| PNE AG (DE000A0JBPG2) | |||
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| 12.10.23 07:18:40 | PNE's (ETR:PNE3) investors will be pleased with their fantastic 450% return over the last five years |  |
| For many, the main point of investing in the stock market is to achieve spectacular returns. And we've seen some truly amazing gains over the years. Don't believe it? Then look at the PNE AG (ETR:PNE3) share price. It's 427% higher than it was five years ago. And this is just one example of the epic gains achieved by some long term investors. So let's assess the underlying fundamentals over the last 5 years and see if they've moved in lock-step with shareholder returns. See our latest analysis for PNE Given that PNE didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth. In the last 5 years PNE saw its revenue grow at 4.8% per year. That's not a very high growth rate considering the bottom line. So shareholders should be pretty elated with the 39% increase per year, in that time. We'll tip our hats to that, any day, but the top-line growth isn't particularly impressive when you compare it to other pre-profit companies. It's not immediately obvious to us why the market has been so enthusiastic about the stock, but a more detailed look at revenue and profit trends might reveal why shareholders are optimistic. You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values). earnings-and-revenue-growth Take a more thorough look at PNE's financial health with this freereport on its balance sheet. What About Dividends? As well as measuring the share price return, investors should also consider the total shareholder return (TSR). The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for PNE the TSR over the last 5 years was 450%, which is better than the share price return mentioned above. The dividends paid by the company have thusly boosted the total shareholder return. Story continues A Different Perspective Investors in PNE had a tough year, with a total loss of 28% (including dividends), against a market gain of about 21%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Longer term investors wouldn't be so upset, since they would have made 41%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Take risks, for example - PNE has 1 warning sign we think you should be aware of. For those who like to find winning investments this freelist of growing companies with recent insider purchasing, could be just the ticket. Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on German exchanges. Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. |
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| 13.08.23 06:33:40 | Returns On Capital At PNE (ETR:PNE3) Paint A Concerning Picture |  |
| If we want to find a potential multi-bagger, often there are underlying trends that can provide clues. Firstly, we'd want to identify a growing return on capital employed (ROCE) and then alongside that, an ever-increasing base of capital employed. If you see this, it typically means it's a company with a great business model and plenty of profitable reinvestment opportunities. However, after investigating PNE (ETR:PNE3), we don't think it's current trends fit the mold of a multi-bagger. What Is Return On Capital Employed (ROCE)? Just to clarify if you're unsure, ROCE is a metric for evaluating how much pre-tax income (in percentage terms) a company earns on the capital invested in its business. To calculate this metric for PNE, this is the formula: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.0073 = €5.9m ÷ (€939m - €132m) (Based on the trailing twelve months to June 2023). Therefore, PNE has an ROCE of 0.7%. In absolute terms, that's a low return and it also under-performs the Electrical industry average of 14%. Check out our latest analysis for PNE roce Above you can see how the current ROCE for PNE compares to its prior returns on capital, but there's only so much you can tell from the past. If you'd like, you can check out the forecasts from the analysts covering PNE here for free. So How Is PNE's ROCE Trending? In terms of PNE's historical ROCE movements, the trend isn't fantastic. To be more specific, ROCE has fallen from 7.8% over the last five years. On the other hand, the company has been employing more capital without a corresponding improvement in sales in the last year, which could suggest these investments are longer term plays. It's worth keeping an eye on the company's earnings from here on to see if these investments do end up contributing to the bottom line. The Bottom Line Bringing it all together, while we're somewhat encouraged by PNE's reinvestment in its own business, we're aware that returns are shrinking. Yet to long term shareholders the stock has gifted them an incredible 452% return in the last five years, so the market appears to be rosy about its future. Ultimately, if the underlying trends persist, we wouldn't hold our breath on it being a multi-bagger going forward. Story continues PNE does have some risks though, and we've spotted 1 warning sign for PNE that you might be interested in. If you want to search for solid companies with great earnings, check out this freelist of companies with good balance sheets and impressive returns on equity. Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. |
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| 31.03.23 04:25:06 | PNE Full Year 2022 Earnings: Beats Expectations | |
| PNE (ETR:PNE3) Full Year 2022 Results Key Financial Results Revenue: €131.7m (up 12% from FY 2021). Net income: €14.9m (down 41% from FY 2021). Profit margin: 11% (down from 21% in FY 2021). The decrease in margin was driven by higher expenses. EPS: €0.20 (down from €0.33 in FY 2021). earnings-and-revenue-growth All figures shown in the chart above are for the trailing 12 month (TTM) period PNE Revenues and Earnings Beat Expectations Revenue exceeded analyst estimates by 6.0%. Earnings per share (EPS) also surpassed analyst estimates by 43%. Looking ahead, revenue is forecast to grow 20% p.a. on average during the next 3 years, compared to a 8.5% growth forecast for the Electrical industry in Germany. Performance of the German Electrical industry. The company's shares are down 3.0% from a week ago. Risk Analysis Before you take the next step you should know about the 3 warning signs for PNE (2 are concerning!) that we have uncovered. Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Join A Paid User Research Session You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here |
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| 24.06.20 12:26:40 | Edited Transcript of PNE3.DE earnings conference call or presentation 13-May-20 8:00am GMT | |
| Q1 2020 PNE AG Earnings Call Cuxhaven Jun 24, 2020 (Thomson StreetEvents) -- Edited Transcript of PNE AG earnings conference call or presentation Wednesday, May 13, 2020 at 8:00:00am GMT TEXT version of Transcript ================================================================================ Corporate Participants ================================================================================ * Markus Lesser PNE AG - Chairman of Management Board & CEO ================================================================================ Conference Call Participants ================================================================================ * Holger Steffen SMC Research - Analyst * Jan Bauer Warburg Research GmbH - Analyst * Karsten Von Blumenthal First Berlin Equity Research GmbH - Senior Analyst of Cleantech * Laura Lopez Pineda Baader-Helvea Equity Research - Analyst ================================================================================ Presentation -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- Dear ladies and gentlemen, welcome to the analyst conference call of PNE AG. At our customer's request, this conference will be recorded. (Operator Instructions) May I now hand you over to Markus Lesser, CEO, who will lead you through this conference. Please go ahead, sir. -------------------------------------------------------------------------------- Markus Lesser, PNE AG - Chairman of Management Board & CEO [2] -------------------------------------------------------------------------------- Good morning, everyone, also from my side. Thank you for joining us today in this conference call on the results of the first quarter 2020. As usual, I will start with an overview of the operational and strategic highlights of the first quarter. After that, I will comment on our Q1 financial figures. I will conclude my presentation with our outlook for the remainder of the year. As always, we will then open the line for the sell-side analysts only. All other participants will stay in listen-only mode as it is our company procedure for years. As usual, our slides that I will use can be found on our Investor Relations website. Yes, having said this, let's look to the operational overview. This quarter is one quarter where we have made a lot of success in operational ways. We started construction or put in operation 80.5 megawatts. That means we had, if you have in mind, with the corona issue over the past weeks and months, we had to adjust an extraordinary situation. The global corona pandemic and the associated restrictions have shared everyday life and changed economic conditions. We responded to this threat with a large number of measures, and the majority of our staff have worked from home. That this has been working is shown by the fact that business in the first quarter developed as planned. And you can see we have tender successes. We put projects into operation. We started construction. We have still 283.5 megawatts under construction. Scale Up, its implementation is fully on track. And so you can see even the PV pipeline expanded further in Germany. So in total, we have the usual business in this respect. In the moment, we prepare some final application for approval for 3 further wind farm projects. We completed them in the last recent weeks. So therefore, in this respect, we're still working efficient even in corona times. If we look to the financial highlights, we can see we are fully on target. While Q1 is usually a rather weak quarter for us, 2020 marks one of the best first quarters in the last 10 years of our company, only exceeded by last year record quarter. And I think this is remarkable because you see in the year-over-year overview that we have minus 43% in the total output and in the EBIT, minus 46%. But having in mind that, that was the best quarter last year we had ever in the last 10 years. So that means if you look to the EBITDA, where we have an amount on the last year quarters level, which is the second best result in the last 10 years. From that point of view, we are satisfied with this quarter. And we have a strong growth in service and power generation segments. We have still a very high cash