In the advance of a potential purchase, TerraForm Global is trying to put its best foot forward. Today on a conference call related to its Q4 2015 and Q1 2016 results – the latter of which was published two days before Christmas – the yieldco played up its strengths in terms of its progress towards becoming an independent company, its operational successes, and its strong cash position.
However, there was no getting around one number: TerraForm Global expects continued losses in 2016 of $65-$115 million, against $210-220 million in revenue.
This is progress, as Global reported a whopping net loss of $371 million for the full year 2015, most of which was due to write-offs of the deposits of 425 MW of SunEdison India projects which were never transferred. However, it is clear that the company is still bleeding red ink.
And despite this red streak in the company’s financials is that Global is still in a very strong cash position, with $780 million in combined restricted and unrestricted cash. Global has also paid off its revolving debt facility, leaving it with $760 million in notes and $355 million in non-recourse project debt.
During the conference call Chief Financial Officer Rebecca Cranna dangled the option of using some of this cash could be used to pay off the bonds early reduce interest expense, thereby increasing cash available for distribution (CAFD). However, she also noted that such a decision would not be made before the “strategic option” – code for the potential sale of the company to a suitable bidder – was resolved.
Global executives also declined to give any guidance on dividend payments going forward, which is probably a wise move for a company which has issued a “going concern” warning due to the danger that it could be swept up in the ugly SunEdison bankruptcy process.
However, CEO Peter Blackmore and others kept positive about potential outcomes. On the call he noted that with its wind and solar projects in Brazil, India, China and other developing nations, TerraForm Global represents “A unique platform for future growth in some of the most attractive renewable energy markets in the world”.
And despite a new threat of de-listing due to the absence of a 2016 general meeting, investors appear to be cautiously optimistic. Global rose to $4.20 per share this afternoon, after hovering at or under $4 for the last few months, as part of a long-term trend of rising up from lows of just over $2 per share in April, when SunEdison went belly-up.