Enefit Green interim report for Q2 2024
The Enefit Green group’s operating income for Q2 2024 decreased
by 7% while operating expenses (excl. D&A) decreased by 12%
compared to the same period last year. As a result, EBITDA
decreased by 2% to €19.3m. Net profit for the quarter increased by
€2.8m to €3.9m (earnings per share €0.015).
Andres Maasing, interim chairman of the
management board of Enefit Green comments:
"Construction activities are underway in
several development sites, including three large wind farms in
Estonia and Lithuania, with a total capacity of 422 megawatts.
Investments during the last quarter exceeded a tenth of our total
ongoing investment programme. The volume of investments required to
complete all ongoing constructions is close to €250m.
In the Sopi-Tootsi wind farm, 25 of the 38
wind turbines have been erected, and the installation of the
remaining turbines is proceeding as planned. In the solar farm,
which we are building in the close vicinity, installation of the
panel frames is about to be completed and the installation of the
panels is already ongoing. In Lithuania, in the Kelmė I wind farm
all 14 wind turbines have been erected, and turbine foundations are
being built in the Kelmė II wind farm. In Latvia, we are building
our first solar farms. We expect to start generating electricity in
all these projects later this year, except for the Kelmė II wind
farm, which will take longer to complete.
In the second quarter, we produced 358
gigawatt-hours of electricity (+35% y-o-y) and 96 gigawatt-hours of
thermal energy (-27%). The significant increase in electricity
production for several quarters in a row is due to the production
from both wind and solar farms already commissioned and from those
still under construction. During the last year and a half, a total
of eight new projects have started generating electricity, of which
five have been commissioned and three are nearing the end of
construction.
The contribution of new production assets in
our production portfolio is gradually growing, but the achievement
of the electricity production target has been primarily affected by
lower wind speeds and the configuration activities of new wind
farms (especially in the Tolpanvaara wind farm). The performance
indicators for the quarter were affected by lower market prices of
electricity and higher-than-expected output.
We continue to focus on completing ongoing
construction projects on time, maintaining high availability, and
working to bring storage and hydrogen technologies to
market."
Webinar to present the results of Q2
2024
Today, 1 August 2024 at 13.00 EEST Enefit Green
will host a Webinar in English to present and discuss its Q2 2024
results. To participate, please follow this link.
Significant events
-
The Supervisory Board of Enefit Green has appointed Juhan Aguraiuja
as the new Chairman of the Management Board. Mr Aguraiuja will take
office on 14 October
-
CFO Veiko Räim will not be applying for a new term as a member of
the Management Board after the end of the current contract on 24
September
-
Active construction activities in major Sopi-Tootsi (255 MW), Kelmė
I (80 MW), Kelmė II (87 MW) wind farms and Sopi solar farm (74
MW)
-
Commissioning of the Tolpanvaara wind farm (72 MW) in Finland
-
Amendment of the Swedbank loan agreement: increased loan amount to
€100m and extension of the term to December 2028
-
Purtse hybrid farm passed Elering's grid compliance tests
Key figures
|
Q2 2024 |
Q2 2023 |
Change |
Change % |
PRODUCTION AND SALES VOLUMES |
|
|
|
|
Electricity
production, GWh |
358 |
265 |
93 |
35% |
incl. new wind and solar farms |
141 |
56 |
85 |
152% |
incl. assets sold |
- |
9 |
(9) |
(100)% |
Electricity sales |
460 |
357 |
103 |
29% |
Heat energy
production, GWh |
96 |
141 |
(45) |
(32)% |
|
|
|
|
|
OPERATING INCOME, m€ |
38.3 |
41.2 |
(2.9) |
(7)% |
Sales revenue,
m€ |
33.9 |
36.8 |
(2.9) |
(8)% |
Renewable
energy support and other income, m€ |
4.4 |
4.4 |
0.0 |
(1)% |
EBITDA, m€ |
18.9 |
19.3 |
(0.4) |
(2)% |
NET
PROFIT, m€ |
3.9 |
1.1 |
2.8 |
246% |
EPS,
€ |
0.015 |
0.004 |
0.011 |
246% |
Sales revenue and other operating income
The group’s Q2 electricity production grew by 93
GWh (35%) to 358 GWh, with the output of new wind and solar farms
increasing by 85 GWh. Heat energy production decreased by 45
GWh (32%). The comparison of the group’s Q2 performance indicators
is strongly affected by the sale of the Brocēni CHP plant and
pellet factory, which was completed in Q4 2023, and the sale of the
Paide and Valka CHP plants, which was completed in March 2024
(‘assets sold’). Assets sold had a negative impact, reducing Q2
electricity and heat energy production by 9 GWh and 36 GWh
respectively compared to Q2 2023.