position. It increases to EUR 123.2 million. And this leads to an equity ratio at approximately 38%. The guidance we gave already EBITDA, EUR 15 million to EUR 20 million, EBIT, EUR 5 million to EUR 10 million, we still confirm that. Having in mind that the corona crisis is not under control in total, as of today, we assume that there may be a shift in our operating business as regards to sale of project rights and project implementation from 2020 to 2021 and from 2021 to 2026 -- 2022. That has been taken into consideration in our guidance. I think this is -- we have to say that this is around 3-month shift in total we have in mind. As of today, we, however, assume that there will be no significant impact on our businesses in the medium or -- to long term. And you can see the good liquidity position gives the company sufficient leeway to be able to cope well with longer-term restrictions. We -- on the next slide, we can see our own power generation. Most of the German projects, we will bring -- which we will construct this year. And then next year's will be a part of this power generation portfolio. We stated already that we extend our strategy in this respect. And in the moment, we are at a level of 130.1 megawatts. Our pipeline is still on a high level with 5.1 gigawatts. If you add PV, then we are above 5.2 gigawatts, which is still on a high level. We have to see that in this environment of corona in Germany and in other countries, the permitting process slows down a little bit due to the governmental authorities response times and some regulation forms we have to fulfill. We have, for example, we have to give a public view on the project, which is not possible in the moment in this respect, but we think in -- that will be solved in the next couple of weeks. So in Sweden, we are still working on a construction management of Malarberget, 130 megawatts. In Poland. the construction of Barwice is completed, and we're still working on one of the biggest projects in Poland. I think it's the biggest project with 132 megawatts. We decided to step out of the Bulgaria and Hungary business due to the fact that we -- since we don't see any further development in terms of renewable energies. This is an effect of around about EUR 40,000 to EUR 50,000 of cost reduction per year. So we decided to step out and not to spend more money on this. The project pipeline is growing. It's another 9-megawatt peak in Germany. We have had to add it in the first phases. We still working on a bigger, much bigger pipeline, and we think in the next coming quarters, we will see a higher megawatt amount here in the first stage. We have positive operating results. The earnings driven by -- mainly by the general contractor and project development services for own wind farms and services provided to external wind farms from power generation and service and investments related to the expansion of power generations. So I always spoke about this, we are on a high level in EBITDA. We are -- the financial results are impacted by the valuation of interest swaps, minus EUR 1.5 million. This is something related to our -- to secure our results and our interest rates. If you look to the next page, you can see that due to the consolidation, it cannot be shown how strong the segments are increasing. And this is what we can see now and can show now that we have strong results in each segment. If we run through project development, the EBITDA decreases only slightly in opposite to the last year to EUR 4.8 million with minus 7%. In services, we have -- we are on the same level as last year, EUR 1.1 million. In electricity generation, we had an increase of an EBITDA of 71% to EUR 7.1 million. That shows that we are, related to segments, still on plan. Balance sheet remains rock solid. That is the main headline. And that's right, we have a big cash position of EUR 123.2 million. We have a very solid equity ratio of 38%. The liability to banks are in an amount of EUR 133.8 million, which are mainly project financing, non-recourse for project financing driven. And due to the fact that we have now IFRS 16 leasing, we have now liabilities from leasing contracts, which leads to EUR 43 million out of this. And in the current liabilities, we are in the range of EUR 20.1 million in this respect. All of -- or most of this, again, are project financing, nonrecourse project financing liabilities. In Scale Up, we are still on track. We have -- we changed the wording in 2020 further because we wrote instead of starting -- finalizing wind farm portfolio 2020, we now write start of expansion of own generation power portfolio due to the extension of our strategy in this respect. The ongoing expansion of our own generation power portfolio for the further years is also changed in this respect. Target is to have 2023 500 megawatts in own power generation portfolio in operations. Outlook for the financial year 2020. First of all, the Annual General meeting takes place on May 20, so next week at a virtual general meeting due to corona crisis. So next week at this time we will start with the AGM. So we are still having a high number of megawatts under construction. We're working on our pipeline and try to increase it. And if you look to the Phase III, so for the projects which are in the permitting stages, we are on a high level. We still invest in our own portfolio and in our Scale Up strategy, as we still stick in the moment and -- because we don't have other information due to the fact that we are considering 3 months prolongation and shifts in time -- in delivery times, we still stick with EBITDA of EUR 15 million to EUR 20 megawatts -- million, sorry, and EBIT of EUR 5 million to EUR 10 million. Thank you very much. Now we'll start with Q&A. ================================================================================ Questions and Answers -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- (Operator Instructions) And the first question is from Jan Bauer, Warburg Research. -------------------------------------------------------------------------------- Jan Bauer, Warburg Research GmbH - Analyst [2] -------------------------------------------------------------------------------- So I got -- first question is regarding the Polish project rights, so you still have like 19 megawatts in Phase 2. Have you any update on that, whether you can -- may sell it this year as a project right or keep it in the company? -------------------------------------------------------------------------------- Markus Lesser, PNE AG - Chairman of Management Board & CEO [3] -------------------------------------------------------------------------------- Yes at the moment, we are negotiating the wind turbine contracts or finalized negotiation of wind turbine contract for the first project. And we -- our target is to start with the construction with the first project, maybe with the second project this year. And we are in a sale process and -- in the sale process of the first project, and we hope that we -- it's a target to get the second project sold this year as well. -------------------------------------------------------------------------------- Jan Bauer, Warburg Research GmbH - Analyst [4] -------------------------------------------------------------------------------- Okay. So we can still assume that you will be able to sell those projects that there won't be any delay from coronavirus to 2021? -------------------------------------------------------------------------------- Markus Lesser, PNE AG - Chairman of Management Board & CEO [5] -------------------------------------------------------------------------------- Yes. We still see that this is always -- negotiation has sometimes to do with personal contact, and this is really always constrained on what we can see just right now. And we would -- but just right now, we are still in -- we started negotiations and it runs well for the first project. -------------------------------------------------------------------------------- Jan Bauer, Warburg Research GmbH - Analyst [6] -------------------------------------------------------------------------------- Okay. And for Gode Wind 3, you're still expecting a payment. So if you -- any update on that? -------------------------------------------------------------------------------- Markus Lesser, PNE AG - Chairman of Management Board & CEO [7] -------------------------------------------------------------------------------- Yes. So what we saw just recently, yesterday, there was a decision of the ministers of the (inaudible) countries and -- to extend the business and the build-out of offshore in Germany from 15 to 20 megawatts. We would see if this becomes a law, then it is a support for our project in Atlantis I. And we think, furthermore, that on the other side, where we still have EUR 5 million to expect, we will see what that means more or less something for next year. And related to Gode Wind, it's something where we see and depending on the decision of Ørsted when they start the construction. -------------------------------------------------------------------------------- Jan Bauer, Warburg Research GmbH - Analyst [8] -------------------------------------------------------------------------------- Okay. So in the service business, you have like quite ambitious targets you want to reach in terms of EBIT generation in the next years. So can you give us a little bit more light on what's your target for this year only from the service business? -------------------------------------------------------------------------------- Markus Lesser, PNE AG - Chairman of Management Board & CEO [9] -------------------------------------------------------------------------------- Yes, related -- the service business, one business, which is in some areas affected by corona due to the fact that we have trainings for personal in terms of rope testing and other training courses. And this has affected a little bit. So it is in the range of maybe EUR 0.5 million EBIT something like this. So -- but nevertheless, we see we are still on a good path. In terms of EBIT, we are always affected by the investments we do. And this is the reason why when we see good targets, we are going to invest. That's why I don't want to give any EBIT targets just right now for each segment because we think we are still in the phase of investing. And so therefore, I don't want to give any number on this. -------------------------------------------------------------------------------- Jan Bauer, Warburg Research GmbH - Analyst [10] -------------------------------------------------------------------------------- Okay. So one last question. So you increased your staff on project development recently. So can you give us an idea, so you raised staff to gain in higher project output in general? Or what's the aim behind