MPC Clean Energy profits in March

MPC Caribbean Clean Energy Limited, a regional investor in renewable energy, booked a profit of US$232,000 for the March quarter, which reversed losses of US$39,000 from the prior year, and added momentum to the earnings racked up in the past financial year.

The company, controlled by a German hedge fund, with the backing of Jamaican and Trinidadian pension funds, showed that clean energy can make money, despite the vicissitudes of nature and other challenges. Those challenges related to disruptions in wind, reductions in the sun’s irradiation, and equipment breakdown. During the quarter, two of its four operations surpassed budget, which was enough to generate profit.

The Paradise Park solar operation in Jamaica, in which it is a large investor, exceeded its first-quarter generation target by 0.44 per cent. Revenue surpassed budget by 2.3 per cent, driven not only by higher generation, but also increased energy prices.

With lower operating expenses and increased electricity sales, EBITDA, or earnings before interest, taxes, depreciation and amortisation, was around five per cent above forecast.

The Tilawind wind project in Costa Rica faced adverse weather conditions, particularly in March, leading to a significant 8.5 per cent generation shortfall due to lower wind speeds. Tilawind’s quarterly revenue was 7.9 per cent below budget, aligning with the shortfall in generation, while EBITDA closed at 7.2 per cent below target due to lower-than-expected performance and deferred maintenance expenses.

San Isidro solar operation in El Salvador experienced a 4.8 per cent generation deficit. Revenues were 4.8 per cent below forecast, paralleling the generation shortfall, while higher operating expenses led to a 7.4 per cent EBITDA decline.

Monte Plata I in the Dominican Republic exceeded its generation target by 1.1 per cent, driven by higher resource availability. Revenue and operating expenses remained close to budget, and was in line with projected EBIDTA. Plans for the execution of Monte Plata II and upgrades to Monte Plata I are under way.

MPC is a Caribbean-based investment company which was set up in 2017 to enable private and institutional investors to invest in clean energy generation. Its assets, which is almost entirely comprised of its investment in the MPC Caribbean Clean Energy Fund, totalled US$30.65 million in March.

The company books investment income once per year, in its December fourth quarter. In 2023, its total income was shy of $1.82 million, while profit topped US$1.58 million.

It’s typical for MPC Caribbean to make a loss in the first three quarters of each year, since it books no revenue from which its expenses can be offset.

For the March 2024 quarter, however, it bucked that trend, having booked unusual dividend income of more than US$265,000. The source of the dividend was not stated.

business@gleanerjm.com