PNE AG
XETRA:PNE3
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PNE AG
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Dear ladies and gentlemen, welcome to the 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 through this conference. Please go ahead.
Good morning, everyone, also from my side. Thank you for joining us today in this conference call on the results of the first half 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 half 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's 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 had a dynamic first half year in 2021 fiscal year. Despite the still difficult general conditions caused by the COVID-19 pandemic, the operating performance in H1 was still highlighted by project sales of 294 megawatts in Sweden, Romania and France. In total, we have 621 -- 620.1 megawatts sold, put into operation or under construction at the end of H1. What is remarkable is that we could increase our wind and PV pipelines by above 1 gigawatt year-over-year despite the project sales. Regarding the extension of our own generation portfolio, we were able to complete 2 wind farms with around 17 megawatts and increased our portfolio to 151.6 megawatts. In addition, 7 wind farms with a nominal output of approximately 120 megawatts were under construction in Germany at the end of the first half. This is extraordinary, and the first time, if you look to the 128 megawatts we are having under construction in Germany and 59 megawatts in Poland. It is a huge amount. The first time that we have so much projects under construction. Looking at the financials, we have achieved strong results driven by the project sales. I want to highlight the extraordinary high level of total output of EUR 93.9 million, which is an increase of 20.9 -- 21.9% year-over-year looked at. EBITDA improved even stronger by 47.1% to EUR 13.3 million. I also want to highlight that these results were achieved despite significant investments in our own generation portfolio. And we have to consider the weak weather conditions that burdened our power generation. Thus, we can confirm our guidance for the full year 2021. On segment level, the project development and service segments showed strong growth before consolidation compared to last year. Power generation was burdened by very weak wind yields and some downtime of our Silbitz power plant, which was a regular downtime planned due to maintenance. We have still a high cash position, remains on a high level at EUR 116.9 million. The equity remained stable at EUR 197.8 million. Looking to the expansion of our generation portfolio, further 128 megawatts under construction. This, together with this 150.6 megawatts, shows that we increased our portfolio in a very strong way. We have to consider that the hidden reserves in the portfolio are now more than EUR 100 million in total. Looking to this together with the -- and with the equity, I think this gives a very good overview about the strength of our company. If you look to the project pipeline, we have more than 1.1 gigawatt in the permitting phase. The total pipeline grows to above 500 megawatts despite the project sales we had with the big projects of Jasna and Malarberget. We are on the highest level of projects in permitting phase in our core markets, Germany and France, with 773 megawatts despite this 120 megawatts we have already under construction. So the German pipeline increased by 200 megawatts -- around 200 megawatts, and we could finalize some constructions and projects, construction of Project Erfurt Ost, Project Langstedt and Lentföhrden completed. The construct -- start the construction of 30.4 megawatts, and remarkable is that we got another 54.9 megawatts new permitted projects in the last 2 weeks, which now will be part of the next tender in September. Sweden construction management of Malarberget, 130 megawatts was completed. The construction and the sale of wind farm, Hultema, could be finalized. In Poland, the projects of Krzecin and Kuslin are now ongoing. In France, we could sell 13.8 megawatt projects. We could finalize the sale in France, 2 projects in total, of around 70 megawatts got permitted. And in Romania, 220 megawatts were sold. So you see a lot of action in our company in sales and construction, which can be shown by these numbers -- which is shown by these numbers. We have a rapid growth of PV projects. So also, we could add additional France, Canada and Poland with 90-megawatt peak. In total, our pipeline increased by more than 500 megawatts to 794-megawatt peak, which shows our strong willing to increase our pipeline and to get PV in the market, established where we are already in because there we see a lot of synergy effect, which is shown now through the strong increase of our pipeline. If you look to the H1 results, 29% increase of the total output, which shows that we do a lot of -- even if we do it internally, the sales is not the number we are looking at due to the fact that we build up so heavily our internal portfolio. So it's more the total output, which shows the strength of our work and our success. And we can see that the EBITDA is up by 47.1%. If you summarize it, project sales in Sweden and Romania, France; internal sales related to the buildup of own generation portfolio; milestone payments for projects, which had