SunEdison to keep solar projects as it eyes long-term profits
(Reuters) - SunEdison Inc said it would stick to its strategy of keeping solar power projects rather than selling them in 2014, sacrificing revenue in favor of long-term profit.
The U.S. solar company's shares rose as much as 7 percent in early trading on the New York Stock Exchange on Wednesday.
SunEdison's strategy of keeping projects instead of selling them led to a larger loss in the fourth quarter ended December 31.
The company said it retained 127 megawatts of projects worth $260 million in the quarter, forgoing about $100 million in gross margin and creating about $160 million of value.
"The money in the retained value is so significant, I'm willing to print a negative (profit) number...," Chief Executive Ahmad Chatila said on a post-earnings call.
SunEdison's net loss widened to $286.4 million, or $1.07 per share, in the quarter from $11.8 million, or 5 cents per share, a year earlier.
The company plans to create a publicly listed company that will own and operate solar farms in long-term agreements with power producers, a move it says will guarantee stable cash flow and lower the cost of financing new projects.
"As these public vehicles are developed, we believe that we will be able to capture much of the value that we are giving up today," Chief Financial Officer Brian Wuebbels said on the call.
"So for 2014, you're going to see the sales be less and, therefore, I think the pressure on the margin in year one will be the most extensive," he said.
"As you grow back out of this, and as you get into 2015 and 2016, what you're going to see is that's going to start shifting."
SunEdison also plans to divest its semiconductor business, which makes wafers used in chips for computers, mobile phones and cars, as it focuses on its higher-margin solar farm business.
Sales fell 10 percent in the semiconductor business, which contributed about 37 percent to total revenue in the fourth quarter. The rest came from its solar energy unit.
Total revenue fell 8 percent to $551.2 million.
SunEdison shares lost some of their gains to trade up 2.3 percent at $15.53 in late morning trading.
(Reporting by Garima Goel in Bangalore; Editing by Maju Samuel and Ted Kerr)
