Report for the nine months ended 30 September 2023
Highlights
- Final
commissioning work is progressing well on the Karskruv project,
with handover expected at the end of November 2023. The project, in
the SE4 price region, is set to add 290 GWh to the Company’s yearly
power generation.
- On
track to deliver 800 GWh of power generation for the full year,
with proportionate power generation of 539 GWh in the reporting
period.
- Over 30
GW of grid connections secured in the UK, enabling initiation of
solar and battery projects with estimated first grid energisation
dates between 2030 and 2039.
-
Continued to mature a broad portfolio of projects in the Nordics
with access to grid and land, with permits submitted for 29 MW of
battery and solar projects, out of which 14 MW have been
granted.
- One acquisition
signed during the quarter, comprising of ownership in six wind
farms in Sweden, adding 5 MW installed capacity in the SE4 price
region.
Consolidated financials – 9
months
- Cash
flows from operating activities amounted to MEUR 15.1.
Proportionate financials – 9
months
-
Achieved electricity price amounted to EUR 49 per MWh, resulting in
proportionate EBITDA of MEUR 4.0.
-
Proportionate net debt of MEUR 66, with significant liquidity
headroom available through the MEUR 150 revolving credit facility
entered into in early July 2023.
Financial Summary
Orrön Energy owns renewables assets directly and through joint
ventures and associated companies and is presenting proportionate
financials to show the net ownership and related results of these
assets. The purpose of the proportionate reporting is to give an
enhanced insight into the Company’s operational and financial
results.
Expressed in MEUR |
1 Jan 2023-30 Sep 20239
months |
1 Jul 2023-30 Sep 20233
months |
1 Jan 2022-30 Sep 20229
months |
1 Jul 2022-30 Sep 20223
months |
Consolidated financials |
|
|
|
|
Revenue |
19.6 |
2.3 |
2.5 |
2.5 |
EBITDA |
-4.2 |
-6.7 |
-1.9 |
2.0 |
Operating profit
(EBIT) |
-12.6 |
-9.4 |
-2.5 |
1.4 |
Net result |
-15.6 |
-7.8 |
26.5 |
1.8 |
Earnings per
share – EUR |
-0.05 |
-0.03 |
0.09 |
0.01 |
Earnings per share diluted – EUR |
-0.05 |
-0.03 |
0.09 |
0.01 |
Proportionate financials1 |
|
|
|
|
Power
generation (GWh) |
539 |
161 |
166 |
83 |
Revenue |
26.6 |
3.6 |
25.3 |
14.6 |
EBITDA |
4.0 |
-4.3 |
11.4 |
10.1 |
Operating profit
(EBIT) |
-7.8 |
-8.2 |
8.5 |
8.5 |
Average price achieved per MWh – EUR |
49 |
23 |
153 |
177 |
1Proportionate financials represent Orrön
Energy’s proportionate ownership (net) of assets and related
financial results, including joint ventures. For more details see
section Key Financial Data in the Q3 Report 2023.
Comment from Daniel Fitzgerald, CEO of
Orrön Energy AB“Our business continued to grow during the
third quarter, adding scale to our greenfield pipeline and
additional production into our portfolio. We have acquired
producing assets at attractive terms, matured several battery and
solar projects towards final investment decisions and are
continuing to build our Nordic project pipeline. I am pleased to
see the progress in our UK business where we have secured a
pipeline of over 30 GW of grid connections for solar and battery
projects. We have also seen great progress at the Karskruv project
where we are expecting handover at the end of November, which is
set to add 290 GWh to our annual power generation.
Market conditions were not favourable during the
third quarter 2023 where the renewables sector faced continued
headwinds, with sustained low energy prices, rising interest rates
and increasing inflationary pressure. Electricity price levels in
the Nordics were further impacted by unseasonably high levels of
water in hydropower reservoirs as a result of the storm Hans,
coupled with lower demand during the summer months. The weak price
levels in the third quarter resulted in a negative net result for
the Company, but with our robust financial capacity and resilient
business model, we remain in a strong financial position. I am
pleased to see that the price trend is starting to move in a more
favourable direction as we enter the winter season in Europe.
Growing our PortfolioSince
inception we have been building a pipeline of onshore wind, solar
and battery storage projects. During the third quarter, permits
were granted in Sweden for 14 MW of battery projects, with an
additional 15 MW of battery and solar projects awaiting final
decisions from the municipalities. Our European development teams
continue to lay the foundations for future growth where we are
maturing an early stage portfolio in the UK with over 30 GW of
onshore solar and battery projects where grid capacity has already
been secured.
We also added profitable growth to our Nordic
operational portfolio through the acquisition of ownership in six
wind farms in the SE4 price area in southern Sweden. Looking back
over the past year, we have added more than 100 GWh to our
operational portfolio through value accretive acquisitions, which
have been possible due to our strong networks in Sweden. This forms
a key part of our strategy to steadily grow our portfolio of cash
flow generating assets at attractive terms.
