DJ Voltalia SA: After a strong growth in the first half of 2020, Voltalia confirms its medium-term trajectory
Voltalia SA
Voltalia SA: After a strong growth in the first half of 2020, Voltalia
confirms its medium-term trajectory
24-Sep-2020 / 07:00 CET/CEST
Dissemination of a French Regulatory News, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
Very strong growth in H1 2020
· In H1, growth[1] in revenues (+73%), EBITDA (+111%) and seasonal net
loss (+77%) despite low wind resource in Brazil: new power plants and
expansion of external services
Growth confirmed, despite temporary activity delays and currency effects
impacting 2020 EBITDA
· Strong H2 improvement expected due to the seasonality of wind resource
in Brazil and commissioning of new plants: H2 EBITDA expected to be 4.2
times H1 EBITDA, at constant exchange rates
· However, in H2, the Covid-19 crisis is strongly impacting the Brazilian
real and slows down temporarily construction schedules of Voltalia plants
and orders from third-party clients (Services)
· Rebasing 2020-2023 sequence of EBITDA ambitions accordingly (with
EUR/BRL assumed at 6.3): around &euro100 million in 2020 (vs
&euro160-&euro180 million), around &euro170 million in 2021 and
&euro275-&euro300 million in 2023 (confirmed)
· Capacity ambitions are confirmed: 1 GW in operation by end 2020 and 2.6
GW in operation and construction with increased proportion of solar and a
greater geographic diversification
Outstanding development and commercial activity since the beginning of the
year
· Record level of new power sale contracts, reaching 867 MW since January
(x2.2 compared with full year 2019)
***
Voltalia (Euronext Paris ISIN code: FR0011995588), international player in
renewable energies, announces today its H1 2020 results[2].
Voltalia will comment on its H1 2020 results and short to mid-term
perspectives during a live webcast starting at 8.30 AM Paris time on
Thursday 24, 2020. All connection details are available on our website:
https://www.voltalia.com/uk/investors [1].
"Voltalia recorded very strong growth in the first half of 2020. The
contribution of new power plants, our expansion in Europe and Africa, the
rebalancing towards solar and our strategy to develop Services to
third-party clients supported this achievement. Voltalia's performance would
have been even better without poor wind conditions in Brazil and currency
variations. We adjust the 2020 EBITDA ambition to take into account a
Brazilian real now weak and the effects of the covid-19 crisis on our
construction sites and on our clients' activity but we confirm our year-end
ambition of 1 GW of installed capacity. Looking beyond 2020, the momentum
remains very strong. The record-high level of new contracts won since the
beginning of the year (867 MW) supports our long-term capacity and results
growth." comments Sébastien Clerc, CEO of Voltalia.
Key figures
Change
In &euro H1 2020 H1 2019 At actual rates At constant
millions rates
Revenues 88.4 56.9 +55% +73%
EBITDA 23.8 13.9 +71% +111%
EBITDA margin 27% 24% +2.4 pts +5.3 pts
Net profit (15.8) (8.7) +81% +77%
(Group share)
H1 2020 total consolidated revenues stands at &euro88.4 million, up by 73%
at constant currency, and H1 2020 total consolidated EBITDA stands at
&euro23.8 million, up by 111% at constant currency. The EBITDA margin, at
27%, improves by 5.3 points at constant currency, notably thanks to a better
mix of activity in Services which is more than offsetting poor wind
conditions in Brazil. Net profit (Group share), which is, as in the past,
negative due to the seasonal nature of the wind resources of the power
plants owned by Voltalia, also records a growth in volume with a net loss
(Group share) increasing by 77% at constant exchange rates.
Business review
Energy sales: revenues and EBITDA growth thanks to portfolio growth and
despite lower wind resource
Change
In &euro H1 2020 H1 2019 At actual At constant
millions rates
Rates
Before
eliminations
of services
provided
internally
Revenues 62.1 45.5 +36% +54%
EBITDA 32.9 27.4 +20% +36%
EBITDA margin 53% 60% -7.2 pts -7.1 pts
Production (in 915 757 +21%
GWh)
Installed 820 534 +54%
capacity (in
MW, end of
period)
H1 2020 revenues are &euro62.1 million, up by 54% at constant currency, and
EBITDA is &euro32.9 million, up by 36% at constant currency, driven by the
increase in installed capacity in operation across geographies, reaching 820
MW at the end of June 2020. The EBITDA margin is down by 7.1 points,
impacted by lower wind resource in Brazil and the consolidation of Helexia.
