Voltalia SA: record 2018 results and future growth secured
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Voltalia SA
Voltalia (Euronext Paris, ISIN code: FR0011995588), an international player in renewable energies, announces today its results for the 2018 fiscal year. "In 2018, we enjoyed a record financial performance, validating two of our key strategic differentiating factors. First, our relaunch efforts in Services enable profitability gains, proving they are synergetic with our power production activity. Second, being mostly active in non-subsidized markets, we were able again to seize value-enhancing opportunities, translating into materially higher selling prices in Brazil. Another major achievement in 2018 was to secure our 1 GW objective and we have already 387 MW currently under construction. Finally, our investment in project development is paying off: our pipeline of future projects reaches 6.2 GW (+81% in 2018) and is a reservoir for growth of both our Energy Sales and Services activities", declares Sébastien Clerc, Chief Executive Officer of Voltalia. Record financial performance in 2018
In 2018, revenues are in line with 2017's performance, as solid growth in operational business activity fully offsets the 16% drop in the Brazilian real against the euro. 2018 EBITDA is up by 29% at constant exchange rates, thanks to a good contribution of Services, high Energy Sales pricing and good cost control overall. Increased EBITDA and EBITDA margin (+ 5.5 points) contributed to a sharp rebound in Group net profit, reaching an all-time high of EUR8.5 million. Business review Energy sales: improved EBITDA margin
2018 revenues increase by 5% at constant exchange rates and EBITDA grows by 8% compared with 2017, as high pricing over the year and good cost control more than offset a 2% decline in production:
Good cost control and lower fees associated with contract suspensions have a positive impact on the EBITDA margin, increasing by 2.1 points at constant exchange rates. Services: doubling of revenues and achieving for the first time positive EBITDA (6% margin)
Services revenues are multiplied by 2 compared with 2017, driving a sharp rebound in profitability.
Sustained efforts in the relaunch of the commercial activity in Services are beginning to pay off, with a positive EBITDA margin of 6%.
Two differentiating factors creating value A power producer and a service provider Since 2016 and its accelerated development in Services, Voltalia operates a differentiating business model combining Power production and Services provision. Development is the cornerstone of that strategy, with material investments in prospection and development in 2017 and 2018, fuelling its pipeline of projects in development. It reaches 6.2 GW at the end of 2018: x3.4 since the launch of the new strategy in Services with the acquisition of Martifer Solar in 2016. By developing -at a low marginal cost- more projects, Voltalia is able to be selective, keeping projects that best fit its strategy and selling others to third-party clients together with bundled Procurement / Construction / Operation & Maintenance services. In 2018 the Group successfully sold 252 MW of ready-to-build projects to Actis within Voltalia's Serra Branca cluster, as part of a partnership for up to 500 MW in total. Construction, Operation & Maintenance and the associated expertise in 5 technologies (wind, solar, hydro, biomass and storage facilities) are key to Voltalia's value proposition in its Power production business. Economies of scale are unlocked by the dual source of activity: internal projects and third-party projects. In 2018, working on larger construction volumes enabled to secure a competitive framework agreement with a leading photovoltaic panel manufacturer. Working for third-party clients is also a way to explore new countries and technologies: construction contracts were signed in various new African and European countries and a battery storage unit was built in the UK, all strengthening Voltalia's geographical and technological expertise.
Green power producer generating electricity at a competitive price Voltalia has a unique profile with 85% of its installed based producing electricity at a competitive price. With this differentiating strategic focus on non-subsidized markets, Voltalia can seize many value-enhancing opportunities. They arise at all stages of the lifecycle of a plant:
Today, in the renewable energy sector, almost all long-term power sale contracts are with utilities. In markets where renewables are competitive compared to fossil fuels, new opportunities arise with new clients: corporations just looking for a cheap source of electricity. In 2018, Voltalia signed its first long-term contract with a corporate: BRF, one of the world's largest agribusiness companies. Thanks to more than 10 years of experience accumulated on the free market through its activity in Brazil, Voltalia is able to offer attractive opportunities to corporate clients across Europe, Africa and Latin America.
Other items from the P&L: record-high net profit
In 2018, intense activity of insourced Services for the benefit of the Group's own assets translates into higher revenues eliminations, at EUR68.2 million. Eliminations and corporate costs represented EUR18.3 million of EBITDA, a 43% increase compared with 2017. Depreciation, amortisation and provisions increase by 21% at constant exchange rates, mainly due to the full-year contribution of the SMG power plant (+EUR2.7 million), whose turbines were in preservation mode until June 2017, the commissioning of new power plants (+EUR1.4 million) and increased provisions (+EUR1.6 million), partly offset by a positive currency impact (EUR3.9 million). EBIT reaches EUR47.2 million in 2018 up by 13.6 million euros at constant exchanges rates, a 30% increase compared with 2017. The financial result, mainly financing costs from long-term project financing, improves by EUR6.5 million at EUR(29.9) million in 2018, mainly driven by the drop in the Brazilian real. Taxes are up by EUR5.5 million, reflecting the increased profitability of Voltalia. Minority interests record a EUR2.6 million loss. Plants with minority shareholders have a slower profitability ramp-up, and, as opposed to 2017, they did not benefit from contract suspensions in 2018. Group net profit reaches EUR8.5 million, its highest level so far. Voltalia enjoyed a strong catch-up in the second half of the year (+EUR14.1 million), coming mostly from wind and solar seasonality.
