In an update to Monday’s story, Ecofin US Renewables says that it will likely be forced to cut its dividend following the loss of income from its Whirlwind project.
The tornado that hit Matador Texas on 21 June 2023 killed four people and injured 15 others, making it the deadliest Texan storm since 2015. The tornado also destroyed the substation that links Ecofin US Renewables’ Whirlwind wind farm to the local power grid.
The statement released today says that following a review of the recent performance of its assets, it now expects net cash flows at the portfolio level to be meaningfully lower than forecast for the quarters ending 30 June 2023 and 30 September 2023, with overall cash flows currently expected to return to forecast levels by the end of the calendar year.
The unavoidable hit to operation at Whirlwind is the major factor in this but the statement also cites corrective maintenance interruptions at some other solar assets leading to lower-than-expected energy performance, and one-time costs. The investment manager is doing what it can to resolve the situation.
The board says that it is conscious of the importance of dividend income to shareholders and it sounds as though it will look to see if it and the manager can work together to cut costs to improve net income. However, it expects to declare in early August a reduced dividend of not less than 0.70 cents per share in respect of the quarter ending 30 June 2023 (half the $1.40 quarterly payments that it was making).
[Unsurprisingly, the share price dived on Monday’s news and as of last night the trust was trading on a 40% discount or 56 cents per share. That would put it on a 10% yield when the full dividend is reinstated.]
RNEW : Temporary dividend cut at tornado-hit Ecofin US Renewables