NextEra Energy Partners shares fell almost 7% after the diversified energy company slashed its long-term growth forecast.
The company said Wednesday it was downwardly revising its limited partner distribution per unit growth rate to 5% to 8% per year through 2026, with a target growth rate of 6%.
The company had previously targeted a growth rate of 12% annually.
However, as NextEra CEO John Ketchum said: "Tighter monetary policy and higher interest rates obviously affect the financing needed to grow distributions at 12%, and the burden of financing this growth has had an impact on NextEra Energy Partners' unit price and yield.”
The company said by reducing its growth rate and executing its previously announced transition plans, which include the sale of natural gas pipelines, the company said it does not expect to require growth equity to meet its revised expectations until 2027.
It instead intends to focus on higher-yielding growth opportunities, such as organic repowerings in the short-to-medium term and reducing its new capital requirements, CEO Ketchum said.
This comes as the company on Tuesday evening announced its subsidiary Florida Power & Light Company has entered into an agreement to sell its natural gas business Florida City Gas to Chesapeake Utilities Corporation for $923 million in cash.
"This transaction allows us to continue our strategy of redeploying capital into our core businesses,” Ketchum said.
NextEra shares traded down 6.8% at US$60.92 in the early afternoon on Wednesday.
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