Project delivery at the Karskruv wind farm has
been excellent, with final commissioning underway and handover
expected ahead of schedule towards the end of November 2023. The
turbines have been generating power since August 2023 and we have
completed trial operations and final handover inspections with only
minor commissioning work outstanding. Karskruv will increase the
Company’s estimated annual power generation to 1,100 GWh from 2024,
adding significant revenues from the SE4 price region.
Power generation and financial
performanceWe achieved proportionate power generation of
539 GWh for the reporting period, and 161 GWh during the third
quarter, which was slightly lower than expected mostly due to
lower-than-expected wind speeds across the Nordics. Our full-year
production estimate remains unchanged at 800 GWh. We delivered in
line with our expenditure guidance, and for the reporting period,
achieved an average electricity price of EUR 49 per MWh,
proportionate revenues of MEUR 26.6, proportionate EBITDA of
MEUR 4.0 and ended the period with a proportionate net debt
position of 66 MEUR. We secured a revolving credit facility of MEUR
150 at the beginning of July 2023 at attractive rates and with
flexible conditions, which gives us ample headroom for growth,
allowing us to take advantage of favourable market conditions as
they arise. During periods of low electricity pricing like we have
seen in the third quarter, the financial resilience of the Company
is a real strength.
Beginning of the end in the Sudan legal
caseAt the beginning of September 2023, the trial in the
Sudan legal case started at the Stockholm District Court in Sweden,
marking the beginning of the end of this legacy issue. While it is
deeply regrettable that the case has been allowed to proceed this
far, personally, after having spent time listening to the
proceedings and receiving continuous updates, I remain entirely
convinced that this case will end in a full acquittal of the
defendants and dismissal of all claims against the Company. Our
stance towards the case has not changed over the years, nor have
the facts. The defendants and the Company refute any allegations of
wrongdoing in what is a baseless case that has been ongoing for
over 13 years related to alleged activities over 20 years ago. We
announced during the third quarter that the claimed forfeiture had
been increased, which means that, with no change to any of the
underlying facts the Prosecutor has presented three completely
different forfeiture amounts based on three different methodologies
over the past five years. This raises serious questions about the
substance and credibility of the Prosecutor’s claim, and I see no
circumstance in which a corporate fine or forfeiture would become
payable. I am of the firm view that there are no grounds for any
allegations of wrongdoing by any former Company representatives,
and that this will now once and for all be proven by the Court
process.
Building our business for the long
termLooking ahead to the rest of the year and into 2024, I
see a lot of positive triggers within the business that will allow
us to continue to create value. Our production will increase by 40
percent with Karskruv online, our first battery projects will reach
investment decisions and we continue to build a diversified
pipeline of projects, which I am convinced will deliver significant
value in the coming years. 2023 has delivered many challenges for
the market and for our business, however we remain in a strong
financial position, have continued to deliver production growth,
and I continue to see many exciting opportunities ahead of us.”
WebcastListen to Daniel
Fitzgerald, CEO and Espen Hennie, CFO commenting on the report and
describing the latest developments in Orrön Energy at a webcast
today at 14:00 CET, followed by a question-and-answer session.
Registration for the webcast presentation is
available on the website and the below
link:https://us06web.zoom.us/webinar/register/WN_m5K5BN5dRpWDfUU25vbozg
For further information, please contact:
Robert ErikssonDirector Corporate Affairs and
Investor RelationsTel: +46 701 11 26
15robert.eriksson@orron.com
Jenny Sandström Communications LeadTel: +41 79
431 63 68jenny.sandstrom@orron.com
Orrön Energy is an independent, publicly listed
(Nasdaq Stockholm: “ORRON”) renewable energy company within the
Lundin Group of Companies. Orrön Energy’s core portfolio consists
of high quality, cash flow generating assets in the Nordics,
coupled with greenfield growth opportunities in the Nordics and
Europe. With significant financial capacity to fund further growth
and acquisitions, and backed by a major shareholder, management and
Board with a proven track record of investing into, leading and
growing highly successful businesses, Orrön Energy is in a unique
position to create shareholder value through the energy
transition.
Forward-looking statements
Statements in this press release relating to any future status or
circumstances, including statements regarding future performance,
growth and other trend projections, are forward-looking statements.
These statements may generally, but not always, be identified by
the use of words such as “anticipate”, “believe”, “expect”,
“intend”, “plan”, “seek”, “will”, “would” or similar expressions.
By their nature, forward-looking statements involve risk and
uncertainty because they relate to events and depend on
circumstances that could occur in the future. There can be no
assurance that actual results will not differ materially from those
expressed or implied by these forward-looking statements due to
several factors, many of which are outside the company’s control.
Any forward-looking statements in this press release speak only
as of the date on which the statements are made and the
company has no obligation (and undertakes no obligation)
to update or revise any of them, whether as a result of new
information, future events or otherwise.
- Orron Energy - Q3 report 2023 - 08112023en
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