough electricity for 90,000 Texan homes, and avoiding the emission of 2 billion pounds of carbon dioxide.
“The South Plains II wind power facility will have a positive economic impact for the people of Texas,” said Paul Gaynor, SunEdison’s executive vice president of Americas and EMEA. “This is expected to become one of SunEdison’s largest wind projects, creating about 300 construction jobs and ensuring that thousands of Texans have access to clean, cost-effective electricity.”
SunEdison To Install 8 MW of Solar At 28 School Campuses In California
Following hot on the heels of that news was the announcement that SunEdison had signed a 20 year Power Purchase Agreement with the Rialto Unified School District in California for 8.4 MW of solar power to be installed above the parking lots of 28 schools in the district.
“The Rialto Unified School District is taking a financially savvy approach to control their energy costs,” said Sam Youneszadeh, SunEdison managing director of Western U.S. commercial and industrial. “The SunEdison solar canopies will generate clean, affordable energy while providing welcome shade for cars in the parking lot. SunEdison solar solutions are quick to deploy and bring our customers real, immediate energy savings for years to come.”
SunEdison is expecting the solar systems to generate a 20% savings on the Rialto Unified School District electricity bills, equating to savings of $1 million in the first year alone.
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