Electricity production in Q2 was about 61 GWh
lower compared to our earlier forecast. More than half of this
shortfall was driven by weaker than expected wind conditions, the
remainder was primarily driven by lower availability of wind farms
under construction and of Iru power station, but also by production
curtailments (related both to negative prices as well as those
ordered by DSO (in Poland)).
Total operating income decreased by €2.9m, the
figure reflecting a decrease in revenue of €2.9m, an increase in
renewable energy support of €0.6m and a decrease in other operating
income of €0.8m. The effect of assets sold on operating income was
positive at €4.7m in Q2 2023 and negative at €0.8m in Q2 2024.
Excluding the impact of assets sold, i.e.
operating income from continuing operations, was €36.5m for Q2 2023
and €39.1m for Q2 2024 (operating income grew by €2.5m, the figure
reflecting revenue growth of €1.7m and an increase in other
operating income of €0.8m).
Of the €1.7m growth in revenue from continuing
operations, €2.1m resulted from electricity sales revenue that was
driven by higher production. In Q2 2024, the average electricity
price in the group’s core markets was €72.2/MWh (Q2 2023:
€78.7/MWh). The group’s average implied captured electricity price
was €69.7/MWh (Q2 2023: €89.3/MWh). The implied captured
electricity price differs from the average market price in the
group’s core markets, because it takes into account long-term
fixed-price power purchase agreements (PPAs), renewable energy
support, purchases of balancing energy, electricity purchases from
the Nord Pool day-ahead and intraday markets and the fact that wind
farms do not produce the same amount of electricity every hour.
The group’s average price of electricity sold to
the market in Q2 2024 was €52.3/MWh (Q2 2023: €63.7/MWh). The group
sold 214 GWh of electricity to the market in Q2 2024 compared with
139 GWh a year earlier.
In Q2 2024, 246 GWh of the group’s electricity
production was covered by PPAs at an average price of €68.0/MWh. A
year earlier, 218 GWh of electricity was sold under PPAs at an
average price of €83.5/MWh. The average price of electricity sold
under PPAs has decreased significantly year on year because the
settlement periods of PPAs signed in Lithuania and Finland in 2021
at lower prices began in Q1 2024. The share and prices of
production covered by PPAs in future periods are disclosed in the
risk management chapter of the attached interim report.
In Q2 2024, we purchased 108 GWh of electricity
from the market at an average price of €80.4/MWh, compared with
97 GWh at an average price of €83.8/MWh in Q2 2023 (the prices
and volumes exclude the electricity purchased for pellet production
in Q2 2023). The volume of electricity purchased increased slightly
as sales under PPAs have increased, but as the share of production
covered by PPAs has decreased, the ratio of electricity purchased
to electricity produced decreased year on year. The purchase price
decreased compared to Q2 2023, because the market price has
declined, but due to a higher wind profile discount the gap between
the purchase price and the sales price increased.
In Lithuania, the Q2 wind profile discount increased by 4.4
percentage points year on year, rising to 13%. In Estonia, the
solar profile discount increased by 6.3 percentage points to 30.3%,
while the wind profile discount decreased by 1.6 percentage points
to 7.9% In 2024, we began to supply electricity under a PPA in
Finland, which is why we also started to purchase electricity in
Finland. In Finland, the wind profile discount in Q2 2024 was
26.6%.
Renewable energy support and other operating
income (excl. the effect of assets sold) increased by €0.8m
compared to the same period last year. Renewable energy support
increased by €0.7m. The amount of renewable energy support received
is based on the quantity of energy produced by wind farms eligible
for support. The eligibility period of the Purtse wind farm began
in Q2 2024, which increased the amount of support received by
€0.2m. The output of other wind farms eligible for support was 6.4
GWh higher than in Q2 2023.
