PNE AG
XETRA:PNE3
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
10.88
14.92
|
| Price Target |
|
We'll email you a reminder when the closing price reaches EUR.
Choose the stock you wish to monitor with a price alert.
This alert will be permanently deleted.
PNE AG
You don't have any saved screeners yet
Dear, ladies and gentlemen, welcome to the analyst conference call of PNE AG. At our customers' request, this conference will be recorded. [Operator Instructions] May I now hand you over to Markus Lesser, CEO, who will lead you for this conference. Please go ahead, sir.
Good morning, everyone. Also from my side, thank you for joining us today. This conference call on the results of the first quarter 2021. Before I start with the presentation, I would like to share with you an outline of the presentation and the procedures of today's call. As usual, I will start with an overview of the operational and strategic highlights of the first quarter 2021. After that, I will comment on our financial figures. I will conclude my presentation with our outlook for the remainder of the year. As always, we will then open the line for the sell-side analysts only. All other participants will stay in listen-only mode as it is our company procedure for years. As usual, our slides that I will use can be found on our Investor Relations website. Having said this, I would like to draw your attention to Slide 3. In operational terms, we have made a dynamic start to the 2021 fiscal year. Despite a still difficult general condition caused by the COVID-19 pandemic. The operational performance in Q1 was, again, clearly marked by the expansion of our power generation portfolio as well as the progress with our business expansion. Regarding the expansion of our own generation portfolio, we were able to complete 2 wind farms with around 17 megawatts and increase our portfolio to 151.6 megawatts. In addition, 5 wind farms with a nominal output of approximately 98 megawatts were under construction in Germany at the end of the first quarter. So in total, we talk about 156 megawatts under construction for -- if you consider the Polish projects of 59 megawatts as well for -- on our own balance sheet. Scale Up. We are still in implementation is fully on track. We could look and see new PPA -- and offer new PPA services and some special products bring it to the market. The PV pipeline expanded further to 674 megawatts. In last year, at the same time, we had 132 megawatts of peak in our portfolio. The numbers of employees has increased from 432 to 460. And looking at the financials on the next slide, I want to highlight, despite some negative impact from COVID-19 investments in our own generation portfolio and the weak weather conditions, the quarter 1 results are on target. Thus, we can confirm our guidance for the full year 2021. We have to consider that the investments in our own generation portfolio reflected in a non-realized earnings. In total, we have now 85 -- above EUR 85 million as a unrealized earnings to consider. It was added to EUR 6 million this quarter, another EUR 6 million has been added. We are still on a high cash level with EUR 94.1 million. Equity remains stable with EUR 201.4 million. Only to give you a short overview. In the last 11 years, the biggest, the best year in terms of EBITDA, the best first quarter have been at EUR 6.9 million. So we are not far away. If you look on the next, our own generation portfolio, we are -- as I said, we are working on 98 megawatts just right now in the construction, whereby 18-megawatt project is expected to start operation next year due to a lawsuit, which was filed against the building permission. But nevertheless, we talk about -- round about above 80 megawatts, which should be finalized this year. So that we come in total to a volume of above 230 megawatt -- close to 235 megawatts. So that means that we are still on target to come up and start operation -- have in operation 500 megawatts by 2023. Related to the pipeline, it is remarkable that we could increase the pipeline number in total again. In wind, onshore, it is now -- we are now on the level of 5,588 megawatts. It was in quarter 1 last year, 5,125 megawatts. And if you consider that we already finished Jasna projects and other projects, so -- which are not anymore in the pipeline, then it is remarkable. And again, we have the highest level of projects in permitting Phase 2 and Phase 3, of which are already permitted in Germany or France with 730 megawatts that are usually projects, which can be considered to be built in the next 2 to 3 years, latest. Remarkable in Germany was that the German EG was changed, in a positive way. And one point was that we could recognize that the tender in year 2022 will be extended from 2,900 megawatts to 4,000 megawatts. I think it's a remarkable and shows that the support from the German government is increasing. It is increasing as well as our pipeline. As you can see, we are now at 1,870 megawatts. In the first quarter, we have been at 1,664 megawatts in Germany. And in total, we are at 1.1 gigawatts -- close to 1.1 gigawatts in application for building permission in all our markets or where we have already building permission in place. In Germany, I spoke about 60 megawatts. We already -- close to 70 megawatts, we already finished our own portfolio. And the construction of project Erfurt Ost 5.5 gigawatts was completed. This was one project which was sold. We got new permits of about 30.2 -- 30.4 megawatts, which are now in application for the actual tender in Germany. Sweden, construction management for Malarberget is ongoing, and we -- the construction for wind farm Hultema was -- this project was sold in this quarter or to finalize the sale in this quarter. Poland, two projects total 59 megawatts are under construction. Looking to PV, we see that the that we have a significant growth. Three new markets, markets where we are already in. We could start our business in PV. So in France, Canada and Poland, with 