Scatec Asa

and a warm welcome to all of you attending our fourth quarter presentation. Q4 was another strong quarter for Skaltech, and I'm as excited as these guys to take you through the results. In Q4, we have continued to make good progress on our strategy. We have reached a number of important milestones, and the financial results, as I've said, are very strong. As usual, I will start by going through these highlights, before Hans-Jakob will take you through the financials, and then towards the end, we will also open up for questions. But firstly, let me take you through a summary of 2023. It has been a year of significant progress in implementing our strategy, and I'm proud of the achievements of our teams globally. In the power production segment, our operating assets generated 3.6 terawatt hours of clean energy and delivered an EBITDA of... And a warm welcome to all of you attending our fourth quarter presentation. Q4 was another strong quarter for Skaltech, and I'm as excited as these guys to take you through the results. In Q4, we have continued to make good progress on our strategy. We have reached a number of important milestones and the financial results, as I've said, are very strong. As usual, I will start by going through these highlights before Hans-Jakob will take you through the financials. And then towards the end, we will also open up for questions. But firstly, let me take you through a summary of 2023. It has been a year of significant progress in implementing our strategy, and I'm proud of the achievements of our teams globally. In the power production segment, our operating assets generated 3.6 terawatt hours of clean energy and delivered an EBITDA of 3.2 billion. This is including gains of sale of assets. This represents avoidance of 3.9 million tons of greenhouse gas emissions on a 100% basis. In the DNC segment, we generated all-time high DNC revenues of 8.2 billion, with a very strong average gross margin of 12% across the year. We crossed the finish line for Kennard and are close to completing Mendevim and Sucur in Brazil and Pakistan. And once fully operational, these three projects will generate 750 million EBITDA to Skatec in our power production segment. We also secured 2.7 billion of new growth funding through selling non-core assets, capital recycling and platform funding based on new partnerships. We divested four solar plants in South Africa, Mozambique, Argentina and in Rwanda. And we have also established release as a robust platform and raised in total 202 million in debt and equity funding in two separate transactions, including IOC and climate fund managers. Finally, we have also secured a growth baseline going into 2024. This represents 350 million in own equity investments and 2.5 billion in contracted DNC revenues. And then I would like to give some reflections on the climate challenge and the market outlook for 2024 and onwards, starting then with COP28. In terms of climate commitment, COP28 delivered some positive results. Amongst others, the establishment of a loss and damages fund, And 130 countries pledging to triple renewable energy capacity by 2030. I think this is a very important achievement. And a commitment to transition away from fossil fuels in the end statement of the conference. This is the first time in the history of COP that transitioning away from fossil fuels has been included. Despite these accomplishments, our work is far from complete. It is imperative that we continue to accelerate the momentum of the green shift with a particular emphasis on increased investments in green energy and especially also in emerging markets. Scaling up the deployment of clean energy in these markets is crucial to avoid further investments into fossil fuels and to unlock a multitude of economic, security and energy access benefits. To achieve this, strategic policymaking, effective risk mitigation mechanisms and concessional finance are essential. COP also offers an opportunity for Skatec to advance our agenda and also advance our projects. Amongst other, we signed an agreement to develop a one gigawatt hybrid solar and battery storage project in Egypt. This is still in early phase and we have not yet included it in our pipeline figures. We also met with IFC in relation to the establishment of a $100 million loan and $65 million guarantee facility that is being provided to release. Then let me also share some reflections on the industry development. The fundamentals for renewables continue to strengthen with significant price drops of both solar PV modules and batteries through 2023. As a matter of fact, solar PV module prices have decreased by 45% and energy storage systems by 24% last year alone. And both are now at all-time lows. The reductions are driven by significant scaling up of capacity, technology development and innovation. As supply of both solar module and battery input materials exceed estimated demand, We expect the prices to remain low also going forward. And this means renewables are more competitive than ever. And this is especially the case in our focus markets, that is in the emerging part of the world. So let me then move to the fourth quarter and I will start with the highlights. We delivered overall proportionate EBITDA of 808 million. This is slightly up from same quarter last year. The DNC margin was 15%, ending a year with high activity and very strong performance in the DNC segment. We finalized construction of Kenhart and started commercial operation in early December. This contributed 40 million in EBITDA to the power production segment through the generation in December. And also with financial close in place, we started initial