On August 1, 2024, HA Sustainable Infrastructure Capital Inc (HASI, Financial) released its 8-K filing detailing its financial performance for the second quarter of 2024. HA Sustainable Infrastructure Capital Inc is a climate investment firm that actively partners with clients to deploy real assets that facilitate the energy transition. It invests in behind-the-meter (BTM) building or facility-specific distributed energy projects, grid-connected (GC) renewable energy projects, and fuels, transport & nature projects.
Performance Overview
HA Sustainable Infrastructure Capital Inc (HASI, Financial) reported GAAP earnings per share (EPS) of $0.23 for Q2 2024, falling short of the analyst estimate of $0.37. However, the company posted adjusted EPS of $0.63, up from $0.53 in the same quarter last year. Revenue for the quarter came in at $95 million, surpassing the analyst estimate of $74.88 million and marking a 27% year-over-year increase from $74 million in Q2 2023.
Key Financial Achievements
During the second quarter, HASI achieved several significant milestones:
- Launched a new strategic partnership with KKR targeting co-investment of $2 billion over 18 months in sustainable infrastructure projects.
- Issued its first investment grade bond—$700 million of senior secured notes due 2034 with a coupon of 6.375%.
- Managed assets increased 21% year-over-year to $13.0 billion, and the portfolio grew 27% year-over-year to $6.2 billion.
Income Statement Highlights
| For the three months ended June 30, 2024 | For the three months ended June 30, 2023 | |
|---|---|---|
| GAAP Net Income | $26,540 (0.23 per share) | $13,522 (0.14 per share) |
| Adjusted Earnings | $73,683 (0.63 per share) | $53,146 (0.53 per share) |
Balance Sheet and Cash Flow
As of June 30, 2024, HASI reported cash and cash equivalents of $146 million and total debt outstanding of $4,113 million. The debt-to-equity ratio stood at 1.8x, within the target range of 1.5 to 2.0. The company’s weighted average interest cost was 5.6% in Q2 2024, compared to 4.8% in Q2 2023.
Investment Activity and Sustainability Impact
HASI closed new investments totaling approximately $260 million in Q2 2024, bringing total closed transactions to more than $820 million for the first half of 2024. The company’s portfolio remains well-diversified across established clean energy end markets, with significant investments in solar and wind power assets. These projects are generating more than 20 TWh of renewable energy annually, avoiding approximately 60,000 metric tons of carbon emissions each year.
Commentary and Outlook
“HASI achieved two major milestones in the second quarter of 2024: we inaugurated CCH1, our strategic partnership with KKR, and we received a second investment grade rating and priced our first investment grade bond,” said Jeffrey A. Lipson, president and CEO of HASI.
“We continue to see an attractive investment environment with greater than 10.5% yields on new portfolio investments and new cost of debt less than 6.5%,” said Marc Pangburn, Chief Financial Officer of HASI.
Analysis
Despite missing the analyst EPS estimate, HASI demonstrated robust revenue growth and significant strategic advancements. The company's ability to secure an investment grade rating and launch a substantial partnership with KKR underscores its strong position in the sustainable infrastructure sector. However, the increased interest expense and the shortfall in GAAP EPS highlight areas for potential improvement. Overall, HASI's performance reflects its commitment to driving the energy transition through strategic investments and partnerships.
Explore the complete 8-K earnings release (here) from HA Sustainable Infrastructure Capital Inc for further details.