only already sold; and the project development and general contractor services; as well as the results for the power generation services and the expansion of our own power generation portfolio shows the valuing -- are valued in these numbers. One additional point due to the good -- the financial results have been positively impacted by the valuation of interest rate, plus EUR 3.5 million. You remember a long time, we had to change this swap and consider the swaps in a negative way. Now we have it in a positive way due to the fact that the interest rates are increasing. Remarkable are the numbers if you look to the segments each. The project development output increases to EUR 90.86 million, which is close to 46% in opposite to last year -- in relation to last year. The EBITDA increased by 260% to EUR 22.8 million. Services growth by plus 15%. The EBITDA plus 105%. So this shows that the action we have taken to become internationally and to increase our service business are now also can be seen in the numbers. Not very good point was that the wind yields have been very weak this winter time, especially. So in general, we have been very low at wind yields, which affected the power generation output. It decreases to EUR 11.6 million, minus 10%. As well as service had a maintenance downtime, which was regular maintenance downtime, this leads to an EBITDA, minus 20%, opposite to last year or in relation to last year. But this is usual, if the wind yield is weak on one hand, it will be higher on the other hand. At the end, our prognosis are always related to an average value. While the costs are all the time running in the same manner, linear through the year. The balance sheet is solid. We had an increase in the balance sheet due to the fact that we got more projects in our portfolio now. We are at EUR 731 million, total amount in opposite to EUR 663.8 million in last year. The liquidity is still high on a EUR 116.9 million. The equity, again, the equity is at EUR 197 million. The hidden reserve is EUR 100 million. Only this point, again, shows really the financial strength. Equity ratio is solid at 27.1%. Due to the change in the increase of the balance sheet, our equity ratio goes down, but we are still on the same level in terms of the equity for itself. In our current debt, liabilities to banks showed it is increasing, mainly project financing -- nonrecourse project financing and the liabilities from leasing contracts due to the fact that we got more projects in our ownership. It's clear that according to IFRS, we have to bring the leasing contracts into consideration, and this is increasing due to the fact that we have a lot of land lease contracts. The current liabilities to bank, EUR 29.3 million, nonrecourse again. And the liabilities from leasing contracts is EUR 6.4 million. Scale-up is ongoing, and we can see a lot of increase of efficiency due to the measurements we did in the past. So we are working on expansion of our own generation portfolio. We want to add further new product services, which we do now. We want to have a hybrid project power plants in our range of that what we would like to offer to the market or what we would take on board. This depends on -- and there we are in a good shape, but we will see when we get the first projects on board. We want to go in the next market. And we look for the further projects and what you can see in the increasing project development pipeline. 2023, we want to finalize or want to start -- I want to have 500 megawatts on board in our ownership of projects, which had been constructed or will be under construction. Yes. What is -- what are the targets for the next time? So first of all, think about this 128 megawatts, which are under construction for own generation portfolio. Secondly, we think that we can add some repowering projects, maybe on board, which are prepared for repowering. Additionally, we can add 54.9 megawatts where we got already the building permits. So you see we are in a good shape to reach our target of 500-megawatt in 2023. We have 259 megawatts in construction that we would like to finalize. The regulatory environment is starting to begin better. We see a lot of sensibility in the politics to improve the targets, but also to improve the regulation so that permissions can be done in a faster and better way. So this -- especially in Germany, we have a very good outlook. We have a good pipeline, which is growing. And so -- and we have -- especially on the core markets, Germany and France, 73 megawatts in the permitting phase, which is in this total amount, extraordinary. We could -- we have the sale of different projects in United States, Poland and Panama, which we would target. We already sold last week, South Africa, 140 megawatts, our Haga project, which -- where we got a small first payment, but the main payment is related to the tender success and if it is going to be built. And we furthermore want to improve our organization and everything that has to do with processes which improve our effectiveness. So altogether, we can confirm our guidance for fiscal year 2021 with an EBITDA of EUR 24 million to EUR 32 million. We are very positive that we can reach this. So thank you very much. I'm prepared now for questions.
[Operator Instructions] And our first question comes from Jan Bauer, Warburg Research.