construction works for 273 megawatt solar in South Africa and 60 megawatt solar in Botswana. And we expect full notice to proceed for these projects to happen now in first quarter 2024. In addition, we were awarded our first battery storage project of 103 megawatts in South Africa. The project is also expected to reach financial close and start construction later this year. And we continue to deliver on our strategy to divest non-core projects, and we closed the sale of Mozambique, and we also signed agreements to sell Rwanda during the last quarter of the year. As said, Release raised funding from IFC to support their growth ambitions, and they have now secured more than $200 million in growth funding for this platform. And now in January, we have also agreed refinancing with our main banks of our $150 million green term loan, with $135 million still outstanding, with a new maturity in the fourth quarter of 2027. And also, as announced this morning, we are also contemplating a new four-year senior unsecured bond issue, with a partial buyback of our outstanding euro denominated bond. Then in terms of power production. Here we generated 811 gigawatt hours of electricity in Q4. The generation volume was impacted by hydrology in the Philippines and the sales of Uppington and Mozambique, while the start of Kenhart contributed positively to the generation. Plant availability was close to 100%, and we had no lost time incidents. We delivered an EBITDA of 793 million in the quarter, in line with the same quarter last year. And in solar, the positive year-on-year increase in EBITDA was due to 33 million increase in Ukraine. This is including a one-off insurance payment. 40 million from Kenhart, and 33 million from the sale of Mokuba. And then, in terms of the Philippines, net revenues were 231 million compared to 361 million last year, and EBITDA was 179 million compared to 307 million year on year. This effect is mainly driven by lower volume from weaker hydrology, and El Niño continues to negatively impact precipitation in the region, and power generation was 161 gigawatt hours compared to 281 gigawatt hours in the same quarter last year. And also reduced spot prices with average price reduced to 5.5 peso per kilowatt hour from the unusually high prices that we experienced in quarter last year. The price level that we had in Q4 last year is still a good level if you look at it from a historical perspective. Then ancillary services revenues increased to 102 million, reflecting a ramp up in volumes under the new contracts awarded in the auction earlier last year. The price received is however in line with our previous contracts as the new price awarded under the auction is pending regulatory approval. This approval is expected to be received later this year with retroactive effect. Then over to the DNC segment. We are close to completing our largest construction program ever in Skaltech. And Q4 was another good quarter for the DNC segment. Revenues reached 0.5 billion as we are now in the final stages of construction of this program. We realized the gross margin of 15%, and this is evidence of the great work our teams are doing with the projects being delivered within schedule and within budget. I'm also proud to say that we have started commercial operation of Kenhart in December. The hybrid solar and battery project is one of the world's first and largest of its kind. The project puts Galtech in the forefront of combining solar and batteries, and we will gain valuable experience from this project in the months and the years to come, which we will be able to deploy into new projects in South Africa and into new markets. At Mendebim in Brazil, final works are ongoing and commissioning activities are starting up. And then finally, the solar project in Pakistan is close to completion, with final commissioning activities ongoing and commercial operational dates for all three plants are approaching quickly. And then looking forward, we have also reached financial close and thus secured 2 billion of contracted DNC revenues related to the Grottfontein solar project in South Africa and 0.5 billion for the first phase in Botswana, which is 60 megawatts. Then in terms of the development activities. We continue to deliver on our commitment to high-grade our portfolio with focus on project location, maturity, timeline and value creation. In Q4, we added attractive solar projects in core markets to our pipeline, increasing the backlog in pipeline to 12 GW, up from 11.2 GW to Q4. This was mainly a project in South Africa to further position ourselves for the upcoming tender opportunities that will come in South Africa later this year. During the quarter, we also reviewed the Tunisia portfolio in backlog, and we decided to discontinue development of 204 megawatts, as we have not been able to improve project economics sufficiently for this specific project. This is underlining our commitment to investment discipline, and we will not move forward with projects that we are not convinced will be able to meet our hurdle rates. The remaining 120 megawatts in Tunisia will continue to be developed based on more favorable project economics. And as a result of this, The share of solar in our pipeline increased to 59%, and the share in our focus markets increased to 92%. And we continue to see attractive opportunities for solar, onshore wind and batteries in our focus markets. And as an example again, I would also like here to mention the solar and battery storage development agreement we have signed in Egypt, not yet included in our pipeline figures. So with that, I will hand it over to Hans Jakob, that will be taking you through the financials.

