Scatec Asa

It's been a very strong start of 2025 for Skatec. And financially, we've also had a strong first quarter. We have made significant progress in the quarter towards our strategic ambitions. We have and we continue to grow renewables within our core areas. And we also continue to progress well in terms of optimizing our portfolio and bring down corporate debt on overall level. And I will usually start with an overall summary, and then Hans-Jakob will take us through the financials. So let us first start with the highlights of the quarter. Firstly, as I said, we've had a very strong financial quarter with 2.4 billion in revenues on a proportionate basis and 1.4 billion in EBITDA. These are figures that are significantly up relative to the same quarter last year. Secondly, we currently have 4.2 gigawatts in backlog and in construction. This is an all-time high number and enables us to have significant construction activity going forward and also enables us to double our operating capacity over the next couple of years. Finally, we've also made significant progress on optimizing our portfolio. And we are now having a corporate net debt, interest-bearing debt of 5.2 billion. And this is based on proceeds from divestments, as well as a very strong cash position in the company. Let me also mention the fact that we've issued a new green bond during the quarter of 1.25 billion Norwegian kroners at very attractive terms. And we've used the proceeds from this bond, including our available cash position, to also pay down our Euro bond. And through this, we have significantly improved the maturity profile of our debt on corporate level. And I'd like to thank our investors for the confidence that they are putting in us related to this. So altogether, this puts us in a very robust position in terms of exercising and realizing our growth portfolio, even in the current turbulent times that we're seeing in the capital market. On that note, let me also comment on what's going on globally in terms of tariff discussions and tariff negotiations. I would like to say that Skatec and our growth portfolio, we see no direct impact on our growth portfolio in terms of those tariff negotiations that are currently ongoing. Let me then move to power production. We continue to see high availability and stable operations across our portfolio of operating assets. And I think that our O&M teams, they are doing a stellar job in keeping this up. Power production for the quarter reached 979 gigawatt hours, and this is up from 901 gigawatt hours, same quarter last year. And if you adjust from divestments, up from 811 gigawatt hours, and this is a 21% increase in power production. And this is partly driven by the positive contributions from our new projects that has come into operation. We have Botswana that came into operation during the first quarter this year. And we also had Brazil and Pakistan coming into operation in first quarter last year. And all of these projects have contributed positively to the increase in power generation. In addition, we've also had very good hydrology in Laos and the Philippines that has also contributed positively to our power generation. The strong production has contributed to a 72% increase in our revenues in the power production segment. We are now reaching just about 1.6 billion in total revenues. And this has been driven by strong performance, obviously, across the portfolio. But we have also seen accounting gains related to the divestments of Uganda and of Vietnam. And we are also seeing a very strong quarter in the Philippines, which I will come back to. And in addition to that, we have also seen a one-off payment from a tariff true-up in Pakistan. And we've also seen other net positive movements. So let me then talk about the Philippines. The Philippines delivered an exceptional quarter, both in terms of power production and auxiliary services, and also in terms of financial contribution. And in the Philippines, we reached a power production of 149 gigawatt hours, which is, in principle, a doubling or close to a doubling of power generation relative to the same quarter the year before. This is due to strong hydrology. We had good water levels when we came into the quarter, and we have also had good water inflows during the quarter to contribute to this. Also, please notice in terms of this quarter, despite being in the dry season, we have a long energy position. This is obviously partly due to the fact that we have a very strong generation, but also partly due to the fact that we have reduced our contract portfolio in the Philippines, which is then putting us in a more robust position in terms of the dry season in the Philippines. Net revenues in the Philippines increased by 2.8 times, now reaching 320 million in the quarter. And we see that we have strong contributions, both from power sales as well as from ancillary services. And this again shows the strategic value of the flexible position that we have with hydropower and with batteries in the Philippines. Further, ancillary services revenues reached 224 million. And batteries are now playing an important role in the revenue generation that we're having in the Philippines. And we see that batteries is out-competing hydropower in terms of the short response ancillary services market. And on the back of this, we continue to develop and build out more battery capacity in the country. So in terms of EBITDA, this increased them to 270 million, which is an increase by 3.6 times. So overall, again, this quarter highlights the earnings potential of the Philippines, and particularly the growing contribution from the ancillary services segment and also from batteries. Let me then move to construction. We are growing our portfolio, and we currently have close to two gigawatts of projects in construction. This