I only have 2 minor questions. Can you give us a little bit more light about the parks in Germany who are currently under construction? You said it's 128 megawatts. When I run through my notes, I only can find some 84 megawatts. And also a little bit of light regarding the expected COD of those parks. I would expect a few of them could be finished by the end of the year and another few in the first half of the next year.
Yes, to the 128 megawatts, there are 7 projects. These projects -- 2 projects we could get through the tender with 30.6 megawatts. If you look to your numbers, you have to add them from the last call. So we are altogether at 128 megawatts. 1 project with around about 20 megawatts, 24 megawatts. We have delayed to expect due to issues around the permitting phase. All others, we expect to get finalized until mid of next year.
Okay. Perfect. And the second question would be about the French pipeline. So just from my feeling, so you already sold 1 project. You have several commissions granted for France. So is this market finally picking up as expected? And can you see there any developments regarding the permitting phases? Or is it still very difficult [ offshore wind ]?
Yes. In France, you have always the situation if you have your permission, you have to expect usually a procedure that somebody filed a lawsuit against this permission. Usually, you have to expect 2 years to add until you can be ready to build or you can build. So just right now, we have 2 projects, one with 11.7 megawatts and one with 6 gigawatts where we got the permission or we have the permission available. So -- and we think that the start of the construction will be, I would say, end of this year for one project and next year with the next project.
Okay. But those are the projects you already sold or are those additional projects?
No. No, these are additional projects.
Okay. So what's your expectation -- are those projects up for sale? Or will you probably add those ones also to your in-house portfolio?
In the moment, it is planned to sell them. But if we have -- we always consider on a regular basis if we would held them or not. So France is one market where we can think about to held them, but it is not already decided.
And our next question comes from Karsten Von Blumenthal, First Berlin Equity Research.
A question regarding turbine delivery time and pricing. Has this changed in Q2? What kind of development are you observing there?
Yes, it is -- we see just right now the development in longer delivery times. I mentioned this point on the last call, from 15 to 18 months. And we see that there is a pressure on prices, which will be part -- which are partly considered -- partly taken away from us in this respect that we think that the next generation of machines always are more efficient, yes? So therefore, we think that the prices will not lead us to -- will affect us much. Secondly, we think about this is usual that the tender prices will increase. So we don't see that this will affect us so much. But nevertheless, we would see just right now, we see the price pressure from the wind market.
Okay. When we look into the wholesale power price, this has been around EUR 70 per megawatt hour, so much, much higher than last year during the crisis. Do you think this could already be a level where PPAs for onshore wind in Germany become an option? And so far, we have only seen solar PPAs in Germany, but with a higher wholesale price level. It may start to be interesting also for onshore wind. I would like to know what your opinion is there.
Yes. I'm -- there is a real support for our strategy to win into PV. You mentioned this because the PV -- a lot of PV areas or sizes, it's up to 20 megawatts you can achieve for tender and EEG. Above that, you have to go for PPAs. And the pressure is higher than to go for PPAs. This gives us much more security for our pipeline in Germany because then -- so slowly steadily, at a special amount, some companies will think about how to hedge their prices -- energy prices due to the fact that this increase is going to be stable also in the future. So secondly, all projects, which are not anymore in a 20 years EEG frame will be supported through this, yes? So this is a good situation in some respect as well.
All right. You have again increased your PV project pipeline, and now almost 800 megawatts. Could you -- have you got an idea when you -- when and where you will build your first PV project?
Yes. Next year, we want to start the first construction -- the construction of the first or the sale. It depends on -- we just right now look with which these projects will come first. And depending on our strategy, which we will budget now in the autumn, we will see if we can take it on board or if we sell it.
And our next question comes from Holger Steffen, SMC Research.
Mr. Lesser, at the moment, you built several wind farms in Germany and Poland. Regarding this, I have expected a higher change in inventories in the second quarter. Why was this figure much, much lower than in the first 3 months?
This is due to the fact that the projects we have finalized -- that we could finalize in the second quarter, 17 megawatts is one issue. So they had to go out of the inventories. And we have to consider that the delivery times of wind turbines are longer. So this is -- this depends on if -- when we order and which payment we have to do and when they get in our inventory as an order.
Okay, I see. And in the first half, revenues were still relatively low. I think your revenues in the second half will be strong determined by a possible sale of the 2 new projects in Poland after completion. How probable is it that we will see the complete project cost? And at the same time, high revenues in your profit and loss statement?