it? -------------------------------------------------------------------------------- Markus Lesser, PNE AG - Chairman of Management Board & CEO [11] -------------------------------------------------------------------------------- Yes. We have different approaches. First of all, the markets -- due to our strategy, we have a wider product range. That means we need highly qualified persons related to this. For example, we talk about additional power supply management. This is absolutely -- we started with this 3 years ago. We need special forces for that. And so you see we have different new products, PV, for example. But then we are in new markets, Panama. So you see and we extend our business with hybrid. So PV wind in combination with storage. So that's where we need personal and we need highly trained and qualified project developers. So because of that, we have to extend our staff. And in -- especially, in all markets, we see that there is a high competition to get highly trained staff. So therefore, we are happy that we are -- that people come to us and want to support us. That's the bottleneck, usually, the staff and therefore, we are in good mood that we can extend our pipeline in this respect as well. -------------------------------------------------------------------------------- Operator [12] -------------------------------------------------------------------------------- The next question is from Holger Steffen, SMC Research. -------------------------------------------------------------------------------- Holger Steffen, SMC Research - Analyst [13] -------------------------------------------------------------------------------- I have some further questions about your business development. In the first quarter, you have achieved high margin in your project development business despite low external revenues, maybe you can give us some details about the profitability in this segment? -------------------------------------------------------------------------------- Markus Lesser, PNE AG - Chairman of Management Board & CEO [14] -------------------------------------------------------------------------------- Yes. It's always -- it depends on always -- if you do -- if you sell turnkey, if you do sell project rights, if you do construction management afterwards. If you sell a project, then in project rights and afterwards to construction management, you have different margins, yes? And if we have payments, for example, if Barwice is finalized, we get a fee for construction at the end. So -- and you see it depends on which case is coming up. That's why we extended the -- our pipeline overview to a column which is known as sold or under construction to give you an overview where we have construction management margins to expect, which are lower and opposite to project development fees and margins. And in this respect, we are depending all the time on, one, which payment is coming up and at which time, we relate costs to that, yes? So this is -- sometimes we have a project development, project rights to sell, and we get the first payment, then we have all costs under control. And in the last payment, you get the margin, yes? So that differs, yes. -------------------------------------------------------------------------------- Holger Steffen, SMC Research - Analyst [15] -------------------------------------------------------------------------------- Are there any contributions of internal-generated profit? Or is this profit mainly external? -------------------------------------------------------------------------------- Markus Lesser, PNE AG - Chairman of Management Board & CEO [16] -------------------------------------------------------------------------------- So the project development range is always external -- in most of the cases, external. So I have to say, internal is that what we relate to the project portfolio. So as you can -- as you know, if we would have sold it, we think about that we would have taken into consideration EUR 37.1 million as additional EBIT, yes, so this is not the case. And if you see our own portfolio, then we have an internal turnover... -------------------------------------------------------------------------------- Holger Steffen, SMC Research - Analyst [17] -------------------------------------------------------------------------------- And maybe you can give me an idea which part of this EUR 4.8 million EBITDA is internal? -------------------------------------------------------------------------------- Markus Lesser, PNE AG - Chairman of Management Board & CEO [18] -------------------------------------------------------------------------------- It's mainly driven in -- if you look to the consolidation overview, yes, then you see the consolidation amount. And this is where we deviate the internal margin. Yes. So if you look at segment... -------------------------------------------------------------------------------- Holger Steffen, SMC Research - Analyst [19] -------------------------------------------------------------------------------- It's mainly belonging to this segment with consolidation? -------------------------------------------------------------------------------- Markus Lesser, PNE AG - Chairman of Management Board & CEO [20] -------------------------------------------------------------------------------- We have the turnover and the margins in the segments, and then it comes to the consolidation, which shows what is internal and what is external, yes. So from that, what I -- and that's why I'm saying, so we had a good result in the segment, but in total, the whole company results are lower due to the consolidation of internal margin. -------------------------------------------------------------------------------- Holger Steffen, SMC Research - Analyst [21] -------------------------------------------------------------------------------- Okay. Again, your financial result is burdened by codes of interest swaps, which market development in the first quarter was responsible for this and what effect can we expect for the next quarter? -------------------------------------------------------------------------------- Markus Lesser, PNE AG - Chairman of Management Board & CEO [22] -------------------------------------------------------------------------------- So just right now, we are -- related to the swaps, we talked about EUR 3.7 million, which are related due to the fact that we have decreasing interest rates. And to secure increasing interest rate, we do the swaps. When we sell the project, it comes up. If we take it and held it on board, it -- we have to consider it. And just right now, in this quarter, there have been EUR 1.5 million due to the fact that we have decreasing interest rates in the market. And now you can expect what we will have in the next quarter. And if you know that you can say, okay, then we have an amount of EUR 1 million or EUR 2 million. But in the moment, I'm not sure that we have further decreasing interest rates. But that is something we will see when -- due to the fact what is happening in the financial markets, it may happen. Yes. -------------------------------------------------------------------------------- Holger Steffen, SMC Research - Analyst [23] -------------------------------------------------------------------------------- Okay. You didn't sell projects in the first quarter, but nevertheless, you reported an EBITDA of EUR 6.4 million and then EBIT of EUR 2.3 million. You mentioned that these are very strong results, and therefore, your guidance seems to be very conservative. Do you think we can see your range as a minimum for this year now? -------------------------------------------------------------------------------- Markus Lesser, PNE AG - Chairman of Management Board & CEO [24] -------------------------------------------------------------------------------- I have heard such questions several times, you can imagine. So we don't know what is really happening in this little bit insecure environment. I think it would be wrong to make a statement like this to EBIT and EBITDA. So we're expecting sales in different countries, yes? So that means we are depending on the development there. So therefore, we stick with this guidance, and we wouldn't say something in -- to the weight of -- on the lower end or higher end. -------------------------------------------------------------------------------- Operator [25] -------------------------------------------------------------------------------- And the next question is from Karsten Von Blumenthal, First Berlin Equity Research. -------------------------------------------------------------------------------- Karsten Von Blumenthal, First Berlin Equity Research GmbH - Senior Analyst of Cleantech [26] -------------------------------------------------------------------------------- Congratulations to the good Q1 results. In the report and in your presentation, you mentioned the preparation for approval application for 3 wind farms are concluded. Are these 3 German projects? And could you tell us how many megawatts these 3 projects have altogether? -------------------------------------------------------------------------------- Markus Lesser, PNE AG - Chairman of Management Board & CEO [27] -------------------------------------------------------------------------------- Yes, these are German projects, that I can confirm. And the amount, as you can see it on Page 4, I think, of the project -- wait a moment, please. It's round about -- no, it's not written here. You are right. So it's -- when I see to the project pipeline, I think it's around 20, 25 megawatts, as I have remarked, yes. -------------------------------------------------------------------------------- Karsten Von Blumenthal, First Berlin Equity Research GmbH - Senior Analyst of Cleantech [28] -------------------------------------------------------------------------------- 25 megawatts, roughly? -------------------------------------------------------------------------------- Markus Lesser, PNE AG - Chairman of Management Board & CEO [29] -------------------------------------------------------------------------------- Yes. -------------------------------------------------------------------------------- Karsten Von Blumenthal, First Berlin Equity Research GmbH - Senior Analyst of Cleantech [30] -------------------------------------------------------------------------------- All right. That's great. Does that mean that you have the opportunity to participate in the June's tender with these 3 projects? -------------------------------------------------------------------------------- Markus Lesser, PNE AG - Chairman of Management Board & CEO [31] -------------------------------------------------------------------------------- No. We can't confirm that due to the fact that we have to consider -- so we prepared these approvals, yes, final applications. And we -- and you have to see that we don't