EBITDA and segmental breakdown
The factor with the strongest impact on EBITDA
development was the price of electricity sold, which decreased
compared to Q2 2023 (negative impact: €5.4m). Due to PPAs, the
quantity of electricity sold grew significantly (positive impact:
€8.2m), which also increased the volume of electricity purchased to
balance the electricity portfolio (negative impact: €0.8m). The
combined effect of the above factors on EBITDA is influenced by the
volume and profile of electricity produced during the period.
The total impact of assets sold on EBITDA
development was negative at €1.6m. The figure consists of a
positive impact on Q2 2023 of €0.8m and a negative impact on Q2
2024 of €0.8m. The latter results from the correction of the gain
on the sale of the Paide and Valga CHP plants recognised in April.
For further information, see the financial results chapter of the
attached interim report.
The EBITDA of the Iru cogeneration plant excluding the effects
of the electricity price and volume decreased by €0.3m to €4.2m.
The calculation takes into account the effects of heat energy, gate
fees for waste received and technological fuel. The decrease was
mainly due to lower energy production resulting from lower
availability, which was partly offset by a rise in the price cap
for heat energy.
Based on total operating income and EBITDA, the
group’s largest segment is Wind energy, which accounted for 70% of
operating income and 80% of EBITDA for Q2 2024. The Cogeneration
segment contributed 22% to operating income and 28% to EBITDA. The
smallest reportable segment is Solar energy, which accounted for 8%
the group’s operating income and 11% of the group’s EBITDA for Q2
2024. The only reportable segment that delivered EBITDA growth was
Wind energy. This growth was driven by significant growth in
electricity generation. EBITDA of the Cogeneration segment declined
primarily due to the assets sold. EBITDA of the Solar energy
segment remained at last year’s level. More detailed information is
available in the attached interim report.
Net profit
Net profit increased by €2.8m to €3.9m compared
to the same period last year. The increase in net profit was mainly
driven by a decrease in income tax expense by €4.1m.
Capital Expenditures
The group invested €129.8m in Q2 2024, €55.3m
more than in Q2 2023. The growth was driven by development
investments, which amounted to €129.6m. Of this, €106.9m was
invested in the construction of three wind farms: €86.6m in the
Sopi-Tootsi wind farm and €20.4m in the Kelmė wind farms (€11.6m in
Kelmė I and €8.7m in Kelmė II). The largest development investment
in solar energy was made in the Sopi solar project at €7.4m. Base
investments remained at an insignificant level of €0.2m.
Financing
At 30 June 2024, the amortised cost of the
group’s interest-bearing liabilities amounted to €629.0m (31 March
2024: €503.2m). During the second quarter, the group drew down bank
loans of €125m. In addition, at the end of the second quarter, the
group increased the amount of a previously signed loan agreement
with Swedbank to €100m and extended the term of this loan until the
end of 2028. Investment loans raised but not drawn down at 30 June
2024 amounted to €235m. The average interest rate of bank loans
drawn down at 30 June 2024 was 4.23% (31 March 2024: 3.79%). The
net debt/EBITDA ratio stood at 5.52 at the end of the quarter (31
March 2024: 4.39). The increase in the ratio is due to a large
number of development projects under construction.
Condensed consolidated interim income
statement
€
thousand |
Q2 2024 |
Q2 2023 |
|
H1 2024 |
H1 2023 |
Revenue |
33,875 |
36,760 |
|
90,067 |
106,451 |
Renewable
energy support and other operating income |
4,377 |
4,406 |
|
17,106 |
12,219 |
Change in
inventories of finished goods and work in progress |
0 |
4,892 |
|
0 |
(168) |
Raw materials,
consumables and services used |
(13,910) |
(20,583) |
|
(34,584) |
(45,375) |
Payroll
expenses |
(2,363) |
(2,905) |
|
(4,588) |
(5,391) |
