US distributed solar asset owner Spruce Power posted decreased revenues and EBITDA in Q4 2023, totalling US$15.7 million and US$9.9 million respectively.
Spruce said that the decrease was largely because of weather fluctuations, which affected its asset output. Q4 revenues were down around US$7.5 million from Q3 (US$23.3 million) and around US$2.5 million compared with the same period in 2022. Net loss attributable to stockholders was US$30.4 million for Q4 2023.
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Spruce closed 2023 with total cash of US$172.9 million, including cash and cash equivalents of US$141.4 million and restricted cash of US$31.6 million. This figure was down year-on-year due to cash outgoings for acquisitions and share buybacks over 2023, as well as unfolding legal proceedings around Spruce’s merger electric vehicle with XL Fleet.
In December 2022, electric vehicle solutions provider XL Fleet acquired Spruce Power for a total cash consideration of approximately US$58 million and the assumption of approximately US$542 million of debt. In October 2023, Spruce Power settled a legal case brought by the US Securities and Exchange Commission (SEC) relating to its merger with XL Fleet, after the SEC accused the company of “misleading revenue projections”.
The company paid US$11 million in a civil monetary penalty to close the case, and a second case is due to be decided on by the court in April 2024.
“Spruce’s strategy is to be the dominant owner and operator of distributed solar assets. We entered 2024 with an enviable level of cash liquidity to continue our disciplined growth,” said Christian Fong, Spruce Power CEO.
“And with most XL Fleet legacy matters behind us, we enter 2024 from a position of strength,” Fong continued.
In terms of operational metrics, Spruce added approximately 25,000 customers to its distributed solar portfolio in 2023, representing nearly 50% year-on-year growth. The company acquired 2,400 new US systems in August, and the uptick in ownership saw its revenues grow from Q1-Q3. It now owns around 75,000 home solar assets and contracts in the US.
The combined generation capacity of this portfolio was around 417,000MWh over the course of the year.
The company expects 2024 operating EBITDA in the range of US$68-86 million. In January, it launched Spruce Pro, a new brand extending the company’s reach into commercial solar. Initial capital expenditures for this new operation are expected to be “negligible”, Spruce said.
