8point3 keeps conservative approach and beats guidance during Q4

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Today 8point3 Energy Partners released results for its fourth quarter of 2015, which ended on November 30. Despite a loss of US$8.6 million on its balance sheet, the company achieved $16.3 million in cash available for distribution (CAFD), and paid a dividend of $0.217 per share.

8point3’s operational results were likewise strong. During the quarter 131 MW-AC of the company’s assets achieved commercial operation, including the 108 MW-AC Quinto project. This brings 8point3 to 432 MW-AC of operational assets.

8point3 expects these projects to generate $70 million in annual CAFD, over an average contract length of 22 years.

This is in contrast to the company’s stock performance, which remains well below its IPO price at only $14.73 in closing. This is hardly unique; energy stocks fall on low oil prices, the entire market has been down since late December, and a number of yieldcos have performed worse than 8point3.

Today the company also announced that it has acquired a 20 MW-AC solar project through its first drop-down from SunPower. The project consists of carport PV systems at 27 locations of the Kern County School District. When completed later this year this will add another $2.7 million in annual CAFD.

8point3’s acquisition of projects appears both deliberate and slower than that of other leading yieldcos. The company has 1.1 GW of right-of-first-offer projects from its sponsors, and CEO Chuck Boynton says that he expects the company to make all of its planned acquisitions with available liquidity, without having to borrow any more money.

8point3 reports $233 million in liquidity at the end of the quarter, including $57 million in cash and $151 million in a revolving credit facility.

The company plans for $80 million in annual CAFD, and for distribution to grow 12-15% annually. For the first quarter of 2016, 8point3 expects a slight dip in CAFD to $14.5-$15.5 million, but for dividends to increase to $0.224 per share.

As is the case with the entire U.S. solar industry, the recent extension of the federal Investment Tax Credit (ITC) is boosting 8point3’s outlook. Chief Financial Officer Mark Widmar notes that “The sponsor’s pipelines should increase significantly both in quality and size” due to ITC extension.

8point3 is also not looking to acquire projects outside the sponsor’s pipelines at this time, emphasizing the quality of assets available.