Sky Solar Posts Revenue Decline but Settlement in Hudson Case Sends Stock Higher
Solar park developer Sky Solar settled its lawsuit with a New York fund run by former Goldman Sachs & Co. partner, which impacted on its first half-year financial results.
Solar parks operator Sky Solar Holdings Ltd. (Nasdaq: SKYS) reported its first half-year results on Wednesday, seeing a revenue decline and losses, but its stock ended nearly 3% higher.
The Hong Kong-based company said in a statement on Wednesday that its revenue reached $25.9 million in the first six months through June, down 22% from the first half of 2018. Net loss was $13.9 million, or 26 cents per share, in contrast to net income of $8.2 million, or 16 cents per ADS, a year ago.
In response to the report, shares in Sky Solar slid to $1.54 apiece intraday but rebounded to $1.58 per American depositary share on Wednesday. Since Nov. 8, the ADS ratio in the company has been one ADS to 20 ordinary shares, according to the statement.
Last month, Sky Solar and Hudson Solar Cayman LP. have entered into a settlement agreement under which Sky Solar said it anticipates that it will be compensated for the former Uruguay subsidiaries based on the mutually agreed valuation.
The proceedings were launched in February by Hudson against the solar park developer. Hudson Sustainable Investments LLC is headed by Neil Auerbach, who co-founded the alternative energy investment business at Goldman. Sky Solar claimed in its earnings report that Hudson appropriated the shares of its five consolidated Uruguayan special purpose vehicle entities, despite its strong objection.
The removal of solar parks with 71.7 MW, megawatts of production capacity in Uruguay led to the period-over-period decrease in electricity sales. Its electricity sales hit $24.3 million in the first half-year, down 23% from the same period of 2018.
Sky Solar has been seeing some turbulence over the past few years. In 2017, an independent committee it has formed found that its former chief executive officer had transferred funds to companies he controlled and agreed to repay $15 million in damages.
More recently, in September, Sky Solar said it has received a warning letter from the Nasdaq for failing to trade at the minimum bid price.
Sky Solar operates 117.1 MW of solar parks in Asia, Europe and the Americas, including 16.9 MW of projects under construction as of June, comprised of 10.9 MW of projects in Japan and a 6 MW project in Chile.