8point3 Energy Partners LP (NASDAQ: CAFD) today announced financial results for its first fiscal quarter ended February 28, 2017.
- Exceeded Q1 2017 revenue, net loss, Adjusted EBITDA and CAFD guidance
- Completed acquisition of minority stake in First Solar’s Stateline project
- Declared Q1 2017 distribution of $0.2565 per share, an increase of 3.0 percent over the Q4 2016 distribution
- Forecasts Q2 2017 distribution of $0.2642 per share, an increase of 3.0 percent compared to the Q1 2017 distribution
- 2017 financial guidance remains unchanged, reiterates fiscal year 2017 distribution growth of 12%
For the first quarter of fiscal 2017, 8point3 Energy Partners reported revenue of $9.9 million, net loss of $5.3 million, adjusted EBITDA of $13.1 million and cash available for distribution (CAFD) of $22.1 million.
“Our high-quality solar portfolio performed well as we exceeded our key financial metrics for the quarter while once again raising our quarterly distribution,” said Chuck Boynton, 8point3 Energy Partners CEO. “As of the end of February, our portfolio consisted of interests in 945-megawatts (MW) of U.S. solar generating assets including the recent acquisition of First Solar’s 34 percent minority interest in its 300-MW Stateline project. The Stateline project is expected to generate approximately $32 million in annual cash distributions and has a 20 year contract life. With this acquisition, our portfolio is now expected to generate annual CAFD of approximately $100 million in 2017.”
“We were pleased to achieve our financial goals for the quarter as we benefitted from the continued stable performance of our asset portfolio,” said Bryan Schumaker, 8point3 Energy Partners chief financial officer. “With the completion of our Stateline interest acquisition and the predictable cash flows from our other projects, we believe we will be able to reduce leverage and achieve our distribution growth rate target of 12 percent this year.”
Also, First Solar, one of the Partnership’s sponsors, has publicly announced and notified the general partner’s Board of Directors of its intention to explore alternatives related to its interests in the Partnership. Given First Solar’s intention, SunPower, the Partnership’s other sponsor, has likewise publicly announced and notified the general partner’s Board of Directors that it is exploring alternatives related to its interests in the Partnership, including but not limited to, seeking a potential new joint venture partner in the Partnership.
The sponsors have stated that they will engage financial advisors to review their alternatives with respect to their interests in the Partnership and that they intend to coordinate their review process. Although our sponsors have publicly announced their current intentions, there is no assurance that either or both of our sponsors will pursue or effect any particular alternative. The decision by the sponsors to consider their alternatives for their interests in the Partnership may result in interest from third parties about also acquiring the public ownership in the Partnership. In such event, the Partnership would refer any such proposal to the Conflicts Committee of the Board of Directors of the Partnership’s general partner for evaluation. The Partnership does not intend to disclose further developments with respect to this evaluation process except as required by law or otherwise deemed appropriate. The sponsor-appointed directors and officers of the general partner of the Partnership remain committed to prudently managing the partnership throughout this evaluation process.
“8point3’s strong operating performance over the last two years has shown that owning a portfolio of high-quality solar assets can successfully generate long-term, stable cash flow growth for investors. Despite the sponsors’ review of alternatives with respect to their interests in the Partnership, I want to assure our investors that we do not expect this process to have an impact on our financial results for the year. Given our cash flow profile, we are well positioned to achieve our guidance for the year as well as reach our 12 percent distribution growth rate for 2017,” concluded Boynton.
Additionally, the Conflicts Committee of the Board of Directors of the Partnership’s general partner has agreed to waive the negotiation period with respect to First Solar’s 179-MW Switch Station project, allowing for a potential third party sale. Also, First Solar has formally offered its 280-MW California Flats and 40-MW Cuyama projects, currently included in the Right of First Offer (ROFO) portfolio, to the Partnership. If the Partnership does not acquire these projects from First Solar, those projects are expected to be sold to third parties as permitted under our ROFO with First Solar.
The Board of Directors of the Partnership’s general partner also declared a cash distribution for its Class A shares of $0.2565 per share for the first quarter. The first quarter distribution will be paid on April 14, 2017 to shareholders of record as of April 4, 2017.
Additionally, the Partnership commenced a $125 million at-the-market (ATM) equity offering program during the quarter. The Partnership did not utilize the facility during the first quarter of 2017.
The Partnership’s second quarter 2017 guidance is as follows: revenue of $14.0 million to $16.0 million, net income of $3.0 million to $5.0 million, adjusted EBITDA of $24.0 million to $26.5 million, CAFD of $15.0 million to $17.5 million and a distribution of $0.2642 per share, a forecasted increase of 3.0 percent compared to the Q1 2017 distribution.
The Partnership’s fiscal year 2017 guidance remains unchanged: revenue of $63.3 million to $66.7 million, net income of $27.0 million to $32.6 million, Adjusted EBITDA of $106.5 million to $113.1 million and CAFD of $91.5 million to $101.0 million. The Partnership also expects a distribution growth rate of 12 percent for fiscal year 2017.