SunEdison Performs Better than Guidance, Yet Sees Net Loss

SunEdison announced its financial results for the third quarter of 2015. Although the company delivered record amount of PV modules while increased its pipeline and backlog, the company saw net loss of US$328 million in 3Q15 and US$1,008 million in the first nine months of 2015. The company’s investment in its yieldco vehicles, TerraForm Power and TerraForm Global, could be part of the situation.

Quarterly Review:

SunEdison Development: Continued Organic Execution

• Record 640 MW delivered Q3 vs. guidance of 540-600 MW; up 343 MW year-over-year
• 2.9 GW of projects under construction, up 1.0 GW quarter-over-quarter
• 7.9 GW Pipeline and 5.5 GW Backlog, 0.4 GW of pipeline additions

Business Optimization: Reflection of Current Yieldco Conditions

• Streamlined organization and global footprint
• Opex improvements via economies of scale

TerraForm Power: Delivering Quarterly Execution

• $71 million Q3 cash available for distribution, up 9% quarter-over-quarter
• Raised dividend to $0.35 per share, $1.40 annualized

TerraForm Global: Operating Fleet of 677 MW at Quarter End

• $24 million Q3 cash available for distribution
• Dividend of $0.17 per share ($0.275 prorated for partial quarter, $1.10 annualized) 

The financial report shows that, quarterly, the net sale was US$476 million, compared to US$496 million in 3Q14. Gross profit hit US$111 million, higher than US$41 million in 3Q14, yet the operating expenses were too high so the operating loss reached US$250 million. As a result, SunEdison saw a net loss of US$328 million, in comparison with US$317 million in 3Q14.

SunEdison’s total assets doubled from last year. Operating activities and investing activities cost a large amount of money in SunEdison’s cash flow. Construction of renewable energy systems cost US$750 million in the third quarter, higher than US$376 million in the prior quarter. Furthermore, cash paid for acquisitions reached US$ 175 million quarterly, and US$2,356 million in the first nine months of 2015.

SunEdison acquired more than gigawatts of renewable assets this year for its two yieldco vehicles, hoping to earn profits from them for further development. However, the yieldco vehicles didn’t perform well enough to become profitable this year.

Nonetheless, SunEdison successfully secured several financial supports for the company’s operation and investment. “We made the difficult, but necessary decision to optimize our organization in the face of the current market conditions within the yieldco space,” commented Ahmad Chatila, CEO of SunEdison. “These changes will not only set up the business for long-term success, but also should position the development business to generate positive cash flow in mid-2016."

To read the full report: SunEdison Reports Third Quarter 2015 Results