Greenvolt - Energias Renováveis (GVOLT) Q2 2024 earnings summary

Executive summary

• Renewable energy demand is rising, with distributed generation (DG) and storage gaining importance due to permitting bottlenecks and system flexibility needs.

• The project pipeline expanded to 9.3 GW, with 3.6 GW Ready to Build and expectations to reach over 6 GW by 2025; major storage projects are underway in Poland, Hungary, and the UK.

• KKR became the largest shareholder, holding over 80% after converting €200M in convertible bonds, strengthening equity and enabling new growth opportunities.

• 1H24 saw 42% revenue growth to €188M, but EBITDA fell 40% to €26.5M due to lower UK prices, minimal asset rotation, and ramp-up costs in DG.

• Acquired Kent Renewable Energy, its second UK biomass plant, and signed agreements to sell 153 MWp of solar in Italy.

Financial highlights

• 1H24 revenues rose 42% year-over-year to €188.0M; EBITDA declined 40% to €26.5M, with a net loss of €19.0M, mainly due to lower UK biomass prices and lack of asset rotations.

• All business segments contributed to revenue growth, notably Utility-Scale, due to operational asset growth and changes in asset accounting in Poland.

• Biomass EBITDA fell 15% year-over-year, primarily from lower UK prices and plant stoppages in Portugal.

• Utility-Scale EBITDA dropped by about 49% year-over-year due to no asset rotation, partially offset by increased operational assets.

• Distributed Generation installed capacity grew 52% to 42.5 MWp, with EBITDA at -€5.7M due to ramp-up costs.

Outlook and guidance

• Stronger results are expected in the second half of 2024, with positive EBITDA and net profit anticipated, driven by asset rotations, operational performance, and DG backlog execution.

• Expects to complete three asset sales in 2024, targeting over 500 MW sold.

• Confident in achieving positive EBITDA in Distributed Generation by year-end.

• Storage profitability remains robust, with double-digit equity IRRs expected, especially in Poland and Hungary.

• Strategic focus remains on portfolio expansion and long-term value creation.