90-megawatt peak, that could be added to our PV pipeline in the first quarter. So the first -- so we have a total pipeline of 674-megawatt peak. And this is again, growth -- strong growth to the last year and to the last -- to the end of the last year. Looking to the results. We have one -- the total output with EUR 49.4 million is the highest total output for the first quarter we ever had in the last -- or not ever in the last 10 years, I have to say, it was what we looked at. It's mainly related to the construction of our own portfolio. And look, you can see how much we invest in that. And again, one point, which is -- which we have to look at is the increased unrealized earnings. I mentioned it altogether already, EUR 6.0 Million versus EUR 6.1 million in quarter 1 '21. Remarkable is, all the time, we had a bad influence because of the interest rates debt now we have a positive effect due to the fact that the interest rates are increasing. So the financial results positively impacted by the valuation of interest rates by EUR 2.3 million. The performance across the business segments are again increasing and shows that we are on a good path. With one word or better worst thing is related to the activity generation because the power generation decreases to EUR 6.8 million. And this is related to the wind yields. So in a moment, we have a wind yield -- which shows a wind yield, which is 74% of the Euro 100% wind yield rate over the year in our portfolio. And this means that can only partly be compensated by the increase of the production capacities. So that means that the EBITDA decreases to minus 28%. But all other segments are on a good path. Project development output increases to EUR 47.9 million plus 131%. EBITDA increases to EUR 6.5 million in project development. The service output grows to EUR 4.9 million, plus 11%. EBITDA increases to EUR 1.7 million, also driven by international expansion. Now we get the first money back. So we are on a good path on this. And the wind will come back and we will see yields where we have more than 100%. We expected. So we will -- I hope that these numbers will become better in the future. If you look at the balance sheet, we have an increase from EUR 640 million to EUR 672 million, in total, the liquidity is still high on a high level. If you look and have in the background that it is really -- and you consider that this is really at a level that we are working on 156 megawatts, which we have under construction, then we have a very good cash position, having this in mind. The equity rate is still solid, 30%. As you know, we have non-recourse project financing of EUR 230 million on noncurrent debt and current liabilities of EUR 40.7 million. That means so that the whole -- most of the liabilities are related to non-recourse financing. And I think this is, again, remarkable. Scale Up, the implementation is progressing. There's nothing new on that. Just right now, we work on the expansion of our portfolio. We look for new products and services and look that we get that results, which we can see now. [indiscernible] projects we are working on look to market insurances, but this is really something what we will look at if we are -- have more the possibility to meet each other personally to step into markets on a MS Teams space is a little bit difficult. So nevertheless, our target is there, 500 megawatts in operation or start with established operation in 2023. We can confirm our outlook for 2021. So EBITDA of EUR 24 million to EUR 32 million. We are still in the plan. And the next step is what is ongoing is the next AGM, which is taking place next week, on Wednesday at a virtual general meeting due to the COVID-19 pandemic rules. And yes, we are ongoing with our projects. Tender volumes are increased in Germany et. We have a lot of projects around 329 megawatts under construction for us and for others. We have 98 megawatts under construction in Germany. So we are in plan to get our targets meet in the portfolio -- with our own portfolio. Pipeline is increasing despite the fact that we already finished bigger projects. PV is increasing. We have the highest volume of permitting phase project or permitted projects in Germany and France, which are -- which have -- which is a good situation because with our core business where we are on sale in U.S.A. Poland, Romania, South Africa, Panama, and we hope that we get most of these projects sold or finalized this year. So -- and we invest in our own generation portfolio and Scale Up. So never for, we are absolutely in plan in our targets. And thanks for your attention. We are now open for questions.
[Operator Instructions] And the first question we received is from Karsten Von Blumenthal, First Berlin Equity Research.
P&E has shown a very strong service EBIT much, much better than last year. And if I see the total output that was also increased from 4.9 -- from 4.4 to 4.9, but could you explain a bit in a bit more detail why EBIT was so much stronger. The margin also widened significantly that would be very interesting.
Yes, there are three points, which we have to consider: One is, first of all, we have more own projects. We could increase the project pipeline. Our own project pipeline, where you get additional orders. Secondly, we invested in the recent years in foreign countries, Poland, Sweden. Now the first results are coming back. So -- and third of all, we get additional business out of our PPA business, for example. So the services we are offering to the market are just right now paying back. So PPA business is increasing, business for special lighting systems for night solutions in Radar used based light solution. So this is our special offers we can do now and bring to the market.
So all in all, it is, on the one hand, internationalization and on the other hand, expanded service offering?
Yes. Yes, exactly. And last, but not least, I have to say that the corona effects are lowering down. Now we used to work, how we can do training together.