have the final permission in our hands. Just right now, we have -- we are in discussions, and we think that the next -- the next projects we want to go in the tenders is something in the range of July or August. And then we think this -- the first projects we can put into the tender due to the fact that we have to finalize the permission in itself. We have a permission, but we are not safe with some of them. And due to the fact that we have to consider the long-term response time of the commission authorities. So I would say that we are ready in June. I think we prepare ourselves for July, August in this respect, and then we will see. -------------------------------------------------------------------------------- Karsten Von Blumenthal, First Berlin Equity Research GmbH - Senior Analyst of Cleantech [32] -------------------------------------------------------------------------------- But with 25-megawatt in July, August, this would still be a very good result of your project development work and you have already received 14 megawatts in awards this year and participating with another 25 mid of the year shows that despite this very, very difficult German market with these very slow approval processes you get to have it quite well? -------------------------------------------------------------------------------- Markus Lesser, PNE AG - Chairman of Management Board & CEO [33] -------------------------------------------------------------------------------- Yes. We see that the permission status is rather low in the moment, yes. So in February and March, we saw that around, according to our estimation, 50 -- around 50 megawatts each month have been permitted in Germany. So this is rather low. So -- and what we -- as you can see, we have a good pipeline in Germany. We're still working hard on this to get them step-by-step into the permission status. -------------------------------------------------------------------------------- Karsten Von Blumenthal, First Berlin Equity Research GmbH - Senior Analyst of Cleantech [34] -------------------------------------------------------------------------------- Yes, agreed. In your report, you mentioned that you are winding up the business in Bulgaria and Hungary and you mentioned the cost savings. Could you repeat that figure because I didn't get it? -------------------------------------------------------------------------------- Markus Lesser, PNE AG - Chairman of Management Board & CEO [35] -------------------------------------------------------------------------------- Yes, that's EUR 40,000 to EUR 50,000 per year. -------------------------------------------------------------------------------- Karsten Von Blumenthal, First Berlin Equity Research GmbH - Senior Analyst of Cleantech [36] -------------------------------------------------------------------------------- EUR 40,000 to EUR 50,000. And do you expect winding up costs? So one-off costs you have to book and do you... -------------------------------------------------------------------------------- Markus Lesser, PNE AG - Chairman of Management Board & CEO [37] -------------------------------------------------------------------------------- No. No. No. That's -- we -- no, that's -- we are not expecting that further costs will accrue. -------------------------------------------------------------------------------- Karsten Von Blumenthal, First Berlin Equity Research GmbH - Senior Analyst of Cleantech [38] -------------------------------------------------------------------------------- Okay. Perfect. Then you just save money, fine. In the services segment, you rightly mentioned that if you look at total output, you have increased your business. But when I look at purely external sales that was a bit weaker than in the quarter of last year and you already elaborated on a bit more difficult business in some areas, so is that the reason why the external and internal sales are a bit lower? -------------------------------------------------------------------------------- Markus Lesser, PNE AG - Chairman of Management Board & CEO [39] -------------------------------------------------------------------------------- Yes, exactly. So we have one effect because of the training costs and because of -- you see we get orders for -- to -- for ropes -- rope trainings for -- training for the elevators of a wind farm and wind turbines and so on. And so everybody now, as -- I said before, now shifted this kind of orders for 2 months. And now we start again. Since last week, we have the increasing order income in this respect, and that's why we have a slightly shift of the orders. And these are trainings and the orders we have related to the testing of blades and elevators are tested, which has to be done. So therefore, we don't see that we can -- we think that we will still get all orders during the year. -------------------------------------------------------------------------------- Operator [40] -------------------------------------------------------------------------------- There are currently no further questions. (Operator Instructions) And the next question is from Laura Lopez, Baader-Helvea. -------------------------------------------------------------------------------- Laura Lopez Pineda, Baader-Helvea Equity Research - Analyst [41] -------------------------------------------------------------------------------- I have a couple of questions. Your material costs are rather low in the first quarter, I can imagine this is also part of some delays in the construction market. Can you maybe also elaborate a little bit how the supply chain is developing? I think in the full year conference call that what was also mentioned as a risk, it's not only the permit, but also the general supply chain being pushed back a little bit. So maybe how is that developing? And then maybe coming back to Bulgaria and Hungary, you did mention the unfavorable market conditions in those markets. Did this actually accelerated with the current COVID situation? And do you see a risk for other regions where you might be active at the moment for something like that as well to happen? -------------------------------------------------------------------------------- Markus Lesser, PNE AG - Chairman of Management Board & CEO [42] -------------------------------------------------------------------------------- Okay. First of all, the delivery situation. Mainly our projects we planned, we will start construction in the third and fourth quarter this year. So that's why we are not that much affected on delivery issues, which are happening just right now. In Poland and Sweden, we have already wind turbines in place. So therefore, we do the construction management there only. We are not affected by any delivery shifts. So therefore, there is no risk for us. But we don't see a big delivery shift in the moment. The delivery of -- in upcoming months and the next year, as I said before, we start construction of a lot of projects at the third, fourth quarter. And this looks as usual. But we see that there are a lot of warnings from manufacturers that they say, "Okay, we don't have an overview about the situation of deliveries out of China and it might cause delays." But just right now, as I said before, we are not affected at the moment. And for the next year, we see this -- we see it in different markets that differs a little bit. But in the moment, we hear -- heed the warnings, and we consider them in our plans, in delivery plans and construction plans, but we don't have just right now something on our desk in this respect. Related to corona crisis in Bulgaria and Hungary, no, it has nothing to do with corona crisis. It has something to do what the government wants in respect to renewable and climatic change and renewable energy increase. And since years, they do nothing to support this. And now we have -- we don't want to spend more costs on this. We don't have trust that these kind of -- this government will change anything. So -- and on the other side, corona, we are in 12 markets just right now, and we see that the action differs. And -- but just right now since Monday, our office in France runs again, not anymore home office there. So -- and our office in United States is still affected in this respect that they do home office. In Poland, they do home office and want to start very soon. So it differs from country to country. In Turkey, it's home office, and they will stay in home office for minimum 2 weeks. And so it differs from country to country, but we are mainly driven by -- we can work home and can do a good home office. We have to instrument the tools and everything in our hands, and we see that we are in good shape to do this business as well in home office for a recent time. -------------------------------------------------------------------------------- Operator [43] -------------------------------------------------------------------------------- There are currently no further questions, I'll hand back to the speaker for closing remarks. -------------------------------------------------------------------------------- Markus Lesser, PNE AG - Chairman of Management Board & CEO [44] -------------------------------------------------------------------------------- Yes, then, thank you very much for your interest, and we go ahead with our business. Thank you. -------------------------------------------------------------------------------- Operator [45] -------------------------------------------------------------------------------- Ladies and gentlemen, thank you for your attendance. This call has been concluded. | ||
| 06.04.20 04:27:44 | Edited Transcript of PNE3.DE earnings conference call or presentation 31-Mar-20 8:00am GMT | |