· In Brazil, 54% of energy sales (vs. 73% in H1 2019), typical business
seasonality is amplified by particularly unfavourable weather conditions
with an EBITDA impact of -&euro2.5 million compared with last year and
-&euro7.5 million for an average wind resource. In addition, the sanitary
and economic crisis sees a strengthening of the euro, especially against
emerging currencies. The average EUR/BRL rate is 5.4 in H1 2020 compared
with 4.3 in H1 2019, resulting in a translation impact of -&euro4.5
million on the EBITDA. On the other hand, new wind projects generate
&euro6.3 million of EBITDA in H1 2020.
· In France, 29% of energy sales (vs. 23% in H1 2019), the deconsolidation
of the Coco-Banane solar plant's EBITDA is offset by the positive
contribution of new hydroelectric and solar (including Helexia's rooftops)
power plants and the good performance of other existing power plants.
· In other countries (United Kingdom, Belgium, Portugal, Spain, Italy,
Greece and Egypt), 17% of energy sales (vs. 4% in H1 2019), EBITDA is
materially higher, mostly driven by the excellent performance of the Râ
Solar plant in Egypt, above expectations, and Helexia's integration.
Recently acquired Helexia, a solar rooftop and energy efficiency specialist
consolidated since July 2019, represented 18% of H1 2020 energy sales.
Helexia's revenues were 24% higher when compared with H1 2019 for an EBITDA
margin of 35%, reflecting a less capital-intensive model than Voltalia's
historical Energy sales business.
Services: lower internal EBITDA more than offset by higher external EBITDA
to third-party clients
Change
In &euro H1 2020 H1 2019 At actual At constant
millions rates
rates
Before
eliminations
of services
provided
internally
Revenues 49.9 73.9 -32% -29%
EBITDA -1.9 1.2 NA NA
EBITDA margin -4% 2% NA NA
H1 2020 Services revenues were down 29% at constant exchange rates on H1
2019, with negative EBITDA reflecting lower internal sales which are
eliminated in the consolidated accounts.
· Development, Equipment Procurement and Construction (78% of H1 2020
Services sales) recorded lower sales and EBITDA. This is due to (i)
increased early-stage development costs to support geographic
diversification, and (ii) less internal billing compared with H1 2019
which enjoyed significant contribution from the Cacao project in French
Guiana and the Râ Solar project in Egypt. In parallel, external sales
accelerated thanks to Construction contracts in progress, particularly in
Africa and in Europe (mainly Portugal), and to the sale of two Brazilian
ready-to-build wind projects for a total of 94 MW to Total-Eren[3] and
Toda[4].
· Operation & Maintenance (22% of H1 2020 Sales) recorded higher sales,
including the contribution of Greensolver, but remained below breakeven,
pending higher volume of activity to be derived from new business secured
and from Voltalia's growing portfolio of plants.
Overall, the increased share of external sales to third-party clients in the
activity mix resulted in much lower eliminations, with Eliminations and
corporate costs at &euro7.2 million, down from &euro14.7 million in H1 2019.
This better mix contributed to the improvement of the total EBITDA in
absolute terms and relatively to revenues, while illustrating once again
Voltalia's integrated strategy combining Energy sales and Services.
Net result of -&euro16 million reflecting usual seasonality
Change
In &euro millions H1 H1 At At
2020 2019 actual consta
nt
rates
rates
EBITDA before eliminations and 31.0 28.6 +8.2% +27.0%
corporate
Eliminations and corporate (7.2) (14.7) -51.1% -52.0%
EBITDA 23.8 13.9 +71% +111%
EBITDA margin 27% 24% +2.4 +5.3
pts pts
Depreciation/Amortisation/Provisions (22.8) (9.6) x2.4 x2.6
(DAP)
Operating revenue (EBIT) 1.2 4.3 -73.0% +2.8%
Financial result (14.9) (15.3) -2.5% +14.8%
(MORE TO FOLLOW) Dow Jones Newswires
September 24, 2020 01:00 ET (05:00 GMT)
DJ Voltalia SA: After a strong growth in the first -2-
Taxes and net income of equity (4.3) (0.9) x4.8 x5.6
affiliates
Minority interests 2.3 3.2 -27.3% -11.4%
Net profit (Group share) (15.8) (8.7) +80.6% +76.8%
Consolidated EBITDA stands at &euro23.8 million, up by &euro9.9 million
(+111% compared with 2019 at constant currency) driven by the positive
development in the business, and despite low wind resource and the weakening
of the Brazilian currency (together -&euro13 million EBITDA impact).