All right. So it's really very, very promising. And we now see that the decision to invest into services pays off. That is good to see. And my second question is regarding your PV business, your pipeline. You made a lot of progress there. And in one quarter, you entered 3 new markets: Canada, Poland and France. Could you perhaps elaborate on that why these markets -- how did you organize it? How did you get the projects there? What was your approach?
Yes. It's -- we have already organizations in these countries, like France, Canada and Poland, we are already in. So what we did, we always hired people who are used to work in business and extended their -- our offices in this respect our stuff there. And if you have in mind that in Poland is the next new market and you have always constrained in some regions because of wind, but PV is very seldom there, and we see an increasing market there. So you have the same situation as in Germany in terms of some effects yield. And on the other side, you have the landscape enough in Poland, which can be planned. So this is exactly a good situation. And I often think we are in the right time there. Canada is -- even if you don't believe it in the south of Canada, you have the same situation in Bavaria in terms of sun yield. And so therefore, it is -- we see there a market which is upcoming. And French, in any case, is a market where we have a bigger team and which we could extend and where we see a good development of the PV market, which is already ongoing, but we think that will increase furthermore.
Perfect. And you mentioned in the call that you plan to increase the on-plant portfolio to roughly 230-megawatt by the end of the year. Remember, in the last call, you were a bit more cautious. So obviously, things develop a bit better than -- during you mentioned in the last call. So 230-megawatt is now the target for your own plant portfolio at the end of this year?
Yes, we have always to wait the last time when I spoke, it was not clear if we get any lawsuits filed for any permission. So -- but we think it will be -- so what we want to have at minimum 230, maybe we get more. Yes. So -- but in any case, that should be our target. And what we can see now that the time for lawsuit are gone. So therefore, it is -- we can go ahead with our projects. And could order the machines. And so we are much safer now to give any prediction when we are ready or not.
Perfect. Happy to hear that. You mentioned in the call that in Germany, the overall tender volume for 2022 is significantly expanded from 2.9 gigawatts to 4.0 gigawatts. My question is tender expansion is, of course, fine, but do you think that the approval situation will also develop into a very good direction? Because in the last tenders, we were undersubscribed, so the largest tenders do not help if we don't have any permits in Germany.
Yes, we see a development there. And there is a political will to change this. And just right now, there are a lot of changes are in discussions and finalized, so that the permission procedure will be shortened. That we will have a look to the radar situation, which -- where you have special radar stations, where they will shorten the cycles around this, which have to be free of wind farms. So we have a lot of different issues which are happening just right now. So -- and we see improvement there. So we think that the megawatt numbers will increase, which will be permitted and can be built in the next time.
Perfect. Happy to hear that. One last question from my side. You did not take part in the first German wind and solar tender rounds in Q1?
No. No. But now in the second, with 30 megawatts online for your information.
So that -- okay. So that are the permits you just won?
Exactly. And we are -- we went -- we could get them immediately into the tender perfect.
The next question received is from Holger Steffen of SMC Research.
I have only one additional question. In your presentation, you have mentioned that you might sale the Panama project this year. But according to your report, you didn't start the sales process until now. I think COVID was a burden for the project development there. Maybe you can give us some more details about the actual development in Panama?
Yes. You're exactly right. The COVID pandemic hits Panama very heavily. So now the first -- now it starts to become a little bit lower in terms of restriction. For a long time, they had to stay at home, and had not to leave their flats, and this was real hindering us to step ahead in some licensing processes. Nevertheless, we think we are in a situation where we can finalize our project situation in the next couple -- in the next 1 or 2 months, and then we go into the sales process. We hope, yes. So this is really something which depends on how the COVID-19 pandemic will go ahead in Panama.
[Operator Instructions] And the next question received is from Jan Bauer of Warburg Research.
Just quick question. So you said you will participate in the tender with 30 megawatts but as far as I know, you received the permission for 46 megawatts. So there is a cap of 16 megawatts, right?
We got -- sorry, what did we get? I couldn't hear it. I couldn't get it.
Okay. And you received permission for 46 megawatts, but only participated in 30 megawatts in the tender?
No, no. We've got permissions for 30 megawatts, and these are all in the tender now.
What time do you expect those -- so if we assumed that you will be successful in the tender. So those projects are -- could start construction already this year or early next year?
Yes. The usual delivery time is 15 months for machines only, but we expect due to the fact that we -- on early stage, talked with the manufacturers and we think that end of the year, beginning of next year, we will have to find -- we can finalize this 30 megawatts as well. So that we -- at the year-end, we say minimum 230 megawatts in the first quarter next year, in any case, 260 megawatts, that is our plan. And maybe we get it fast.
Let's hope for that. But as far as I know there are some deliverance issues with Nordics for...
Yes. So just right now, there are a lot of delivery changes to expect there.