| Full Year 2019 PNE AG Earnings Call Cuxhaven Apr 6, 2020 (Thomson StreetEvents) -- Edited Transcript of PNE AG earnings conference call or presentation Tuesday, March 31, 2020 at 8:00:00am GMT TEXT version of Transcript ================================================================================ Corporate Participants ================================================================================ * Markus Lesser PNE AG - Chairman of Management Board & CEO ================================================================================ Conference Call Participants ================================================================================ * Holger Steffen SMC Research - Analyst * Jan Bauer Warburg Research GmbH - Analyst * Karsten Von Blumenthal First Berlin Equity Research GmbH - Senior Analyst of Cleantech * Laura Lopez Pineda Baader-Helvea Equity Research - Analyst ================================================================================ Presentation -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- Dear, ladies and gentlemen, welcome to the analyst conference call of PNE AG. At our customers' request, this conference will be recorded. (Operator Instructions) May I now hand you over to Markus Lesser, CEO, who will lead you through this conference. Please go ahead. -------------------------------------------------------------------------------- Markus Lesser, PNE AG - Chairman of Management Board & CEO [2] -------------------------------------------------------------------------------- Good morning, everybody. This time out of my home office, I would like to show you the numbers of the fiscal year 2019. Thank you for joining today. Before I start with the presentation, I would like to share with you an outline of the presentation and the procedures of today's call. I will start with an overview of the operational and strategic highlights of the fiscal year 2019, followed by the status of the voluntary public takeover offer by Morgan Stanley Infrastructure Partners. After that, I will comment on our full year figures. I will conclude my presentation with our outlook for the remainder of the year and on the strategy going forward. As always, we will then open the line for the sell-side analysts only. All other participants will stay in listen-only mode, as it is our company's procedure for years. As usual, our slides that I will use can be found on our Investor Relations website. Starting with Page 3, you can see that we had a favorable year with 450.8 megawatts of wind onshore projects sold, put into the operation or started construction. This is the highest amount ever PNE has developed. For us, it is driven also by Scale Up and internationalization. You can imagine, when we started this strategy in 2017, then we talked about processes and to optimize our organizations which we did in this time. So that means all internal processes are in place. We have all companies in one organization line, which now we see as one result that the efficiency has grown. With -- and with teams and together with the processes, this has really in this special situation where we are working on home offices. In 1 day only, we moved the company into home offices and it runs very well. We also expanded our -- in terms of Scale Up. And our strategy is to be a clean energy solution provider, our PV pipeline, and we internationalized our service businesses to Poland, France and Sweden. Additionally, we just decided not to sell our -- sale of the Wind Farm Portfolio 2020. Instead of that, we would like to do the expansion of our own generation portfolio up to 500 megawatts by 2023. I will come back to this. This all leads to numbers, which are on the higher end of our guidance, although we slightly exceeded. You see the EBIT is at EUR 19 million and the EBITDA at EUR 31.6 million. This is -- EBIT guidance has been EUR 15 million to EUR 20 million; EBITDA guidance, EUR 25 million to EUR 30 million. Therefore, together with the other numbers, which I will show you afterwards, we suggested Supervisory Board and Board suggested to come up with the dividend and for the AGM for EUR 0.04 per share. If you look to the next page, Page 5, 2 weeks ago, we had announced that we will expand our own power generation portfolio and not continue the sale of our Wind Farm Portfolio 2020. The comfortable liquidity situation and the significantly increased project volume open up new opportunities for the PNE group. Changed framework conditions and favorable financing options have supported this decision. The Management Board and Supervisory Board of PNE AG have, therefore, decided to strengthen the internal operation of wind farms. This is intended to do -- to further consolidate sales and earnings, as already envisaged in our strategy with the Scale Up concept. This can now be done earlier than planned. The wind farm that has been developed and are already being operated as part of the Wind Farm Portfolio 2020 will be retained in the company's own portfolio and operated by the company itself. The sale of the wind farms in portfolio will, therefore, not be pursued further. With the decision to strengthen our in-house wind farm operations, we are consistently implementing the strategy orientation of the PNE group. This is intended to further increase sales and earnings as already envisaged in our strategy with the Scale Up concept and to reduce the usual fluctuations inherent in project development. These can now be realized earlier than originally planned. We will retain the wind farms that have been developed, built and already operated as part of the Wind Farm Portfolio 2020 in our in-house operations, manage them ourselves and benefit from regular income from electricity generation. PNE currently operates wind farms with an installed nominal capacity of 130.1 megawatt itself. This also includes the projects that were previously earmarked for the planned portfolio. The plans are to expand the portfolio of internally operated projects primarily in Germany to up to 500 megawatts by the end of 2023. With these efforts now, we came in the year 2018 from 76.9 megawatts, and we are now -- have a portfolio currently at 130.1 megawatts. The aim is also to achieve the medium-term EBIT target of EUR 38 million to EUR 44 million until 2023. Just right now, the power generation total output is at EUR 90.4 million in the fiscal year 2019. On the next page, a short overview about the voluntary public takeover offer of Morgan Stanley Infrastructure Partners. The entry of a new major shareholder into the company share register beginning this year was a particular event for us as Board of Management, but also to the Supervisory Board during 2019. Photon Management GmbH, a member of Morgan Stanley Infrastructure Partners Group, submitted a voluntary public takeover offer to PNE shareholders at the end of October 2019 and now holds roughly 40% of the shares. The circumstances of this voluntary public takeover offer I presented the last time. Coming back to the operational business. We could increase the pipeline projects to 5,235 megawatts. As you see the table, we now have a column, a new column, which was -- which is known as -- which is shown as sold to services. This means sold but construction management services by PNE because we have often the projects sold already, and then we do the construction management and that's what we wanted to show -- to give you a better overview and the analyst a better overview. In the last year, we had to face some delays in the permitting process in Germany. Nevertheless, we could construct and finalize Gerdau-Repowering, Schlenzer, Kittlitz, Neuenwalde and Wölsickendorf. So this is which was sold last year. Project in France, project Laperrière. We sold projects in Sweden, Malarberget and Laxaskogen, which was -- the last project, which was completed last year. And the biggest project in Poland, Jasna, 132 megawatts, was sold to Stadtwerke München and will be finalized end of -- beginning of 2021. We made a construction management for Barwice, 42 megawatts, which is finalized now. And in Panama, we acquired 5 projects with an amount of 352 megawatts. We sold a project in the United States with Burleigh. Remarkable is that we have in Germany and France, a total amount of 622 megawatts in Phase 3. This is the biggest amount ever we had in this phase despite the delays in the permitting process. We think this is a good basis for the future business. On the next page, the first time we can show the project pipeline PV, with an amount of 123 megawatts, which we have in the Phase 1 to 2 in Germany, Romania and United States. You see that we are working on this. In the moment, we think about projects in Germany, France, Italy, Romania and United States for PV. And we're working on numerous projects on this, and we think that we can increase this amount by far in this year. We will look to the next page to the results. The total output has increased. The EBITDA has increased, the EBIT has increased. So everywhere, we have a strong increase if you take the numbers of 2019 opposite to 2018, with the total output from EUR 174 million and EBITDA of EUR 31.6 million and an EBIT of EUR 19 million. This was mainly driven by the project sales in Poland and Sweden and a bigger project in Germany called Wölsickendorf. As well, the first time we saw a big amount of the results from the power generation, and additional, we see that services increased turnover as well. We have to consider that financial results burdened by higher interest expenses due to valuation of interest rate swaps by an amount of EUR 4.3 million. Looking to the segments. We see those all segments increased their earnings as well and their turnover. So if you look to the project development, the output grows to EUR 154.4 million, which is a plus of 57%, and EBITDA grows to EUR 25.5 million, 221% opposite to 2018. The service output grows to EUR 18.4 million, with a plus of 55%. EBITDA increases to EUR 5.2 million. Electricity generation, the output increases to EUR 19.4 million, which is plus 6%. This is -- the EBITDA increases slightly. This was special situation because we have a one-off effect -- we had a one-off effect of EUR 4.2 million last year. So if you wouldn't consider this in this amount, then you could see that we could increase the output by far. But what you can see, we see more and more that EBITDA will be our future factor of what we have to look at because of the high depreciation. The balance sheet remains rock solid. It's the title of this page, and this is as well shown in a good cash position. We have still EUR 111.9 million as a cash position, which is very solid and is very helpful just right now. Especially in this coronavirus times, it's good to have this good cash position in place. The equity ratio is solid at 39%. You see due to the investments in the portfolio, the liability to banks increased to EUR 135.6 million, which is mainly project financing, which is nonrecourse. And you see the impact of the IFRS 16 leases with liabilities from leasing contracts, right of use, we had to add EUR 37.2 million. The current liabilities are projects under construction and we see there -- that there are many projects financing as well nonrecourse projects. Looking to the next page, you see that we have our process of scale up. I already mentioned it, that we are full in plan with one exception which we have to change, the sale of the 200-megawatt portfolio share will not be done and start of the buildup of the next portfolio for the next year will not be done as well. This will be all projects for our own portfolio, and this will be changed. This is the extension of the strategy we placed already in 2017. If we look to the outlook, we have to look also, I think, in general, where we have to say something about the coronavirus. The topic of the last week had undoubtedly been the coronavirus. For us, even if we have to be very optimistic, we can't oversee the possible consequences for society and market