Scatec reports third quarter results: Focus and discipline
02 November 2023 - 5:00PM
Scatec reports third quarter results: Focus and discipline
Oslo, 2 November 2023: In the third
quarter 2023, Scatec reported solid proportionate revenues of NOK
2.46 billion (1.63), with an EBITDA increase of 5 percent compared
to the third quarter last year to NOK 893 billion (850).
Scatec realised strong development and construction (D&C)
revenues of NOK 1.32 billion (412) from its three main projects
under construction and improved the gross margin for a third
consecutive quarter to 13 percent. These projects are now entering
the final construction phase and preparing for commercial
operations. Proportionate Power Production was 1,047 GWh (1,135)
and revenues in the Power Production segment were NOK 1,028 million
(1,120), impacted by reduced revenues in the Philippines. Power
production EBITDA was NOK 778 million (907).
“We take pride in the progress we have achieved since our
capital markets update and in recent months. Our dedicated team is
committed to driving transformative change through world-class
renewable energy initiatives spanning from South Africa to the
Philippines to Brazil. Scatec has realised significant renewable
growth through our highest construction activity ever and the
projects have strong economics with robust returns and attractive
gross margins,” says Scatec CEO Terje Pilskog.
“Crossing key milestones during the quarter, we have showcased
operational excellence and business model resilience amid current
challenging economic conditions. In addition, we have focused our
activities to ensure our readiness for profitable growth. The
pipeline has been streamlined; we have reduced operational costs
levels and sold assets, both to recycle capital and reduce
complexity in our portfolio,” adds Pilskog.
Strategy and way forward Scatec’s strategy
remains firm – to develop, build, own, and operate renewable
energy, with a focus on growing renewables and optimising the
portfolio. Scatec continues to see strong long-term demand for
renewables and particularly attractive opportunities within solar
as component prices are decreasing.
However, the current macro-economic landscape, marked by record
high interest rates is putting pressure on the cost of capital and
project profitability. Scatec is therefore aligning its growth rate
to internal funding capacity, targeting NOK 500 – 750 million of
gross equity investments annually, in line with the company’s
historical growth pace. Investing with discipline, Scatec will
utilise its integrated business model and stay committed to
delivering attractive returns of 1.2 times cost of equity, D&C
gross margins of 8-10% and O&M margins of 25-30%.
The cash flow from Scatec’s operating plants is robust and will
increase significantly over the next months with the new plants
coming into operations. Growth and debt repayments will be funded
by internal capacity coming from a strong and growing cash flow
from operating assets, enhanced capital recycling activities,
alternative ownership structures with reduced equity stake and no
dividend payments.
“We continue to be committed to disciplined growth with
attractive margins funded by internal capacity, while focusing on
optimising our portfolio. The long-term fundamentals for renewables
remain strong, and we’re adjusting in the short-term to navigate
the current macro-economic and capital market situation, putting
firm mitigating actions in place. We’re also accelerating our
efforts on capital recycling and will also consider additional debt
repayments,” adds Pilskog.
Outlook The full year 2023 EBITDA estimate for
Power Production is updated from NOK 3.1 – 3.4 billion to NOK 3.05
– 3.25 billion, driven by a revised production estimate for the
Philippines, the sale of the solar plant in Argentina and foreign
currency effects.
Dividend policy Given the current
macro-economic and capital market situation the Board of Directors
have approved to change the dividend policy to no dividend. The
dividend policy will be assessed annually by the board based on
Scatec’s capital situation.
Additional information 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
CET. You can also follow the presentation and Q&A
session from our website, or this direct link: Scatec webcast
Q3 2023.
For further information, please contact: For
analysts and investors: Andreas Austrell, VP IR, phone: +47 974 38
686, andreas.austrell@scatec.com For media: Meera
Bhatia, SVP Communications & Government Affairs,
phone: +47 468 44 959, meera.bhatia@scatec.com About
Scatec Scatec is a leading renewable energy
solutions provider, accelerating access to reliable and affordable
clean energy emerging markets. As a long-term player, we develop,
build, own, and operate renewable energy plants, with 4.4 GW in
operation and under construction across four continents today. We
are committed to grow our renewable energy capacity, delivered by
our passionate employees and partners who are driven by a common
vision of ‘Improving our Future’. Scatec is headquartered in Oslo,
Norway and listed on the Oslo Stock Exchange under the ticker
symbol ‘SCATC’. To learn more,
visit www.scatec.com or connect with us
on LinkedIn.
This information is subject to the disclosure requirements
pursuant to Section 5-12 the Norwegian Securities Trading Act
- Scatec third quarter report 2023
- Scatec third quarter presentation 2023
- Scatec Q3 historical financial information 2023
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