Company announcement 11/2022 (08/29/2022)
Second quarter financials for European Energy exceeded the prior year period despite a challenging Market with increasing revenues and costs due to the turbulent geopolitical situation.
European Energy reported second quarter EBITDA of EUR 12 million compared to EUR 7 million in the second quarter last year and a profit before tax of EUR 6.4 million compared to EUR 0.9 million in the Solid results achieved in Q2 last year. By mid-2022, the Group had achieved almost 57% (EUR 77.1 million) of the EBITDA forecast for 2022 and almost 70% (EUR 69.2 million) of the earnings before tax forecast for 2022.
While energy prices are at historically high levels, current high inflation and other factors have resulted in higher procurement prices for future projects, increasing both construction and financing costs.
There are currently two major trends disrupting the energy market. Energy prices remain at a high level, as do the prices for steel, logistics and solar panels. At the same time, inflation and interest rates are rising. Increasing investment in new renewable power generation is the best and only long-term solution to reduce both energy prices and CO2 emissions. For this reason, European Energy will continue to use all free funds to invest in new projects.
These disruptive factors contribute to the interest European Energy has in its renewable projects from stakeholders and business partners around the world.
The latest Power-to-X business area is seeing increasing interest from stakeholders and business partners with a new green hydrogen contract for Port Esbjerg (DK) and a new research project on green aviation fuel.
With the traditional disposal of energy farms, there has also been a steady interest in our projects and an increasing net value for our assets. European Energy is pursuing a strategy of keeping more assets within the group for longer. Therefore, the group only completed a minor project sale in the second quarter of 2022. Interesting new projects include plans to build the largest solar park in Latvia in close cooperation with the Latvian authorities.
The planned construction activities in various markets for the second half of 2022 will include the grid connection of over 600 MW of new renewable energy capacity. Actual grid connection dates for projects may affect final annual results. Current guidance does not include power sales from these new assets. If all equipment is connected without delay, electricity sales may exceed forecast if the energy market stays at current levels throughout the year.
The increase in European Energy’s development pipeline from 16 GW in Q2 2021 to 24 GW in Q2 2022 is a result of the Group’s ability to secure land for new projects. This further illustrates the great interest shown by external partners in promoting the green transition.
Total group revenue in the first half of 2022 was EUR 285.5 million compared to EUR 38.1 million in the first half of 2021. The main reason for this strong increase is the sale of energy parks made in the first quarter of 2022.
The outlook for European Energy in the 2022 financial year remains at an EBITDA of EUR 135 million and earnings before taxes of EUR 100 million. If power prices stay at current levels, the group will consider holding some more assets to boost IPP activity.
For more information, please contact Investor Relations: [email protected]
This announcement is made in accordance with the EU Market Abuse Regulation (Regulation (EU) No. 596/2014, as amended).