Thank you, Terje. Good to be here, and now let me take you through the financials. We reported total proportionate revenues of 1.7 billion in the quarter. Revenues from power production was 1 billion, in line with the same quarter last year. The DNC revenues reached 532 million in the quarter, compared to 627 million in the same quarter last year, as the project and the construction are in the final stages. The total EBITDA was 808 million, an increase of 3% from the same quarter last year. Power production EBITDA was 793 million compared to 821 million. And finally, the DNC segment delivered an EBITDA of 7 million, reflecting a strong gross margin of 15% and reduced operating expenses. If you look at the 2023 full-year figures, it is quite an achievement to say that the DNC revenues reached an all-time high of 8.2 billion compared to 1.1 billion in 2022. This is the key driver for a total all-time high revenues of 12.7 billion. The power production delivered revenues of 4.1 billion compared to 3.7 billion last year. And this was mainly explained by the sale of Eppington, increased revenues from Ukraine and the foreign currency effects. Total proportionate EBITDA reached 3.8 billion, a 51% increase from last year. The power production EBITDA was 3.2 billion. And in the DNC segment, we delivered an EBITDA of 672 million, a solid full year gross margin of 12%. At the upper end, our guided range of 10 to 12%. If you look at the consolidated financials, the total revenues was 1.6 billion, compared to 993 million year on year. Revenues from power sales increased by 17% to 906 million, mainly driven by the contributions from Ukraine, including a 75 million insurance proceeds for the Renji power plant. We recorded a net accounting gain of 532 million from the sale of Mokuba in Mozambique and the sale of a 32% share of release. This led to a 96% increase in EBITDA to 1.3 billion compared to 689 million in the same quarter last year. Our consolidated earnings before interest and tax EBIT was 1.1 billion, and the net profit 724 million. The net profit was positively affected by a 457 million tax benefit related to KenArt, which qualified for a South African tax incentives for renewables after reaching commercial close. The full year 2023 consolidated financials clearly demonstrates a solid revenues increase of 26% to 4.7 billion Norwegian kroner. This was mainly due to the gain from Uppington, Mokuba and the release transactions. We delivered a consolidated EBITDA of 3.6 billion, an increase of 39%, and our EBIT was 2.6 billion, with a net profit of 1.1 billion. The total proportionate net interest bearing debt increased by 400 million to 20.8 billion in the quarter. Our proportionate net interest bearing debt consists of two different debt classes. We finance our power plants with non-recourse project debt, which is serviced solely by the cash flow from the individual power plant, with no direct support from Skatec ASA. Additionally, we have debt on corporate level, which is serviced by distributions from the power plants. Our non-recourse debt was reduced by 1.1 billion, mainly due to ordinary amortizations, divestments and positive effects. 3.5 billion of project debt related to Kennard was reclassified to in-operation after reaching commercial operations. Our corporate debt increased by 1.6 billion, mainly due to large investments, working capital movements and debt repayments. We had 169 million of net interest expenses on our corporate debt, an increase of 62 million year on year. And now, in January this year, we agreed the refinancing terms with DNB, Moldea and Swedbank, which are present today, of the $150 million green term loan. The green term loan will have maturity in the fourth quarter of 2027. At the end of the quarter, we had 2.15 million NOK in available liquidity, including unused limit on our RCF. Now I'll take you through the main movements in the cash in the quarter. We received 418 million in distributions from power plants. We had 187 million in corporate costs, including corporate interest expenses. We had net working capital movements of 1.1 billion, mainly related to KenArt. This reflects our working capital management throughout the construction period, with a build-up of working capital in the early stages of construction and reversals at the end when the construction is being finalized. We invested 659 million in growth projects, of which 529 million were equity invested into the Kennard SPV, due to an equity-lost financing structure. We paid 285 million, including accrued interest, on the loan from Power China. And finally, we made a drawdown on our corporate revolving credit facility of 713 million to manage internal cash movements. And now, Terje will take you through the outlook.

Thank you very much, Hans Jakob. So now in terms of the outlook for 2024. In power production, we estimate a proportionate power production for the full year of 4.2 to 4.6 terawatt hours, with an EBITDA in the range of 3.4 to 3.7 billion. These estimates reflect continued impact of El Niño during the first half of 2024, with an EBITDA in the Philippines of 10 to 70 million in the first quarter. a normalization of production in the Philippines in the second half of 2024, and contribution from Kenart, Menubim and Sukkur power plants coming online. In DNC, we have already achieved financial close for projects with DNC contract value of 2.5 billion, and we continue to target 8-10% gross margins for new projects. We estimate corporate EBITDA of negative 120 to 130 million based on costs discipline, reflecting the effects of the cost efficiency program implemented during the last year. And I look forward to another year of profitable growth and attractive renewable energy projects and investments for Skatec this year. And just to emphasize, our strategy remains firm. We are committed to deliver on our two strategic pillars, grow renewables and optimize our portfolio. We will grow based on our internal funding capacity. We will target 500 to 750 million in annual equity investments. And we will grow renewables mainly in our core markets, within solar, onshore wind and battery storage. And we will continue to focus on recycling through asset rotation and refinancing to add additional growth capacity going forward. Renewable energy is more competitive and attractive than ever. And Skatec, we are well positioned to take advantage of this opportunity. Thank you very much. And we are now open for questions.