resulted -- resulting from the current development concerning the spread of the COVID-19 virus. We respond to this threat with a large number of measures to protect employees. As you heard already, everybody is in home office just right now, but also to safeguard the implementation of projects as well as supplies, at the time of publication of the 2019 annual financial statement in March 2020, we assumed that there may be shifts in our operating business as regards the sale of project rights and project implementation from 2020 to 2021 and from 2021 to 2022. And that there will be no significant impact on our business in the medium to long term. The good liquidity positions gives the company sufficient leeway to be able to cope well with longer-term restrictions. And we have to say, in general, I think the climatic change issue is in a moment not in the first row, but I think it will come back very soon because the first time we see what may happen if the whole world is impacted by one event. And renewable energy will be -- therefore, have a good future as well. So what will we do in the next time and this year? Increase our own generation portfolio, as already mentioned. We see a high project activity. We've a lot of megawatts under construction, 311 megawatts. We have a very good filled pipeline. And we see that we can expand in new markets and see opportunities there as well and in services according to our Scale Up milestones. Therefore, we see a guidance from EBITDA of EUR 15 million to EUR 20 million and an EBIT of EUR 5 million to EUR 10 million. In this number, we consider a delay of 3 months due to coronavirus, delay in deliveries or in anything what can support construction or permissions. Ladies and gentlemen, this concludes my presentation. Thank you for your attention. We are now open for questions. ================================================================================ Questions and Answers -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- (Operator Instructions) The first question we have is from the line of Karsten Von Blumenthal from Equity Research. -------------------------------------------------------------------------------- Karsten Von Blumenthal, First Berlin Equity Research GmbH - Senior Analyst of Cleantech [2] -------------------------------------------------------------------------------- Karsten Von Blumenthal from First Berlin. Markus, greetings from home office, too. I hope and I hear that you are well, that is good to hear. Of course, everything is at the moment focused on the pandemic and you have already explained that you are carefully guiding for the year. What I would like to know because I had to look at the Bundesnetzagentur this morning regarding the March tender results, and they do not -- they do no longer publish it. So my question is, did you win anything in the tender? Did you take part in the March tender? Or what was the result for you there? -------------------------------------------------------------------------------- Markus Lesser, PNE AG - Chairman of Management Board & CEO [3] -------------------------------------------------------------------------------- No, we didn't come up with a project in this tender. The last tender, we had been successful with 2 projects of around 14 megawatts. This time, we haven't been in the tender. -------------------------------------------------------------------------------- Karsten Von Blumenthal, First Berlin Equity Research GmbH - Senior Analyst of Cleantech [4] -------------------------------------------------------------------------------- Okay. When I remember rightly, you have 58 megawatts of award German projects, which you can build now. Could you -- do you already know how many of these projects or how many megawatts will be added to the own planned portfolio? All the projects or certain percentage, do you also plan to sell? This is, of course, important for us analysts because we have to -- an idea -- we have to get an idea of the split between projects sold and projects added to the own planned portfolio? -------------------------------------------------------------------------------- Markus Lesser, PNE AG - Chairman of Management Board & CEO [5] -------------------------------------------------------------------------------- Sure. Let me summarize it. In the moment, we have projects in France, Poland, Sweden, United States, Italy, Romania, South Africa, where we would like to -- where we are in the stage that -- we are nearly in the stage of ready to be built, so that they can be sold. So -- and we think this amount is enough to confirm our guidance or to get our guidance. And the portfolio in the moment of around 60 megawatts should be a part of our own portfolio. -------------------------------------------------------------------------------- Karsten Von Blumenthal, First Berlin Equity Research GmbH - Senior Analyst of Cleantech [6] -------------------------------------------------------------------------------- All right. That is very helpful. Do you expect to complete the 58-megawatt this year, probably not everything, do you have an idea how many of the projects could be completed by the end of the year? -------------------------------------------------------------------------------- Markus Lesser, PNE AG - Chairman of Management Board & CEO [7] -------------------------------------------------------------------------------- Yes, this is especially in this moment, difficult to say. Just right now, we see that permitting procedures runs in the right direction. Everybody is working. But you see that this goes slower. But secondly, we have to see and have to face that the deliveries of the machines can be delayed. So in a moment, we can't say if we can get them done all this year. What I can say, we are going to start construction this year of all these projects. And in this turmoil, that's what I can confirm. -------------------------------------------------------------------------------- Karsten Von Blumenthal, First Berlin Equity Research GmbH - Senior Analyst of Cleantech [8] -------------------------------------------------------------------------------- All right. That is already helpful. When I look into your service business, you increased external sales significantly, of course, because you also purchased a few companies, but now you have roughly EUR 16 million in external sales. For the coming -- for this year, 2020, do you have a rough idea will the service business grow further this year? Or due to corona, do you expect it to be stable? And in the medium term, what do you think is the normal EBIT margin for the service business? -------------------------------------------------------------------------------- Markus Lesser, PNE AG - Chairman of Management Board & CEO [9] -------------------------------------------------------------------------------- Yes, the numbers -- our numbers which have -- which are mixed numbers because it's numbers where we have -- do construction management, where we do financial management, we do commercial management, operational management and we offer new products to the market. So in any case, we would like to increase the business this year. In terms of EBIT, we can't say just right now that we can increase it that -- in the moment due to the fact that we maybe will invest in some companies. So this is -- for us, you see the EBITDA is at 29%. And this is an amount we think is an amount which we can increase. But just right now, we are there where we are. And you have always to see integration restructuring costs. If you look to the EBIT, it's always an issue. -------------------------------------------------------------------------------- Karsten Von Blumenthal, First Berlin Equity Research GmbH - Senior Analyst of Cleantech [10] -------------------------------------------------------------------------------- Yes, fully understood. But do you have an idea in the medium term, say, in 3 years? -------------------------------------------------------------------------------- Markus Lesser, PNE AG - Chairman of Management Board & CEO [11] -------------------------------------------------------------------------------- Yes, we -- our target is between 15% and 20% for the EBIT. It's our target. And maybe if we do the right investments, we can increase this as well. -------------------------------------------------------------------------------- Operator [12] -------------------------------------------------------------------------------- The next question we have is from the line of Holger Steffen from SMC Research. -------------------------------------------------------------------------------- Holger Steffen, SMC Research - Analyst [13] -------------------------------------------------------------------------------- I have some additional questions. So as far as you have reported, you have changed your strategy and will expand your portfolio to 500-megawatt until 2023. What's your projected budget for these investments? And what are the plans for funding? -------------------------------------------------------------------------------- Markus Lesser, PNE AG - Chairman of Management Board & CEO [14] -------------------------------------------------------------------------------- Yes, let's take an example. Just right now, if we think about 400 megawatts and you see an investment of roundabout invest costs of EUR 560 million to EUR 720 million, you have a split of 20% equity to 80% usual debt cost and we have then a split of 20% to 80% of -- if you do look to the equity, we have then an equity need of EUR 112 million to EUR 144 million. This is the calculation. So this gives you a rough idea. So that means it might happen that we look to additional financing and -- but we don't need anything just right now and this year. -------------------------------------------------------------------------------- Holger Steffen, SMC Research - Analyst [15] -------------------------------------------------------------------------------- Okay. One question about the former pipeline sale in Great Britain. You've mentioned in your annual report that likelihood of milestone payments in Great Britain has fallen significantly. It's the most probable case now that you will get no further payments? -------------------------------------------------------------------------------- Markus Lesser, PNE AG - Chairman of Management Board & CEO [16] -------------------------------------------------------------------------------- Yes, in our calculations, which we have for the guidance, there is no earnings out of this portfolio sale included. -------------------------------------------------------------------------------- Holger Steffen, SMC Research - Analyst [17] -------------------------------------------------------------------------------- Okay. And do you think in 2021, that this would be the last