NextEra Energy Partners LP (NEP) Reports Solid Q3 2023 Financial Results

• NextEra Energy Partners LP (NYSE:NEP) reported Q3 2023 net income of $53 million, adjusted EBITDA of $488 million, and cash available for distribution (CAFD) of $247 million.

• The company announced plans to repower approximately 740 megawatts of wind facilities by 2026.

• NEP increased limited partner distributions per unit at an annualized rate of 6% from its Q2 2023 distribution.

• The company continues its process to sell the Texas natural gas pipeline portfolio.

• Warning! GuruFocus has detected 11 Warning Signs with NEP.

NextEra Energy Partners LP (NYSE:NEP) released its Q3 2023 earnings on October 24, 2023, reporting a net income of $53 million. The company also reported an adjusted EBITDA of $488 million and cash available for distribution (CAFD) of $247 million.

Financial Performance and Future Plans

NextEra Energy Partners delivered solid adjusted EBITDA and CAFD results this quarter. The company remains focused on executing its transition plans and delivering limited partner distribution growth of 6% through at least 2026. NEP also announced plans to repower approximately 740 megawatts of wind facilities by 2026, which are projected to generate attractive CAFD yields as the company executes its growth plan.

Portfolio Sales and Wind Facilities Repowering

NextEra Energy Partners is continuing its process to sell the Texas natural gas pipeline portfolio. The company also announced plans to repower approximately 740 megawatts of wind facilities through 2026. The repowerings are projected to generate attractive CAFD yields, and the partnership expects to fund the repowerings with either tax equity or project-specific debt.

Quarterly Distribution Declaration

The board of directors of NextEra Energy Partners declared a quarterly distribution of $0.8675 per common unit, reflecting an annualized increase of 6% from its Q2 2023 distribution per common unit. The distribution will be payable on November 14, 2023, to unitholders of record as of November 6, 2023.

Outlook

From a base of its Q2 2023 distribution per common unit at an annualized rate of $3.42, NextEra Energy Partners continues to see 5% to 8% growth per year in limited partner distributions per unit, with a current target of 6% growth per year, as being a reasonable range of expectations through at least 2026. The partnership does not expect to require growth equity until 2027.

This article first appeared on GuruFocus.