It is -- the probability is very high. I can tell you...
Probably too much higher revenue?
We expect really in the next couple of 2 months to get the sale finalized of Poland and therefore, that we get the revenues and also the results now and that we can see it in our balance sheet.
We will see much, much higher revenues there because you have built these projects already then?
Exactly.
Okay. If we take a look at the data of Germany of the first half. You've made great progress in the further development of the German onshore pipeline. Maybe you could give us an outlook about the next quarters. Will you maintain this, the high speed?
Yes, you see just right now, take into consideration that we -- 128 megawatts we have under construction. We made first payments. We have to make further payments, as you said, already for wind turbines. On the other hand, we see that we can start this year with a further 55 megawatts roundabout. So we see the next step of projects, which are upcoming. So therefore, we have a -- this is the outlook in this respect. Additionally, the project sales, we expect maybe in -- we try to get it done in the United States and in Panama, it's more difficult is, certainly, in the moment, but nevertheless we also -- the milestones for the other ones for the other projects are related mainly to construction -- start of construction with our -- in Romania and South Africa more in 2 years to expect, not in the short run.
Okay. But I think we -- for the next quarters, we will see high speed in Germany, maybe to until the year of the end...
Exactly.
Is the speed of the first 6 months or not?
Yes. It will be. The same amount. Yes. Yes. Yes, we will have the speed ongoing. And on the other hand, we have, again, the situation that we have at the 55 megawatts we want to put into the construction. And we will see further projects will be permitted. So in September, we will go into the tender with the 55 megawatts and then I think in this year, we can start with the construction.
Okay. So my last question, you've mentioned the sold project in South Africa, and that you will get further payments if you are successful in the next tender. So when will this tender take place?
The tender will take place, I think, in the next month. Second September. In September. Yes, in September. Yes -- sorry with regards next year. So sorry, I should add.
Our next question comes from Peter Rothenaicher, Baader Bank.
I have a question on your project sales in the second quarter. Perhaps can you comment a little bit how was the outcome of these project sales in Romania and France? Were you able to realize the amount and the profit, which you initially expected? And how do you consider now the Romanian market? Will you go out of this market? Or do you think there is potential and also profitable business in Romania as well in the future?
Yes. First of all, we sold Reichmuth, Sweden. Yes, we have agreed not to disclose the purchase price. But I can say the middle is -- Yes, the middle million area will be for the sales. And we have the sale of Nanteuil, France, had the sale of Nanteuil, France, which is middle this year will be result -- it will be a result in total of EUR 5 million to EUR 6 million in the middle of 1-digit-million. It depends on some points. And the turnover will be -- yes, lower 1-digit-million euros. So in Romania, we will have -- we got a first payment of around EUR 4.4 million. We sold 100% of the shares and we can get a low double-digit million auto amount in total when the project of 221 megawatts, which will we have -- where we also do the development on their payment, which will be done, maybe come up in the next 2 to 3 years. So we think Romania has just right now a special situation we saw in opposite to the recent years. We see investor interest, which has become higher and higher. And therefore, we are working -- as you can see in the PV pipeline, we are working on a rapid growth of the PV pipeline, and we would like to sell one project this year. This is our target. What we -- it's not a -- this is a target which we now think we can say is realistic due to the fact that the investor interest is increasing. So we will stick in anyway in Romania due to the fact that this interest is high, and we have the access to the areas. And so we increase, especially our PV activities.
And the project sales, which you're targeting in South Africa are here, earnings prospects favorable as well? Or is this more difficult?
Yes. This is a situation where we, as I said, we got a very low payment of several EUR 100,000. But the issue is that we want to get the milestone payment achieved, which are related to the tender success first of all, and to the -- later on to the build and construction of -- starting of construction of the project. We are talking about around midsized higher -- between midsize and higher level of 1-digit-million euro as a turnover.
[Operator Instructions] And we have not received further questions. I will hand back to the speaker
So thank you very much for your interest. I wish you a good day, and see you the next time. Bye.
Ladies and gentlemen, thank you for your attendance. This conference has been concluded. You may disconnect.