year to get some payments? -------------------------------------------------------------------------------- Markus Lesser, PNE AG - Chairman of Management Board & CEO [18] -------------------------------------------------------------------------------- To be honest, in our budget, we don't included it. Don't include, yes, maybe don't include it. -------------------------------------------------------------------------------- Holger Steffen, SMC Research - Analyst [19] -------------------------------------------------------------------------------- Okay. One other question about the pipeline. Can you give us a project update about Chilocco in the U.S.A.? And the -- you had plans to sell it last year. I think you must sell it this year. Is it still possible? -------------------------------------------------------------------------------- Markus Lesser, PNE AG - Chairman of Management Board & CEO [20] -------------------------------------------------------------------------------- Yes, we are -- we went through several stages with the Chilocco project like the United States market. We have very low cost of energy there due to fracking. And so we had to restructure the Chilocco project with more efficient machines. There, we needed some time for. Just right now, we are again in the sale process with -- and we have some interesting negotiations. -------------------------------------------------------------------------------- Holger Steffen, SMC Research - Analyst [21] -------------------------------------------------------------------------------- Okay. That's fine. In your annual report, you've mentioned too that the seller of the project in Poland has to fulfill conditions to finalize the transaction. Because of this, you didn't add 2 projects, which were already successful in the December tender to your pipeline. What's the actual situation regarding the fulfillment of the conditions? -------------------------------------------------------------------------------- Markus Lesser, PNE AG - Chairman of Management Board & CEO [22] -------------------------------------------------------------------------------- Yes, these projects, after 1 year working very hard on acquiring projects, we could acquire them slightly in front of the tender in Poland. So it was 1 week in front of that. So we made contracts, and these contracts had -- for these contracts, we had to fulfill some conditions. These conditions are now conditions which we are responsible for to fulfill. So therefore, we have direct access to this project. And the first of the project with 19 megawatts, we would like to construct and start construction this year. The next 2, we plan the construction in 2021. -------------------------------------------------------------------------------- Holger Steffen, SMC Research - Analyst [23] -------------------------------------------------------------------------------- So you have secured that 2 additional projects. -------------------------------------------------------------------------------- Markus Lesser, PNE AG - Chairman of Management Board & CEO [24] -------------------------------------------------------------------------------- Yes. Yes, we have secured them, but we have to finalize something, which are mainly formal things, yes. -------------------------------------------------------------------------------- Holger Steffen, SMC Research - Analyst [25] -------------------------------------------------------------------------------- Okay. Good. And in your outlook, you have expected a positive EBIT between EUR 50 million and EUR 60 million for PNE AG in this year. Maybe you could give us a short explanation about this topic? -------------------------------------------------------------------------------- Markus Lesser, PNE AG - Chairman of Management Board & CEO [26] -------------------------------------------------------------------------------- For PNE AG this year about the EBIT? -------------------------------------------------------------------------------- Holger Steffen, SMC Research - Analyst [27] -------------------------------------------------------------------------------- EBIT. -------------------------------------------------------------------------------- Markus Lesser, PNE AG - Chairman of Management Board & CEO [28] -------------------------------------------------------------------------------- Yes, this is related to the internal situation. I don't have all numbers of the PNE AG now in place. Maybe we come back to this on a different call. -------------------------------------------------------------------------------- Holger Steffen, SMC Research - Analyst [29] -------------------------------------------------------------------------------- Okay. My last question, we see a high tax quota in 2019. Are the swap costs responsible for this quota? -------------------------------------------------------------------------------- Markus Lesser, PNE AG - Chairman of Management Board & CEO [30] -------------------------------------------------------------------------------- The tax issue is -- let me see. We have a tax issue. Sometimes, you prepare yourselves for the questions, and I had prepared myself for this question. I have to find it. -------------------------------------------------------------------------------- Holger Steffen, SMC Research - Analyst [31] -------------------------------------------------------------------------------- Okay. Maybe we can discuss it later. No problem. -------------------------------------------------------------------------------- Markus Lesser, PNE AG - Chairman of Management Board & CEO [32] -------------------------------------------------------------------------------- Thank you. I'll come back to you. -------------------------------------------------------------------------------- Operator [33] -------------------------------------------------------------------------------- The next question we have is from the line of Jan Bauer from Warburg Research. -------------------------------------------------------------------------------- Jan Bauer, Warburg Research GmbH - Analyst [34] -------------------------------------------------------------------------------- I got a question on the guidance. So can you give us like a split between the EBITDA contribution from power generation and from the project business? -------------------------------------------------------------------------------- Markus Lesser, PNE AG - Chairman of Management Board & CEO [35] -------------------------------------------------------------------------------- Yes. In power generation, we are now at an amount of EUR 19.4 million. And depending on that, what we could build this year, we have an increase. Just right now, as I mentioned before, it's difficult to say when we are ready with the project due to the shifts we see in delivery and due to the corona crisis. And we can only say that we have this time very windy January, February and March. So therefore, we think -- I think that the power generation will exceed the number we have had in 2019 maybe by EUR 2 million to EUR 3 million, maybe more, it's my estimation. And depending on that, when we could -- when we can put the new wind farms in operation, then we have an increase -- an additional increase. From EBITDA number, I would assume it's roughly EUR 20 million, EUR 21 million, EUR 22 million in any case. -------------------------------------------------------------------------------- Jan Bauer, Warburg Research GmbH - Analyst [36] -------------------------------------------------------------------------------- Okay. So your portfolio right now consists mostly of -- only of German wind farms. Do you have any idea whether you will probably take some of French wind farms or even the Polish wind farm into your portfolio? -------------------------------------------------------------------------------- Markus Lesser, PNE AG - Chairman of Management Board & CEO [37] -------------------------------------------------------------------------------- Just right now, we have -- if you look to the pipeline, and this is a remarkable pipeline for our business with 311 megawatts in Phase 3 in Germany. And you look to the numbers we have just right now in place and you see, if you would take them all 311 plus 58, which are under construction or shortly under construction, plus 130 megawatts. So we have an amount in Germany where we can take them to 500 megawatts. And so therefore, we have to see if we take French project as well on board. But I can't confirm now that we stay only with German projects. Maybe we take some French projects on board as well. But just right now, we have enough in the pipeline. -------------------------------------------------------------------------------- Jan Bauer, Warburg Research GmbH - Analyst [38] -------------------------------------------------------------------------------- Okay. And so your current portfolio, there are a few older wind farms that are already running since 2002. So usually, repowering comes maybe option after 20 years. That would be in 2022, so you already have like an idea what will happen to those older wind farms. Is the repowering option? Have the land lease contracts secured and stuff like that? -------------------------------------------------------------------------------- Markus Lesser, PNE AG - Chairman of Management Board & CEO [39] -------------------------------------------------------------------------------- Yes, we have taken over 1 project last year with -- and this project is in our -- it's Papenrode, 22.3 megawatts. And we have -- we are working on other projects as well, which we can take -- which we would like to take over and then look how we can work in terms of repowering. Papenrode, we are working on to create a permit for new machines, but you need time for that. In the moment, it runs well, and we get good results out of it. And if you look to our service business, we have 1,600 megawatts in operation where we are managing around about 20 projects, which had been built in former times. So therefore, there is a good basis to get additional repowering projects on board. -------------------------------------------------------------------------------- Jan Bauer, Warburg Research GmbH - Analyst [40] -------------------------------------------------------------------------------- Okay. Just one last question is on your on Panama pipeline. So you acquired it. And is it possible that you will already have that in first project right sale or something like that for this year? -------------------------------------------------------------------------------- Markus Lesser, PNE AG - Chairman of Management Board & CEO [41] -------------------------------------------------------------------------------- Sorry, can you repeat it? I had some disturbances in the