Pattern Energy Group recently announced its financial results for the second quarter of 2015.
Highlights
(Comparisons made between fiscal Q2 2015 and fiscal Q2 2014 results, unless otherwise noted)
- Cash available for distribution (CAFD) of $28.0 million, up 74%
- Adjusted EBITDA of $66.8 million, up 14%
- Proportional GWh sold of 1,202 GWh, up 56%
- Revenue of $84.7 million, up 30%
- Declared a third quarter dividend of $0.363 per Class A common share or $1.452 on an annualized basis, subsequent to the end of the period, representing a 3% increase over the previous quarter’s dividend
- Acquired remaining interests resulting in 100% ownership of the 283 MW Gulf Wind project, subsequent to the end of the period, and recapitalized the project by repaying the short maturity project debt with long term debt
- Increased owned capacity to 2,282 MW through five acquisitions, Lost Creek, Post Rock, Amazon Wind Farm (Fowler Ridge), K2, as well as, Gulf Wind
- Added 526 MW in owned capacity to the identified Right of First Offer (ROFO) list including the first five Japanese projects from Pattern Development’s relationship with GPI; the identified ROFO list stands at 1,270 MW of owned capacity
- Increased its CAFD per share compound annual growth rate (CAGR) target to 12-15% for the three-year period through 2017
- Established a 5,000 MW owned capacity target for YE 2019, representing a 119% increase in its current owned capacity
- Completed a $350 million capital raise consisting of a $225 million convertible note private placement and a $125 million common equity public offering, subsequent to the end of the period
“We have well exceeded our asset ownership, CAFD, CAFD per share and dividend targets outlined at the IPO. We have grown our portfolio of owned capacity by nearly 120 percent since the IPO, to 2,282 MW, our CAFD for Q2 was up 74 percent over last year and our dividend is up 16 percent since the IPO,” said Mike Garland, President and CEO of Pattern Energy. “At the same time, we continue to grow our identified ROFO list with Pattern Development, which now stands at 1,270 MW including the first group of projects from GPI in Japan. Given this visibility into our growth, during the quarter we increased our cash available for distribution per share CAGR target to 12-15 percent through 2017.”
Financial Results
Pattern Energy sold 1,201,940 MWh of electricity on a proportional basis in the second quarter of 2015 compared to 769,619 MWh sold in the same period in 2014. Pattern Energy sold 2,131,323 MWh of electricity on a proportional basis for the six months ended June 30, 2015 compared to 1,315,909 MWh sold in the same period in 2014. The increase during the quarterly period was primarily attributable to the commencement of commercial operations at Panhandle 1 and El Arrayán in June 2014 and Panhandle 2 in November 2014 and the acquisitions of Lost Creek and Post Rock in May 2015. Overall, production for the second quarter was impacted by low wind levels which resulted in a 10 percent variance in Pattern Energy’s production during the second quarter compared to its long-term forecast after adjusting for certain production losses, which were unrelated to wind and were compensated by contractual counterparties.
Net income was $5.7 million in the second quarter of 2015, which remained relatively unchanged compared to$7.2 million in the same period last year. Net loss was $16.4 million for the six months ended June 30, 2015compared to $14.7 million for the same period in 2014.
Adjusted EBITDA was $66.8 million for the second quarter of 2015 compared to $58.8 million in the same period last year. The increase was primarily attributable to the commencement of commercial operations at South Kent, Grand, Panhandle 1, Panhandle 2 and El Arrayán at various times in 2014 and the acquisitions of Lost Creek and Post Rock in May 2015.
Adjusted EBITDA was $113.6 million for the six months ended June 30, 2015 compared to $96.0 million in the same period last year. The increase was primarily attributable to the commencement of commercial operations and acquisitions referenced above. The Company also recorded a $5.4 million increase in energy derivative settlements at Gulf Wind during the first half of 2015 compared to the same period last year. These increases were partially offset by lower electricity production due to low wind levels. Reconciliations of Adjusted EBITDA to net income or loss determined in accordance with GAAP for both the quarterly and six month periods are shown below.
Cash available for distribution was $28.0 million in the second quarter of 2015 compared to $16.1 million in the same period last year. The increase is primarily attributable to electricity sales from the commencement of operations and acquisitions referenced above, as well as, a $7.8 million cash distribution from unconsolidated investments and a $1.9 million increase from energy derivative settlements. These increases were partially offset by increases in project expenses of $11.3 million, operating expenses of $2.8 million and interest expense of $3.1 million primarily from the commencement of operations at Panhandle 1, El Arrayán and Panhandle 2 and the Lost Creek and Post Rock acquisitions.
Cash available for distribution was $37.3 million for the six months ended June 30, 2015 compared to $33.9 million in the same period last year. The increase is primarily due to additional electricity sales from the commencement of commercial operations and acquisitions referenced above, a $13.8 million cash distribution from unconsolidated investments, and a $5.4 million increase from energy derivative settlements. These increases were partially offset by increases in project expenses of $20.5 million, operating expenses of $5.7 million, interest expense of $6.4 million and principal payments from operating cash of $3.3 million each of which are primarily due to the commencement of operations and acquisitions referenced above. Reconciliations of cash available for distribution to net cash provided by operating activities for both the quarterly and six month periods determined in accordance with GAAP are shown below.
Quarterly Dividend
On July 21, 2015, Pattern Energy declared an increased dividend for the third quarter 2015, payable onOctober 30, 2015, to holders of record on September 30, 2015, in the amount of $0.3630 per Class A share, which represents $1.452 on an annualized basis. This is a 3 percent increase from the second quarter 2015 dividend of $0.3520.
Construction Pipeline
The table below outlines Pattern Energy’s projects currently in construction, the capacity owned and each project’s anticipated commencement date for commercial operation.
Asset | Location | Owned MW | Commercial Operation |
Logan’s Gap | Texas | 164 | Q3 2015 |
Amazon Wind Farm(Fowler Ridge) | Indiana | 116 | Q4 2015 |
Total | 280 |
Third-party Acquisitions
In July 2015, Pattern Energy purchased the remaining 170 MW in the 283 MW Gulf Wind facility from MetLife Capital, Limited Partnership and Pattern Development. With the purchases, Pattern Energy now owns 100% of the membership interests in the Gulf Wind facility. Pattern Energy also prepaid 100% of the outstanding balance of the Gulf Wind facility’s term loan of approximately $154.1 million shortly after closing the two acquisitions.
In May 2015, Pattern Energy acquired an aggregate owned 270 MW interest in two operational wind power facilities from Wind Capital Group, LLC (“WCG”) and its affiliates. Pattern Energy acquired an interest in the 201 MW Post Rock Wind facility in Kansas, which is fully contracted under a long-term agreement with Westar, which has a BBB+ credit rating. Pattern Energy also acquired an interest in the 150 MW Lost Creek Wind facility inMissouri, which is fully contracted under a long-term agreement with Associated Electric Cooperative Incorporated, which has an AA credit rating.
Acquisition Pipeline
Pattern Energy has the Right of First Offer (ROFO) on a pipeline of acquisition opportunities from Pattern Development.
In the second quarter of 2015, Pattern Energy announced the addition of seven new projects to its list of identified ROFO projects from Pattern Development consisting of: the first five Japanese projects, representing 128 MW of wind and solar assets, from Pattern Development’s relationship with GPI; 398 MW of the 497 MW New Mexico / California project; and 43 MW of the 100 MW North Kent Wind project.
Pattern Energy
www.patternenergy.com/
Filed Under: News, Policy