Simplified consolidated balance sheet
The balance sheet reflects the Group' strong investment strategy. In 2018, tangible and intangible fixed assets reach EUR750.6 million. At December 31, 2018, 89% of fixed assets are related to plants in operation. The variation since December 31, 2017 is mainly explained by the contribution of new power plants (+EUR71 million) fully offset by the linear depreciation of power plants in operation (-EUR26 million) and a negative currency impact (-EUR53 million). Most of intangible assets lie in assets in operation (EUR28 million) or projects either secured or in construction (EUR64 million). The Group's financial structure is robust. 77% of the total financial debt of Voltalia at the end of 2018 is contracted for power plants, financed by long-term project finance debt in local currency. At December 31, 2018, Voltalia has EUR108.6 million in cash and cash equivalent, a EUR37.4 million increase compared with December 31, 2017. Business developments since January 2019
2019 and beyond 2019: working on delivering on the 1 GW objective For Energy sales, in the absence of contract suspensions in Brazil, prices are expected to remain within the regular long-term power sales framework of set prices indexed to inflation. The first contribution of new plants in France and Egypt is expected, mostly in the second half of the year. In Services, ongoing contracts with third-party clients are currently limited, as most teams are mobilized on Voltalia's own plants and delivering on the 1 GW objective. In 2019, the Group will continue to benefit from economies of scale and maintain a disciplined cost control.
Strong medium-term visibility: over 1 GW in 2020 with EUR4bn of revenues secured until 2044 In 2018, wins in France, Brazil and on the African continent brought Voltalia's portfolio of secured projects to 1,048 MW, securing the 1 GW target set in 2016[2]. Construction has already been launched for 387 MW and the remainder will be launched shortly. Since 2016, Voltalia has delivered on a strategy aiming at growing in solar and in new geographies; accelerated by the acquisition of Martifer Solar. Between the announcement (in September 2016) and the achievement of this 1 GW target, Voltalia's capacity will have more than doubled (x 2.3) and will also be more diverse: Voltalia-owned solar capacity will have been multiplied by more than 10 to represent 19% of the 1 GW capacity. Additionally, when Voltalia's installed capacity will pass the 1 GW milestone, the capacity will be 69% Brazil (compared to 84% in 2016), 19% Europe (16% in 2016) and 12% Africa (0% in 2016). This major achievement backs the achievement of the Group's 2020 EBITDA target.
A vast pipeline (+81% in 2018), foundation to the growth beyond 2020 Beyond 2020, Voltalia can rely on a significant pipeline of projects in advanced development to sustain future growth. The projects in this pipeline have passed criteria regarding access to land, connection capacity, operating authorizations and planning permits, and financial profitability. At the end of 2018, this pipeline stands at 6.2 GW, a 81% increase vs. December 2017. The growth is mostly related to solar projects, whose capacity is multiplied by 2.4 to reach 3.7 GW (60% of the total pipeline), throughout all geographies. This expanding pipeline of projects creates more strategic options for Voltalia both as power producer and as service provider. Today's speed of growth of renewables in the world has no precedent. In the second half of this year, Voltalia will unveil new ambitions beyond 2020.
Next on the agenda: Q1 2019 revenues on April 24, 2019
About Voltalia (www.voltalia.com)
APPENDIX Simplified consolidated statement of profit and loss (non-audited)
Simplified statement of financial position (non-audited)
Report on electricity production in 2018
*includes the production of Oiapoque solar
Breakdown of installed capacity as of December 31, 2018
*4 MW of solar and 12 MW thermal
[1] 2017 revenues rebased for comparability reasons [2] Press release of September 19, 2016 Regulatory filing PDF file Document title: pdf-veng Document: http://n.eqs.com/c/fncls.ssp?u=COTDDYXEEM |
Language: | English |
Company: | Voltalia SA |
84 boulevard de Sébastopol | |
75003 Paris | |
France | |
E-mail: | [email protected] |
Internet: | www.voltalia.com |
ISIN: | FR0011995588 |
Euronext Ticker: | VLTSA |
AMF Category: | News release on accounts, results |
End of Announcement | EQS News Service |
788823 18-March-2019 CET/CEST
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