call. -------------------------------------------------------------------------------- Jan Bauer, Warburg Research GmbH - Analyst [42] -------------------------------------------------------------------------------- Yes, no problem. Your Panama pipeline. So you acquired it during last year. And do you think it's an option that you already might have on sale on this pipeline for this year, like project right sale or something like that? -------------------------------------------------------------------------------- Markus Lesser, PNE AG - Chairman of Management Board & CEO [43] -------------------------------------------------------------------------------- Yes. So we are working just right now. So we have the main land leases in place. We're working on PPA. And depending on this PPA, we would like to sell immediately after we have the PPA in place and the permit on board. And we think we can -- we are working on this to get this done this year. But we will see. It depends on the PPA. -------------------------------------------------------------------------------- Jan Bauer, Warburg Research GmbH - Analyst [44] -------------------------------------------------------------------------------- Right, and I think also on coronavirus. Just one last question. So when you are now entering the power generation business in a larger size, so what do you think you can reach on the refinancing conditions? So currently, your bond yield is at 4%. So I guess you might set up a new one as soon as you can get out of the old one. What's your feeling for interest rates also on project financing? Is it more towards 2%, 3%? -------------------------------------------------------------------------------- Markus Lesser, PNE AG - Chairman of Management Board & CEO [45] -------------------------------------------------------------------------------- Yes. So just right now, we have good conditions in the market, but it should be in any way below 4%, yes. The rest depends on the condition of that what you want to take in terms of risk of [rebound], yes. And so we are looking very closely to the conditions in the moment. -------------------------------------------------------------------------------- Operator [46] -------------------------------------------------------------------------------- The next question we have is from Laura Lopez from Baader Bank. -------------------------------------------------------------------------------- Laura Lopez Pineda, Baader-Helvea Equity Research - Analyst [47] -------------------------------------------------------------------------------- I have also a couple of questions. Maybe adding to the one at the beginning regarding the Bundesnetzagentur. I don't know if this is going to be now the common procedure that we're not going to be able to see who was successful in the auction round. So maybe coming into that, will you inform us going forward for the next auctions, if PNE will be awarded with some projects? -------------------------------------------------------------------------------- Markus Lesser, PNE AG - Chairman of Management Board & CEO [48] -------------------------------------------------------------------------------- Yes. So if there is -- yes, sure, we can do this. So just right now, it was not because being in front of construction. So if you have a financial clause and you start construction, then we can usually come up with some news on that. But we didn't do it before because of a tender. But due to this special situation, we will do it in the future. -------------------------------------------------------------------------------- Laura Lopez Pineda, Baader-Helvea Equity Research - Analyst [49] -------------------------------------------------------------------------------- Okay. Great. And maybe this one is regarding following also some raw materials needed to construct wind plates. There are some tightness in some raw materials and this -- and I just wanted to know, does all of the pressure going to the wind turbine manufacturers? Or do you also experience some pricing pressure from your supplier as well because of that? -------------------------------------------------------------------------------- Markus Lesser, PNE AG - Chairman of Management Board & CEO [50] -------------------------------------------------------------------------------- Just right now, we see no pricing pressure. I think the question is more and more which projects can be finalized and when and how secure is that. I think this is always -- this is -- it becomes more and more [worthful] for the manufacturers and for the EPC providers. So therefore, I'm -- because of having always very well-prepared projects, I think this is a good situation for us. And we are working very closely with the wind turbine manufacturers. And in these times, we have an open discussion all the time, what we can do to improve projects or to have delivery lines. Just right now, we don't see a big impact on blades or something like this or a big delay, but we don't know what may happen if we have a longer situation like that. -------------------------------------------------------------------------------- Laura Lopez Pineda, Baader-Helvea Equity Research - Analyst [51] -------------------------------------------------------------------------------- Okay, very good. And maybe regarding the big drop in oil prices, now also gas prices, electricity prices. So you also mentioned your project in the U.S., but now the situation has again changed because prices have dropped massively. And so I mean, there's a lot of different views, and I know that we don't know what is going to happen, but let's say, if those prices stay rather low for some time, then don't you think that -- I don't think that in Germany, that will put a lot of pressure in electricity prices. But internationally, that could put also some pressure in energy cost, and then as a consequence also, in auction systems or in internationally, so that prices also in the wind industry will be under pressure. So how do you see that developing? -------------------------------------------------------------------------------- Markus Lesser, PNE AG - Chairman of Management Board & CEO [52] -------------------------------------------------------------------------------- Yes. In Germany and France, we have tenders and tariffs and this is a very clear system where you have 20 years tariffs. In Poland as well, in Sweden, United States and other countries, you have the PPA structure, and yes, there is a pressure on the energy pricing. But if you see it in the middle or long run, I think it's driven by low oil prices and low fracking gas prices. I don't think this will be on the long run on that level. So -- and secondly, there is a big need for green energy -- for clean energy. So there is a willingness in the countries. And even if it's not on the first page of the agenda just right now, I think this will come back very soon. And therefore, we see it with the measurement of CO2 prices and other measurements, I think they will come up some measurements around this. -------------------------------------------------------------------------------- Laura Lopez Pineda, Baader-Helvea Equity Research - Analyst [53] -------------------------------------------------------------------------------- Okay. Thank you and then maybe another one on the -- on solar projects. So yes, first time, we saw your pipeline. The majority are in Romania. Can you maybe walk us a little bit how does the system work there for solar projects? Is it also with tenders? And -- or is also more PPA related kind of projects that you will build? -------------------------------------------------------------------------------- Markus Lesser, PNE AG - Chairman of Management Board & CEO [54] -------------------------------------------------------------------------------- Yes. The situation in Romania is like following. They have -- they need energy. They have an increasing need, have a yearly rate of 6% increase in economics. And on the other side, the energy pricing is around about between EUR 0.06 and EUR 0.07 per kilowatt hours, which is very high. So -- and we got a new law beginning of the year, which now gives the possibility to sell energy due to a PPA. And this is the driver for our investment there in wind and in PV. -------------------------------------------------------------------------------- Laura Lopez Pineda, Baader-Helvea Equity Research - Analyst [55] -------------------------------------------------------------------------------- Very good. And maybe just ask 2 short ones on the new strategy. So now, let's say, you're going to have more -- some more direct peers to be compared to and as you grow your own electricity generation pipeline. So these companies normally have like a good dividend policy, let's say, also a good dividend cash-out. Have you already think what you will have as a dividend policy going forward? Or how important this will be? I know right now, you're just in the expansion phase. So it's starting and you need the cash, but maybe that could be an important question also coming from investors. -------------------------------------------------------------------------------- Markus Lesser, PNE AG - Chairman of Management Board & CEO [56] -------------------------------------------------------------------------------- Yes, sure. We did it for the market. In our strategy in 2017, we said we have to get the volatility out of our predictions. And yes, we have to rethink our dividend policy in the moment when we are there, that we have a special amount, and this is a big driver for our business. As you mentioned just right now, we are in a situation of extension. And this means we have to invest. And we thought a long time about, discussed about to give the dividend this -- for last year and what we would like to suggest. And we came up with this dividend. But in the moment, we don't want to -- again, we are in an extension phase. -------------------------------------------------------------------------------- Operator [57] -------------------------------------------------------------------------------- (Operator Instructions) And sir, at this time, there is no further questions in the queue. -------------------------------------------------------------------------------- Markus Lesser, PNE AG - Chairman of Management Board & CEO [58] -------------------------------------------------------------------------------- So then thank you very much. Stay healthy and keep calm in your home office. Thank you very much. Bye. -------------------------------------------------------------------------------- Operator [59] -------------------------------------------------------------------------------- Thank you. Ladies and gentlemen, that concludes your call for today. We thank you very much for joining and ask that you disconnect your lines. Have a great day ahead. | ||
