In the first quarter 2022, Scatec’s proportionate revenues reached NOK 1,014 million (954) with an EBITDA of NOK 398 million (636). Power production reached 868 GWh (854).
“Our first-quarter results were impacted by Russia’s war in Ukraine, the broader geopolitical uncertainty and seasonality in the Philippines. Moving forward, we expect to bring our backlog into construction during this year and we will continue to grow our pipeline in core markets for our traditional renewable energy solutions. In addition, we will have a strong focus on further developing our green ammonia and green hydrogen business,” says Terje Pilskog, CEO of Scatec.
“We will execute our growth strategy by applying focus and discipline in everything we do, and I look forward to continuing developing our strong position as a leader in renewable energy solutions,” adds Pilskog.
Proportionate Power production
Power Production revenues continued to be the main contributor in the quarter, with revenues of NOK 933 million (868) driven by increased production in solar and wind, and an EBITDA of NOK 490 million (704), impacted by loss provisions in Ukraine and hydrology variations in the Philippines.
Financial optimisation, green ammonia, and battery storage investment
During the quarter, Scatec announced the refinancing of power plants in South Africa, Vietnam, and Egypt at improved terms, demonstrating the company’s ability to find innovative financial solutions and new funding sources to enhance project returns. Scatec also continued building a leading position within green ammonia and hydrogen at attractive locations in Oman and Egypt, with favourable conditions for renewable energy. The company made its first stand-alone investment in a 20 MW battery energy storage system in the Philippines, marking a key milestone of Scatec’s growth strategy in the country.
On 24 February, Russia attacked Ukraine, a war that has now entered its third month. We witness a country under siege and countless lives lost in defence of their home. This situation has given rise to a major humanitarian and geopolitical crisis. Our top priority is the safety and wellbeing of our Ukrainian colleagues. Scatec’s plants are 95 per cent operational; however, the situation remains volatile, and we continue to monitor the situation closely. Scatec made an impairment of NOK 770 million of non-current assets and a credit loss provision on trade and other receivables of NOK 87 million on a proportionate basis in Ukraine during the quarter.
The 2022 guidance has been adjusted based on the situation in Ukraine. We now expect to produce between 3.9 to 4.2 TWh on a proportionate basis and generate an EBITDA for 2022 of NOK 2.3 to 2.6 billion.
Backlog and projects
Scatec has a backlog of five projects totalling 1.7 GW of solar and 1.1 GWh of battery storage capacity after discontinuing development of Mali and Bangladesh in the quarter. Scatec made good progress on these projects during the quarter and aims to reach financial close and start construction on all projects during 2022.? Despite challenges including cost inflation, Scatec expects these projects to deliver returns and margins in line with the company’s guidance?.
Scatec’s first-quarter consolidated revenues were NOK 759 million (831), with an EBITDA of NOK 433 million (631). The consolidated net loss was NOK 1,062 million (profit 42).
Changes to executive team
Scatec is also announcing some key changes to the executive management. Kate Bragg, who joined Scatec in August 2021 as Head of Strategy and M&A, will join the team as EVP Corporate Development, while Ann-Mari Lillejord, who re-joined Scatec in April 2022, will become EVP Project Development.
In addition, Power-to-X will be lifted to executive level and this area will be managed by Pal Helsing in the interim, in addition to his current role as EVP Solutions. Release, a flexible leasing agreement of pre-assembled and containerised solar PV and battery equipment, will become an independent business unit.