is really an all-time high for Scartech. Since the last reporting, we have added three new projects to our construction portfolio. We have the 1.1 gigawatt solar and 100 megawatt battery project Obelisk in Egypt. In addition, we have two battery projects in the Philippines. While these two projects are merely 56 megawatts, They will represent a tripling of our battery capacity in the Philippines, and this is significantly improving our position in terms of the ancillary services market going forward. In total, now we have a construction portfolio that is spanning six different countries. We have South Africa, where we have Grote Fonteyn, which is now nearing completion, and we expect to put into operation during Q2 this year. And we also have the Mogobe battery project that is now progressing well in terms of construction. In addition, we have Botswana, where we took phase one into operation in the first quarter, and they're now also well underway with constructing the second phase in Botswana, another 60 megawatt project. Construction is also further progressing well in Brazil, Tunisia, and the Philippines, and we expect all of these projects to come into operation during the first half of 2026. And finally, we have the Obelisk project in Egypt that I just mentioned. This is a 1.1 gigawatt project with 100 megawatts of battery capacity. It's being implemented on an accelerated schedule, and we aim to get the first half of the capacity, solar capacity, plus the batteries into operation first half next year, and the second phase into operation during second half next year. I think that the breadth of our construction portfolio is obviously showing, and it's the result of the development approach, the solid development approach and activities that we've had over the last couple of years. When these projects are being brought into operation during 2026, we will reach more than six gigawatts in operational capacity. So I will now zoom out a bit and talk about sort of the overall growth profile. So we continue to expand our near-term growth platform. And in addition to the two gigawatts that I have currently talked about in construction, we also have 2.2 gigawatts in backlog. and we have since the start of the year added 1.5 gigawatts into the backlog which is a significant number and in addition to the romania project that we talked about during the first quarter first quarter or the q4 reporting we have also now added 120 megawatts where we've signed the ppa in tunisia which is then doubling our potential capacity in Tunisia. Tunisia is emerging as a very interesting market for us. And then we have also signed 1.1 gigawatt PPA with Egypt Aluminium. And this is a very interesting project. It's the first corporate PPA in Egypt. It's being backed by Sovereign Guarantee. Egypt aluminium is the largest electricity consumer in Egypt. It's also the largest CO2 emitter in Egypt. This is a very important project in terms of industrial decarbonization in the country. We will implement this portfolio based on our integrated model. Let me also then add some comments in terms of how we capture value and also in terms of how we manage working capital of this portfolio going forward. So our growth is underpinned by a strong DNC revenue model and also limited equity exposure, enabling us to scale through a self-funded model without overstretching our balance sheet. And on the left side here, you see our construction portfolio, which I've already talked about. It has a DNC or an EPC revenue value of about 9.2 billion Norwegian kroners. And the remaining contract value related to this portfolio is 6.7 billion. And then in addition, you will see that in terms of the backlog, we also have about 9.3 billion in EPC revenue value linked into that portfolio. So in total, with these projects together, we are seeing a remaining EPC value related to backlog and construction of about 16 billion. In terms of the backlog, you will see that three of these projects are expected to reach financial close by the end of 2025. Among these three projects, we will also see our Egypt green hydrogen project, where we now expect financial close rather in the second half, as we see that the structuring and the financing of this project is taking more time than what we have previously communicated. And for the full near-term growth portfolio, so for all of these projects, we are expecting to realize a gross margin in a range of 10 to 12%. So this margin generated from our construction is key to our strategic strategy of capital efficient growth. And this is funding a large part of the equity injections that we will put into these projects. And also on the top right side here, you will see that we will continue to implement this obviously based on an S-curve. So all projects, they will have slower revenue recognition during the first and the last parts of the construction period. and then they will have a more aggressive revenue recognition during the middle part of the construction period. And importantly, we strive to obtain and maintain positive working capital during the construction period, as we are illustrated at the bottom right here, by trying to get milestone payments under the EPC contract in the beginning of the construction period, and then push out payments to suppliers and to contractors towards the end of the construction period. As you understand now, we have a transformative period ahead of us. We will implement this and all this portfolio as part of our self-funded growth plan. And you will see that we have high construction activity now. For the next two to three years, we aim to implement this whole portfolio by the end of 2027, which means that by the end of 2027, we target to double our operating portfolio. So with that, I will hand it over to Hans Jakob to take you through the financials.