Depreciation,
amortisation and impairment |
(9,829) |
(9,707) |
|
(19,171) |
(19,522) |
Other
operating expenses |
(3,073) |
(3,274) |
|
(6,668) |
(7,329) |
OPERATING PROFIT |
9,077 |
9,589 |
|
42,162 |
40,885 |
Finance
income |
456 |
1,191 |
|
1,026 |
1,598 |
Finance
costs |
(436) |
(402) |
|
(742) |
(782) |
Net
finance income and costs |
20 |
789 |
|
284 |
816 |
Profit (loss)
from associates under the equity method |
(39) |
22 |
|
(49) |
41 |
PROFIT
BEFORE TAX |
9,058 |
10,400 |
|
42,397 |
41,742 |
Income tax
expense |
(5,117) |
(9,260) |
|
(5,010) |
(10,080) |
PROFIT
FOR THE PERIOD |
3,941 |
1,140 |
|
37,387 |
31,662 |
|
|
|
|
|
|
Basic
and diluted earnings per share |
|
|
|
|
|
Weighted
average number of shares, thousand |
264,276 |
264,276 |
|
264,276 |
264,276 |
Basic earnings
per share, € |
0.015 |
0.004 |
|
0.14 |
0.12 |
Diluted
earnings per share, € |
0.015 |
0.004 |
|
0.14 |
0.12 |
Condensed consolidated interim statement
of financial position
€ thousand |
30 June 2024 |
31 December 2023 |
ASSETS |
|
|
Non-current assets |
|
|
Property, plant and equipment |
1,250,517 |
1,027,057 |
Intangible assets |
59,808 |
59,891 |
Right-of-use assets |
8,651 |
9,097 |
Prepayments for non-current assets |
47,477 |
55,148 |
Deferred tax assets |
1,487 |
2,013 |
Investments in associates |
499 |
548 |
Derivative financial instruments |
5,772 |
5,054 |
Non-current receivables |
1,026 |
0 |
Total non-current assets |
1,375,237 |
1,158,808 |
|
|
|
Current assets |
|
|
Inventories |
5,425 |
3,180 |
Trade receivables |
6,207 |
8,618 |
Other receivables |
6,970 |
16,380 |
Prepayments |
13,098 |
30,084 |
Derivative financial instruments |
4,135 |
3,806 |
Cash and cash equivalents |
39,372 |
65,677 |
|
75,207 |
127,745 |
Assets classified as held for sale |
0 |
15,370 |
Total current assets |
75,207 |
143,115 |
Total assets |
1,450,444 |
1,301,923 |
€ thousand |
30 June 2024 |
31 December 2023 |
EQUITY |
|
|
Equity and reserves attributable to shareholders of the
parent |
|
|
Share capital |
264,276 |
264,276 |
Share premium |
60,351 |
60,351 |
Statutory capital reserve |
8,291 |
5,556 |
Other reserves |
166,296 |
163,451 |
Foreign currency translation reserve |
(103) |
(162) |
Retained earnings |
230,620 |
223,718 |
Total equity |
729,731 |
717,190 |
LIABILITIES |
|
|
Non-current liabilities |
|
|
Borrowings |
532,860 |
454,272 |
Government grants |
3,139 |
3,102 |
Non-derivative contract liability |
12,412 |
12,412 |
Deferred tax liabilities |
12,442 |
12,497 |
Other non-current liabilities |
5,239 |
5,239 |
Provisions |
7 |
8 |
Total non-current liabilities |
566,099 |
487,530 |
Current liabilities |
|
|
Borrowings |
96,100 |
32,126 |
Trade payables |
32,720 |
29,464 |
Other payables |
22,916 |
24,981 |
Provisions |
2 |
6 |
Non-derivative contract liability |
2,876 |
5,674 |
|
154,614 |
92,251 |
Liabilities directly associated with assets classified as held for
sale |
0 |
4,952 |
Total current liabilities |
154,614 |
97,203 |
Total liabilities |
720,713 |
584,733 |
Total equity and liabilities |
1,450,444 |
1,301,923 |
Further information:
Sven Kunsing
Head of Finance Communications
investor@enefitgreen.ee
https://enefitgreen.ee/en/investorile/
Enefit Green is one of the leading renewable energy
producers in the Baltic Sea area. The Company operates wind farms
in Estonia and Lithuania, waste-to-energy CHP plant in Estonia,
solar farms in Estonia and Poland and a hydroelectric plant in
Estonia. In addition, the Company is developing several wind and
solar farms in the mentioned countries, Latvia and Finland. As of
the end of 2023, the Company had a total installed electricity
production capacity of 515 MW and a total installed heat production
capacity of 50 MW. During 2023, the Company produced 1,343 GWh of
electricity, 604 GWh of heat energy and 156 thousand tonnes of wood
pellets. In the end of 2023, Enefit Green exited the biomass based
CHP and pellet production businesses.
- EGR1T interim report - Q2 2024 eng FINAL
- EGR1T_presentation_Q2_2024_eng