Orrön Energy (ORRON) Q2 2024 earnings summary

Executive summary

• Power generation for H1 2024 reached 456 GWh, a 20% year-over-year increase, though 10% below expectations due to weak wind, with 96% asset availability.

• The sale of the Leikanger hydropower asset for €53M in Q2 2024 generated an €11M accounting gain, halved net debt, and boosted liquidity.

• The greenfield portfolio expanded, with over 700 MW of new wind and solar opportunities in Sweden and Finland, and a total pipeline of 40 GW across five countries.

• Revenues were lower than expected due to weak electricity prices, but operational performance and expenditures were in line with guidance.

• The company is positioned for further growth, with first large-scale greenfield projects expected to reach key milestones or monetization in H2 2024.

Financial highlights

• H1 2024 proportionate EBITDA was €13M, including the Leikanger sale; Q2 EBITDA was €8M, with an €11M gain from Leikanger.

• Q2 2024 revenues were €6M (excluding Leikanger), with an achieved price of €31/MWh, down from €49/MWh in Q1 and 40% lower year-over-year.

• Net debt dropped from €91M at Q1-end to €46–47M at Q2-end, with liquidity headroom exceeding €120M and a €170M debt facility.

• H1 2024 consolidated revenue was €17.0M, nearly flat year-over-year, with EBITDA at €8.0M (up from €2.5M), including a €10.9M gain from Leikanger.

• Q2 underlying EBITDA (excluding Leikanger gain and non-cash items) was negative €3.4M due to low prices and higher costs.

Outlook and guidance

• Full-year 2024 power generation is expected between 900–1,000 GWh, depending on H2 wind conditions.

• Monetization of first greenfield projects is expected in late 2024 or early 2025, with key permitting milestones in H2 2024.

• CapEx for 2024 is expected at €14M, mainly for greenfield investments; similar levels are anticipated for 2025.

• Legal costs related to the Sudan case are forecast at €7M for 2024 and 2025.

• Long-term annual power generation forecast remains at 1,000 GWh.