ENCAVIS AG demonstrates the resilience of its business model in turbulent times with stable revenue and stable earnings per share

Corporate News

ENCAVIS demonstrates the resilience of its business model in turbulent times with stable revenue and stable earnings per share

Hamburg, 15 August 2023 – Hamburg-based wind and solar park operator Encavis AG, listed on the MDAX of Deutsche Börse AG (Prime Standard; ISIN: DE0006095003; ticker symbol: ECV) is clearly on its growth path in the first half of 2023. After six months, despite the meteorological weaker first half of 2023, the production volume exceeds that of the comparable period of the previous year. The increase in production volume from 1,696 gigawatt hours (GWh) to around 1,734 GWh in the first half of 2023 is driven by the wind farms and solar parks newly acquired in 2022 and newly connected to the grid.

The Management Board confirms the guidance for the full year 2023 published in March 2023, as well as the Accelerated Growth Strategy up to 2027.

In the first six months of the 2023 financial year, the Group generated revenue in the amount of EUR 226.3 million, essentially matching the previous year’s figure of EUR 226.4 million – each after revenue skimming of the amounts resulting from the price capping systems for electricity implemented in some countries. Of this, 68% is accounted for by the solar park portfolio at EUR 153.1 million (previous year: EUR 162.2 million) and approximately 25% is accounted for by the Group's wind farm portfolio at EUR 48.7 million (previous year: EUR 56.7 million). The significant revenue growth is attributable to the PV Services segment. The first-time consolidation of Stern Energy will increase the segment's revenue by around EUR 23.5 million to approx. EUR 25.8 million. The weather-related decrease of around EUR 19 million in the first half of 2023 compared to the meteorologically very strong first half of 2022 was offset by the new wind farms and solar parks connected to the grid in 2022 and by the full consolidation of Stern Energy – at an electricity price that was in line with the expectations but fell short of the level seen in the first half of 2022. The Asset Management Segment increased revenue by more than 12% in the first half of 2023 to EUR 7.5 million (previous year: EUR 6.7 million).

“Our business model has once again proven its resilience even in these turbulent and difficult to plan times. We owe stable revenue and equally stable earnings per share to our consistent growth path without losing focus on future returns. Despite adverse weather conditions, slightly lower electricity prices and continuing revenue levies, we look back on a successful first half of 2023,” commented Dr Christoph Husmann, Spokesman of the Management Board and CFO of Encavis AG, on the successful first half of 2023. “In view of the numerous wind and solar park projects available on the market and the continued well-stocked pipeline of our Strategic Development Partners, we look forward with confidence to the coming years of increasing growth,” adds Mario Schirru, CIO and COO of Encavis AG.

The roughly 11 % decline in operating EBITDA*⁾ in the first six months of the 2023 financial year to EUR 151.6 million (previous year: EUR 170.6 million) reduced the EBITDA margin by a good eight percentage points to 67 %. The decrease is attributable to the inclusion of Stern Energy’s service business in the Group’s figures for the first time, since service business is associated with customary lower margins than electricity generation from Renewable Energy sources. In the PV Parks and Wind Parks segments, the operating EBITDA margin remained at its usual high level of 75 %.

Operating earnings before interest and taxes (operating EBIT*) decreased to EUR 93.5 million (previous year: EUR 109.8 million), primarily due to the shortfall in electricity volume caused by meteorological conditions. The operating EBIT margin is around 39% (previous year: 46%). Overall, ENCAVIS achieved consolidated operating profit after tax of EUR 52.6 million (previous year: EUR 56.4 million). At EUR 0.31, operating earnings per share*⁾ (EPS) for the first half of 2023 were virtually unchanged year-on-year (previous year: EUR 0.33 per share) thanks to lower net interest expenses and significantly lower taxes on income compared to the unusually strong previous year despite growth. In these turbulent times, which are reflected in various expense and income items, the Encavis business model is proving to be very resilient, with both net revenue and operating earnings per share (operating EPS) performing on a par with the previous year.

Despite the roughly EUR 26.0 million drop in earnings before taxes (EBT) and the approximately EUR 1.7 million decrease in depreciation and amortisation, additional tax payments of around EUR 13.1 million compared to the same period in the previous year were to be paid in the first half of 2023. This results in reduced cash flow from operating activities after six months of EUR 113.5 million (previous year: EUR 160.2 million) and operating cash flow per share of EUR 0.70 (previous year: EUR 1.00).

The equity ratio as at 30 June 2023 rose to 32.9 %. The Group succeeded in reducing the negative valuation effects recorded in the hedge reserves at the end of 2022 (equity ratio as at 31 December 2022: 28.1 %) for derivative financial instruments held for interest rate and/or electricity price hedging. The fully retained net profit for 2022 also had a positive effect in this regard.

The Management Board anticipates a slight decline in revenue to just over EUR 460 million for the financial year 2023, i.e. EUR 440 million after deduction of electricity price caps (2022: EUR 487.3 million and EUR 462.5 million after deduction of electricity price caps). Operating EBITDA*) is expected to exceed EUR 310 million (2022: EUR 350.0 million). The Group expects an operating EBIT*) of more than EUR 185 million (2022: EUR 198.3 million). Concerning the operating cash flow the Group expects more than EUR 280 million (2022: EUR 327.2 million) and therefore operating cash flow per share of more than EUR 1.70 (2022: EUR 2.04). Operating earnings per share*) are expected to exceed EUR 0.60 and thus slightly exceed the previous year's figure (2022: EUR 0.60). Overall, the Group remains firmly on its growth trajectory.

*) Explanations and derivation of the adjusted operating profit figures can be found in the Annual Report / Consolidated Financial Statements 2022 of Encavis AG starting on page 16 and on page 33.

The Annual Report / Consolidated Financial Statements 2022 of Encavis AG is available at:

https://www.encavis.com/Dokumente/IR/Publikationen/Encavis%20AG/Gesch%C3%A4ftsjahr%202022/20230328-Encavis-Geschaeftsbericht2022-EN.pdf

About ENCAVIS:
The Encavis AG (Prime Standard; ISIN: DE0006095003; ticker symbol: ECV) is a producer of electricity from Renewable Energies listed on the MDAX of Deutsche Börse AG. As one of the leading independent power producers (IPP), ENCAVIS acquires and operates (onshore) wind farms and solar parks in twelve European countries. The plants for sustainable energy production generate stable yields through guaranteed feed-in tariffs (FIT) or long-term power purchase agreements (PPA). The Encavis Group's total generation capacity currently adds up to more than 3.5 gigawatts (GW), of which more than 2.1 GW belongs to the Encavis AG, which corresponds to a total saving of around 0.8 million tonnes of CO₂ per year stand-alone for the Encavis AG.

Within the Encavis Group, Encavis Asset Management AG offers fund services to institutional investors. Another Group member company is Stern Energy S.p.A., based in Parma, Italy, a specialised provider of technical services for the installation, operation, maintenance, revamping and repowering of photovoltaic systems across Europe.

ENCAVIS is a signatory of the UN Global Compact as well as of the UN PRI network. Encavis AG's environmental, social and governance performance has been awarded by two of the world's leading ESG rating agencies. MSCI ESG Ratings awarded the corporate ESG performance with their “A” level and ISS ESG with their “Prime” label.

Additional information can be found on www.encavis.com 

Contact:
ENCAVIS AG
Jörg Peters
Head of Corporate Communications & Investor Relations
Tel.: + 49 40 37 85 62 242
E-Mail: joerg.peters@encavis.com
http://www.encavis.com