EBITDA margin gains 5.3 points at constant currency, reaching 27% of
revenues, also supported by the better mix of activity in Services.
Consolidated EBIT drops at &euro1.2 million. Depreciation and Amortisation
increase by &euro4.1 million due to new plants commissioning and the
consolidation of Helexia. The 2019 figures included EPC-related reversal of
Provisions for &euro6.2 million[5].
Financial result improves slightly (by &euro0.4 million) due to the combined
effects of lower interest rates for plants in Brazil and lower EUR/BRL
exchange rate, with a total impact of &euro4.4 million, partly offset by
increased project debt and the consolidation of Helexia's debt.
Taxes are up by &euro3.4 million, mostly driven by the mix of activity with
higher Services sales to third-party clients, and the integration of
Helexia.
Minority interests record a loss of &euro2.3 million. Plants co-owned with
minority partners have a slower profitability ramp-up profile than
fully-owned plants.
In H1 2020, Voltalia reports a &euro15.8 million Net loss (Group share), up
by &euro7.1 million compared with H1 2019, consistent with the growth in
activity. Voltalia's first semesters are characterized by seasonality with
high wind regimes in Brazil skewed towards H2 (H2 production 70% higher on
average than H1 for the last two years) and with H1 2020 not yet benefitting
from the full contribution of new plants.
Simplified consolidated balance sheet
Voltalia's assets are mainly power plants in operation (78% of Property,
plant and equipment), and in construction or in development. With 73% of its
installed base in Brazil, Voltalia records a translation impact in H1 2020
related to the strengthening of the EUR against the BRL, which also reduces
its debt in Brazilian real.
In &euro millions 30/06/2020 31/12/2019 Change
Goodwill 59.9 63.5 -3.5
Intangible assets / Other 175.4 169.0 +6.4
intangible assets
Property, plant and equipment 873.5 897.6 -24.1
Tangible and intangible fixed 1 108.9 1 130.1 -21.2
assets
Cash and cash equivalents 160.8 269.7 -108.9
Other assets 157.3 155.0 +2.3
Total assets 1 427.0 1 554.8 -127.9
Equity, Group share 606.7 708.9 -102.5
Minority interests 37.6 51.3 -13.7
Financial debt 627.2 656.2 -29.0
Other current and non-current 155.5 138.4 +17.1
liabilities
Total liabilities 1 427.0 1 554.8 -127.9
As of June 30, 2020, Fixed assets decline by &euro21.2 million (-1.9%)
compared with December 31, 2019 due to:
· a &euro24.1 million net decrease in Property, plant and equipment due to
the straight-line depreciation of plants in operation and currency
variations, more than offsetting investment in new projects and
construction for &euro168.4 million;
· a &euro6.4 million increase in intangible assets, mostly reflecting the
capitalization of new power plant projects under development.
At June 30, 2020, the Group's cash position stands at &euro160.8 million,
down by &euro108.9 million on 31 December 2019. This is essentially
explained by Voltalia's investments, with cash used to temporarily bridge
drawdowns of long-term project financing, saving interest charges.
At June 30, 2020, the Group's financial debt -contracted in local currency
and backed by power production plants- is &euro627.2 million, down by
&euro29.0 million. This decrease is attributable to currency variations,
which more than offset a &euro63.0 million net increase in debt.
Voltalia maintains a very robust financial structure, with a very low
gearing of 51%[6] . The Group's financial debt is largely backed by power
production plants for which debt is contracted in local currency, with an
average residual maturity of 15 years. In addition, as of June 30, 2020,
Voltalia has &euro150 million of unused corporate revolving credit
facilities.
Developments since July 1st
Voltalia announces today the release of a report by ESG agency
Sustainalytics. Voltalia now ranks 7th within its industry group (482
companies), progressing compared with 2019 (16th). Topics audited included
Corporate governance, Community relations, Business Ethics, Land Use and
biodiversity.