Thank you, Terje, and thank you for coming and listening to SCARTech today. So, we present strong results across the group, driven by the higher power production, the high DNC activity, and gains from divestments. I'll walk you through the group financials and the performance of our operating segments, and I'll also cover the improved capital structure and strategic progress. Starting with the group level performance, the strong results in the first quarter is backed by consolidated revenues significantly up 42% to 1.8 billion. EBITDA, 1.5 billion, up 48%. To the right, you see the proportionate financials. Revenues increased by 95% to 2.4 billion. while EBITDA grew by 63% to 1.4 billion. The increase was mainly driven by higher power production, especially in the Philippines. The divestment gains and our proportionate figure also reflect the high DNC activity in the quarter. Our power production segment delivered another strong quarter. The revenues reached 1.6 billion, up 53% from the same quarter last year, and the EBITDA was 1.4 billion, a 60% increase year on year. As mentioned, the growth was mainly driven by the Philippines and the divestment gains. On a 12-month rolling basis, the segment has delivered more than 6 billion in revenues and 5.2 billion in EBITDA, underlying the strength of the cash flow in our portfolio. Overall, we are very pleased with the value generated from our operating assets. In our development and construction segment, activity levels continued to increase. Proportionate revenues of 751 million and EBITDA of 26 million. In this segment, the quarterly performance shows variability, pending on project phasing. But the trend from the last 12 months confirmed the long-term strength and scalability of our DNC platform. It gives a clearer picture of the strong momentum we are building. Over the past year, DNC revenues have reached 2.9 billion, with a steady increase over the last three quarters, and we aim to continue. Keep in mind that the 12-month rolling figures from Q1 last year includes the very busy construction period of 2023. The rolling EBITDA ended at 202 million, with contribution from high-margin projects and disciplined cost control. The increasing trend reflects higher activity levels across several geographies. With a strong backlog moving into construction, we expect DNC to remain a key engine of our continued profitable growth. At the end of the quarter, we had an all-time high available liquidity of 5 billion NOK. This was impacted by significant divestment proceeds and it has continued to strengthen. In total, the liquidity including undrawn RCF increased by 1.2 billion. Let me explain some of the main movements. We received 155 million in distribution from power plants, 2 billion in net proceeds from announced transactions, We invested net 214 million in growth projects and paid 391 million of interest and debt repayments. Additionally, we have increased our RCF by 50 million to 230 million dollars after the reporting date. In total, we now have close to 5.5 billion NOC in available liquidities. We continue to strengthen our capital structure. Net corporate debt was reduced to 5.2 billion from 7 billion in Q4. The reduction was mainly driven by cash received from divestments. The cash position and net interest-bearing debt will vary over time, dependent on cash movements. We also repaid 240 million of debt in combination of regular amortization and through refinancing. On project level, the net debt decreased to 13.4 billion, down from 14.9 billion, and this was primarily due to the removal of debt from divestments of the Uganda and Vietnam projects. We also report a 200 million net increase of debt related to projects under construction. These reductions reflect our continued commitment to capital efficiency and balance sheet strength. They position us well to finance growth without increasing corporate leverage. Now, let me look at the progress on divestments and the leverage. We have set out a clear strategy to rotate assets and reduce corporate debt. We are targeting to self-fund our growth while strengthening the capital structure by 2027. In the strategic update last year, you might recall that we specified divestment proceeds of minimum 4 billion NOC, of which 75% would be used for debt repayments. I'm pleased to say that we have come quite far already. Since the Q3 last year, we have generated 2.6 billion in proceeds from asset divestments, including transactions in Uganda, Vietnam, and South Africa. This demonstrates both the market's appetite for our assets and our ability to execute divestments timely. As a result of these divestments, our net corporate debt is down by 2.9 billion since the Q3 last year. We are on track to deliver on our 2027 targets. Here you can see the debt maturity profile of the corporate debt following the transactions in the quarter. In the quarter, we took further steps to extend and optimize our corporate debt profile. We successfully placed a four-year 125 billion green bond with a margin of three-month NIBOR plus 315 basis points with the help and support of our core banks. This reflects the credit market's confidence in our ability to continue to deliver strong operational and financial results in the future. These proceeds from the bond, together with the existing liquidity, were used to repay the 114 million euro bond, and we have repaid or refinanced all major short-term debt. We have our next large maturity in 2027. Overall, we have a well-structured and extended maturity schedule with solid headroom to support growth and navigate market volatility. Let me share the outlook for 2025. For the full year, we estimate a power production between 4,100 and 4,500 gigawatt hours, unchanged from last quarter. We have, however, increased our expected full year 2025 EBITDA midpoint by 400 million. The range of 4,150 to 4,450 million for the power production segment is what we guide on. The update is driven by divestment proceeds over performance in the quarter and partly offset by negative FX effects. For the second quarter, we expect a total power production between 900 and 1,000 gigawatt hours. EBITDA in the Philippines of 180 to 220 million based on normal hydrology and strong contribution from ancillary services. In our DNC segment, we currently have a remaining contract value, as Terje said, of 6.7 billion. And we keep a gross margin guidance of 10 to 12% on average across portfolio for project under construction and in backlog. For corporate, we expect a full year EBITDA of 115 to 125 million negative in line with previous guidance. These estimates reflect a strong base for operating assets, high construction activity, and in line with the previous guidance. A good start of the year, positioning as well for reaching our 2025 targets. And then I welcome Thalia to do the quick summary.

strong power production, good progress on other investment plans, and we also have very good D&C activity level and progress there. In terms of the growth part, we are now seeing that we have a portfolio, a near-term growth portfolio, linked to backlog and construction, that is set to double our operating capital. our operating capacity in a 2027 perspective. And finally, we are progressing well in terms of optimizing the portfolio and that activity with the divesting activities, refinancing activities is strengthening our balances, enabling us to take down corporate debt now to 5.2 billion And we also have a liquidity position, as Hans Jakob talked about, of 5 billion and including the recent increase in the RCF, 5.5 billion. And all of this enables us and puts us in a good position to continue to implement and push forward with our self-funded growth plan. Thank you. Then we open up for Q&A.