SunEdison, TerraForm Power report net losses, higher revenues

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The renewable energy giant, which has been busily filling its shopping basket with a host of global acquisitions, the latest being Vivint Solar (for $2.2 billion), has released its Q2 2015 financials, which contain no big surprises.

While there has been a recent selloff in both companies’ shares, on the back of the Vivint buyout and in light of the current fundraising environment, Deutsche Bank believes this is "overdone." In addition to a continuing positive yieldco market, the bank is confident enough funds can be raised to meet SunEdison’s 2016 guidance of 4.2 GW of project development.

Overall, SunEdison has a project pipeline totaling 8.1 GW, comprising 1.9 GW of projects under construction and a 5.6 GW backlog. It recorded 1 GW of gross pipeline additions this quarter. MW shipments exceeded its previous guidance of 300 to 340, at 404 MW in Q2. It has reconfirmed its guidance of 2.1 to 2.3 GW of shipments for the full year.

Q2 net loss of $263 million was reported by SunEdison, slightly down on the $372 million in Q1, but still significant when compared to the $41 million lost in Q2 2014 2014 (H1: $635 million, compared to $655 million in H1 2014). Of this, TerraForm Power comprised a Q2 net income of $29 million, up from a loss of $12.7 million in the previous quarter. The first half of the year, however, saw an overall loss of $54.5 million, way down on the loss of $17 million last year.

Revenues, meanwhile, were positive for both parties, with SunEdison reaping $455 million, up from $323 million in Q1 and $431 million in Q2 2014 (H1: $778 million, compared to $771 million in H1 2014); and TerraForm, $132 million, compared to $23 million in Q2 2014 (H1: 206.7 million, compared to $31.5 million in H1 2015).

At $173 million, SunEdison improved its Q2 operating loss, from $217 million in Q1 and $110 million in Q2 2014, but again saw H1 falling, with a loss of $390 million, down from the $172 million lost in the same period last year. TerraForm Power performed more positively, with an income of $39.7 million, up from $8.6 million in Q2 2014; and $27.7 million in H1, compared to $11 million in 2014.

With assets worth $17.6 billion in H1, compared to $11.5 billion in H1 2014; and liabilities worth $14.2 billion, compared to $10 billion, SunEdison has a very high asset to liability ratio of 81%. According to industry analyst, Paula Mints, a healthy ratio is below 50%. With $5.1 billion in assets (H1 2014: 3.7 billion) and $2.6 billion (H1 2014: 2.1 billion), TerraForm is reporting a more robust ratio.

"As of August 5, 2015, TerraForm Power had total liquidity of $1.3 billion, including unrestricted cash on hand of $665 million and a fully undrawn 5-year revolving credit facility. TerraForm Power received a commitment to increase the size of its revolving credit facility by $75 million, from $650 million to $725 million. Additionally, the Company amended the maximum permitted size of its revolving credit facility to $1.0 billion," said the company in a statement released.

In Q2, it acquired 146 MW of contracted solar power plants from SunEdison in the U.S. and U.K.