Leidos provides update of Conn. bioenergy plant in Q3 results

By Erin Voegele | December 04, 2014

Leidos Holdings Inc., the owner of the 37.5 MW Plainfield Renewable Energy biomass plant in Connecticut, has released financial results for the third quarter of fiscal year 2015, which ended Oct. 31. The company reported operating losses due to power generation shortfalls at the Plainfield facility.

Leidos first announced plans to assume ownership of the facility in late 2013. The plant, originally owned by a subsidiary of Enova Energy Group, was constructed by Leidos Constructors. According to information released by Leidos last year, the company, acting in its capacity as a secured lender, pursued a consensual foreclosure to assume ownership of the project. Leidos announced the plant became commercially operational in January 2014.

During the company’s third quarter investor call, Mark Sopp, chief financial officer of Leidos, indicated the company incurred a $3 million impairment during the quarter for intangible assets associated with fuel supply contracts for the biomass plant. The facility generated $6 million in operating losses during the three-month period, he continued.

Leidos CEO Roger Krone added that the Plainfield plant had significant periods of downtime during the second quarter. The company took advantage of that downtime to make some investments to improve the plant. Although a mechanical failure was experienced during the third quarter, he said the facility has recovered from that incident and, performance-wise, is off to a good start for the fourth quarter. Krone also said the company hopes to monetize the plant asset as soon as possible, and explained during the call that owning an operating a biomass plant is not part of the company’s long-term vision.

Overall, Leidos reported revenues of $1.28 billion for the quarter, down 10 percent from $1.41 billion during the same period of 2014. Operating income was $72 million, up from a $5 million operating loss during the third quarter of the previous year. The company’s operations are primarily in the national security and health and engineering sectors.