Okay. So you're saying you're in advanced sales process for projects in South Africa, Romania and also France. And could you give us a little bit more details about it. So can we expect the sale in each country this year? Or is this still, let's say, some high possibility that it won't work out?
Yes, it's always the situation that we have in some regions we have to finalize our projects in terms of permissions or licensees or something like this. But see, like Haga Haga is a project in South Africa, where we -- when the tenders came up and now we are in negotiations for sale. So therefore, this is a situation where we have to finalize the sale. So in Chilocco, in United States, we are working on heavily, and we are in negotiations with -- now we gave one exclusivity, and we hope that we can finalize this project and the sale of the project. In France, we have -- we already sold the projects which we have to finalize just right now. And it looks like that we can get it finalized. So therefore, this is in good shape. In Romania, we are negotiations of our wind portfolio, 152 megawatts and of one wind farm of -- a PV farm of 60 megawatts. So we are in, I would say, in a middle stage of sales process. And then we have the Polish project where we are in negotiations.
But the Polish projects, you're already under construction. So you will start commissioning right?
Exactly. We will -- but we are in sales process. And whenever we get it fixed, and we sell the project even if it is in under construction or finalized. It doesn't matter.
Okay. Perfect. Just one question regarding the wind portfolio. So what EBIT contribution you expect from your in-house portfolio for this year?
For the EBIT contribution, I cannot give you any answer on this -- in this moment because we have a lot of effects than we have to consider all our numbers due to the fact because we have different effects depending on when the projects come into operation, we have writing off issues. On the other side, we have EBIT margin coming in. So therefore, that's why we say all the time, EBITDA is our key indicator. Because otherwise, you can't get a true picture out of it with EBIT. So the expectation for EBITDA, so just right now, we have -- I can't tell you in detail because we give -- we will not give any segment guidance. This depends often on the wind application. If you see just right now, in the first quarter, the first project 16-megawatt they have had a chance only to work several weeks. So the EUR 6 million are mainly related to the 135 megawatts. So this is the only -- with a 74% wind year. So this is what I can tell you because -- and you should have in mind maybe that 70% of all income will be done during the winter months, October until March. So then you have -- maybe you can calculate it.
One last question regarding the service segment. Can you give us an idea of what's your target EBIT margin for the -- or target margin on EBIT or EBITDA level for your service segment on the long term?
Yes, we said all the time, 20% to 25%. This is what we want to look at that we get this margin level. Depends on all the time, which, if we take further acquisition into having into mind, we have always to consider that we have write-offs and all this different issues. And sometimes it makes sense to -- you need to get some synergy effects. But first of all, we are now in the expansion phase that means that we are a little bit lower, but in the future, this should be our target.
The next question received is from Peter Rothenaicher from Baader-Helvea.
I have some questions regarding the PV business. So you were quite successful in getting here a new project. What is your general policy regarding the project sales? On the one hand, when can we expect here that the first noteworthy project sales? On the other hand, what is your intention to bring these PV projects also further towards Phase III, Phase IV? So with construction or is more intention to sell them in a more early stage.
Yes, this depends on -- but the first thing, what we are saying, if we don't need and we get the nearly the same price level, which we will see when we tender the project. In every country, it might be a difference, then we want to make a project wise sale, yes. So sale started with finance and equity. They have to put only equity in and they can build. So this is our plan. But we will look in each country, it might be different, what's going to be paid here. So if the construction is going to be paid, then we need to have a deeper look on this. Then we look to the cash situation, and then we have to decide what we do. But at the moment, this is the plan.
And the first notes project sales, when do you expect here some profit?
Next year, we said, next year, we want to make the first project sales.
Okay. And one question regarding the expected compensation payments from this WindSeeG story. What is your general expectation? What magnitude of compensation could you expect? And when do you expect here to see some profit?
Yes, we are in -- we got a new WindSeeG and that showed that the compensation is -- or the studies we made and the work we made is not compensated in the right manner. And that's why we are now, again, working on -- or we now insist and make the application for the next procedure for the constitutional court. So we are in the process, again, only to -- because we say we don't accept that what is the rule in the WindSeeG. So therefore, we are fighting still for that to get a higher volume -- the higher amount.
So it may take some years again?
No, I don't think so. Maybe -- this is a procedure which already have taken place, so that the decision is there. It's only a matter if that what they have made in the Ministry of Economics is right. So this is not a complete procedure. It is a smaller procedure. I think somewhere end of this year, beginning of next year would be right. It is my estimation.
But anyhow, it's not part of your earnings guidance for the current year?
No, no.
[Operator Instructions] So as far as we received no further questions, I hand back to you, Mr. Lesser.
Yes. Ladies and gentlemen, thank you very much for your attention. And I wish you a good day. See you next time. Bye.
Ladies and gentlemen, thank you for your attendance. This call has been concluded. You may disconnect.