In Brazil, Voltalia launched in August the construction of VSM 4, a 59 MW
wind plant in Voltalia's Serra Branca cluster, in the state of Rio Grande do
Norte in Brazil, for a commissioning expected in H1 2021.
Voltalia sold in August to Japanese construction firm Toda a 28 MW
ready-to-build wind project located in its Serra Branca cluster. As part of
this project, Voltalia will carry out construction, operation, maintenance,
and administrative services for Toda.
Beginning of September, Voltalia signed a 14-year power sale contract with
Copel, a Brazilian utility company. Voltalia will build a 260 MW solar plant
(SSM 3 to 6) in its Serra Branca cluster. The solar plant is expected to be
commissioned in the first half of 2022.
Voltalia announces today that it has won a Services contract with Vale and
Cemig covering the Santo Inácio Wind Complex in Brazil which capacity
amounts to 98,7 MW. For an initial 5 year-period, Voltalia will provide
maintenance services on the electric balance of the plant and supervise
operations provided by the turbine manufacturer, based on Voltalia's
in-house performance analysis tool.
In France, Voltalia commissioned in August a 3.9 MW solar shelter plant in
the South Region which benefits from a 20-year power sales agreement.
In September, Voltalia and its partner Ikea started marketing solar rooftop
solutions to Ikea's clients.
In Greece, Voltalia won 12 MW of new solar projects in August, expected to
be commissioned during the first half of 2021. The Greek Regulatory
Authority of Energy awarded Voltalia 20-year power sales agreements.
Voltalia also won 10 MW of construction-and-maintenance contracts for a
photovoltaic project owned by a third-party client who secured power sales
agreements during the same auction.
In Portugal, Voltalia announces today it has won new construction contracts,
increasing its Portuguese backlog of construction contracts for third-party
clients to a total of 300 MW.
Growth trajectory confirmed despite short-term covid-19-related challenges
As communicated this year, the sanitary and economic crisis makes Voltalia's
environment less predictable. The three main risks identified by Voltalia
were i) currency variations (mainly the Brazilian real); ii) the ability to
carry out the construction of current and future Voltalia projects; and iii)
the capacity of Voltalia's clients in Services (mainly development sales and
construction projects) to move forward in their decision-making process.
Short-term challenges
In H1, Voltalia recorded low levels of wind in Brazil. Since the beginning
of the year, Voltalia is also experiencing a continuous weak BRL against the
EUR, with the EUR/BRL rate around 6.3 on average since the start of H2,
compared with 5.4 in H1 2020 and 4.3 in H1 2019. In addition, while
Voltalia-owned sites under construction have only suffered minor delays in
H1 2020, as for VSM1 (163 MW), the Covid- 19 crisis now affects construction
schedules. Originally delayed by a few weeks, projects are now behind by 4-6
months (VSM2&3 and Mana Storage) or even more (Cacao). Finally, certain
Services' third-party clients are delaying contract signatures or notices to
proceed.
Rebasing 2020-2023 sequence of EBITDA ambitions accordingly
· The low levels of wind of H1 2020 in Brazil had a -&euro7.5 million
EBITDA impact.
· Assuming a EUR/BRL of 6.3 from today until the end of the year, i.e. an
average exchange rate of 5.9 (versus 5.0 assumed to calculate the low end
of the 2020 ambition), the weakness of the BRL is estimated to have a
full-year 2020 EBITDA impact of -&euro25 million.
· Over the full-year 2020, the combined effect of Covid-related delays
(Construction, Services) on EBITDA is estimated to be -&euro27 million.
As a result, Voltalia now expects its 2020 EBITDA to reach around &euro100
million (assuming average wind/solar/hydro resource from today), a 50%+
growth compared with 2019 and 90%+ growth at constant currency, but below
its &euro160-180 million initial ambition range. In 2021, once it will
benefit from the contribution of the 1 GW portfolio of operating plants and
normalizing Services, Voltalia's EBITDA is expected to reach around &euro170
million (assuming average wind/solar/hydro resource and a EUR/BRL rate of
6.3). By 2023, with Voltalia benefiting from further capacity growth, EBITDA
is expected to reach &euro275-300 million, assuming a EUR/BRL rate of
6.3[7].
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