Oslo, 18 August 2023: In the second quarter 2023, Scatec’s proportionate revenues jumped to NOK 5.87 billion (932), with an all-time high EBITDA of NOK 1.38 billion (517) compared to the second quarter last year. Power production EBITDA was NOK 959 million (617) and the company reported development and construction revenues of NOK 4.59 billion, with a gross margin of 12 percent.
“It has been a busy quarter with a lot of advancement for our business and I am pleased to see construction activities on all three of our large projects continue to progress according to plan. During the quarter, we continued to execute on our strategy that we presented to the market almost a year ago. We closed the NOK 546 million divestment of the Upington solar plants in South Africa and reached financial close for the NOK 2.9 billion Grootfontein solar project in the Western Cape of South Africa. We also maintained our focus on efficiency initiatives and finalised a major part of our cost control programme launched in May this year,” says Scatec CEO Terje Pilskog.
Power Production and Development & Construction
Power Production was 873 GWh (916) and proportionate revenues in the Power Production segment increased by NOK 352 million to NOK 1.17 billion compared to the same quarter last year, mainly driven by the NOK 315 million gain related to the Upington solar power plant sale, NOK 76 million in increased revenues in Ukraine and foreign currency effects.
The sharp increase in development and construction revenues in the second quarter was due to high accumulated progress of the projects under construction in South Africa, Brazil, and Pakistan. During the first half of 2023 Scatec discontinued development of projects in Brazil, Oman and Madagascar and recognised an impairment charge of NOK 55 million.
Delivering on strategy
During the quarter, Scatec continued to progress on several strategic initiatives, including the divestment of the Upington plants and further high grading of the pipeline with focus on project location, timeline, maturity, and value creation. In addition, Scatec implemented the efficiency programme with a target to reduce operating expenses by NOK 150 million from the first quarter 2024 compared to the first quarter 2023 level.
After the end of the second quarter, Scatec signed an agreement to sell its 52.5% equity share in the 40 MW Mocuba solar power plant in Mozambique. Also, in July 2023, Scatec reached a major milestone by signing an agreement to raise USD 102 million in funding for Release from Climate Fund Managers to accelerate its growth ambitions.
“We are pleased with the progress we have made during the last few months. We have reached some key milestones and now look forward to continuing delivering on our strategy,” adds Pilskog. “At the heart of our strategy is our role as a long-term player in the markets where we operate – developing, building, owning, and operating renewable energy plants with 4.4 GW in operation and under construction across four continents.”
Impairment, sales process, and consolidated profit
Scatec recognised an impairment charge of NOK 350 million for its joint venture project with Equinor in Argentina in the quarter. The project was partly funded with a bridge loan that has not been possible to re-finance due to the worsening political and economic situation. Therefore, a sales process has been initiated, and current offers are significantly below the total book value of the project (further details in the quarterly report on p. 5).
Consolidated revenues for the second quarter were NOK 1,230 million (836), while EBIT was NOK 686 million (336) and profit attributable to Scatec NOK 302 million (-97).
Scatec published its first Transparency Act Statement detailing the Company’s governance around human rights, approach to due diligence, salient human rights risks within its own operations and supply chain, and work undertaken during 2022. In addition, Scatec continued its preparatory work towards the requirements of the EU’s Corporate Sustainability Reporting Directive (CSRD), applicable to the Company from FY 2024.
The full year 2023 EBITDA estimate has increased by NOK 250 million from 2.85 – 3.15 billion to NOK 3.1 – 3.4 billion, reflection actual second quarter performance, including the gain from the sale of Upington, and revised estimates for the second half of 2023.
Proportionate historical financial information on a country-by-country level is attached to the stock exchange notice.
A presentation of the results, followed by a Q&A session will be held at Scatec’s headquarters at Skøyen Atrium III (1st floor), Askekroken 11, 0277 Oslo, today at 09:00 am CEST. You can also follow the presentation and Q&A session from our website, or this direct link: Scatec webcast Q2 2023.
For further information, please contact:
For analysts and investors: Andreas Austrell, VP Investor Relations, phone: +47 974 38 686, firstname.lastname@example.org
For media: Meera Bhatia, SVP Communications & Government Affairs, phone: +47 468 44 959, email@example.com
- Scatec second quarter and first half report 2023
- Scatec second quarter presentation 2023
- Scatec Q2 historical financial information 2023