Orrön Energy Report for the three months ended 31 March 2024
London, 14 May 2024, (Oilandgaspress) – 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.
Highlights
Power generation in the first quarter amounted to 274 GWh, which is a record high quarterly production for the Company.
Sale of the 50 percent interest in the non-core Leikanger hydropower plant in April 2024 for MEUR 53, demonstrating the value of the Company’s underlying asset base and enabling recycling of capital into higher return opportunities.
Acquired a greenfield portfolio in January 2024 of up to 180 MW of wind and battery projects in Finland, with land secured for all wind turbine locations and initiation of the first permitting process during the first quarter.
Continued to mature the greenfield portfolio, including signing binding land agreements for the first 500 MW of solar and battery projects in Germany and progressing pre-permit work in Germany and in the UK.
Consolidated financials – 3 months
Cash flows from operating activities amounted to MEUR 3.0.
Proportionate financials – 3 months
Achieved electricity price amounted to EUR 49 per MWh, resulting in proportionate EBITDA of MEUR 5.1.
Proportionate net debt of MEUR 91.2, with significant liquidity headroom available through the MEUR 190 revolving credit facility.
Increased liquidity headroom by MEUR 30 following the sale of the Leikanger hydropower plant in April 2024.
Financial Summary
Expressed in MEUR | 1 Jan 2024- 31 Mar 2024 3 months | 1 Jan 2023- 31 Mar 2023 3 months | 1 Jan 2023- 31 Dec 2023 12 months | |
| Consolidated financials | ||||
| Revenue | 12.3 | 11.4 | 28.0 | |
| EBITDA | 3.1 | 4.6 | -5.1 | |
| Operating profit (EBIT) | -1.0 | 1.6 | -17.0 | |
| Net result | -2.6 | 0.0 | -7.6 | |
| Earnings per share – EUR | -0.01 | 0.00 | -0.03 | |
| Earnings per share diluted – EUR | -0.01 | 0.00 | -0.03 | |
| Proportionate financials1 | ||||
| Power generation (GWh) | 274 | 214 | 765 | |
| Average price achieved per MWh – EUR | 49 | 66 | 47 | |
| Revenue | 13.5 | 14.0 | 36.2 | |
| EBITDA | 5.1 | 6.7 | 5.3 | |
| Operating profit (EBIT) | 0.0 | 2.6 | -11.0 |
1 Proportionate 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 Q1 Report 2024.
Comment from Daniel Fitzgerald, CEO of Orrön Energy AB
“We continued to deliver against our strategy in the first quarter 2024, with revenue growth supported by strong operational performance and higher electricity prices. Notwithstanding the exclusion of the Leikanger asset, following its reclassification to asset held for sale in January, we achieved the Company’s highest quarterly power generation of 274 GWh, with good uptime across our asset base and Karskruv online for the full quarter. I am very pleased to see that Karskruv delivered high availability during its first months of operation, and this asset will continue to contribute significant long-term cash flow to the business. We achieved prices of almost EUR 50 per MWh for the quarter, with electricity prices at higher levels at the beginning of the quarter, then impacted by lower prices in March as energy demand eased and Europe filled its gas storage facilities towards the end of the winter months.
We announced the sale of the Leikanger asset in April and the sales price clearly demonstrates the underlying value and attractiveness of our assets to external buyers, and the gap between our share price and the value of our assets. We are always focussed on the best ways to create value and through this divestment we have successfully unlocked significant value from a non-core asset at an attractive price, enabling us to recycle capital into higher return projects. The estimated free cash flow from Leikanger for 2024 was approximately MEUR 2.5 (assuming an achieved price of around EUR 50 per MWh) and the sales price of MEUR 53 represents more than 20 years of undiscounted free cash flow. The proceeds from the sale strengthens our balance sheet, increases our financial capacity to fund growth and enables us to create more value for shareholders over the long term. Following the sale of Leikanger, we are reducing our estimated annual power generation for 2024 from 1,100 GWh to 1,000 GWh.
Maturing our Development Portfolio
During the quarter, we continued to mature our pipeline of onshore wind, solar and battery storage projects and to add more early-stage projects into our Swedish portfolio. At the end of the first quarter, we had received approved building permits for 37 MW of battery projects in Sweden. We acquired a Finnish portfolio of projects, where land has been secured and the permitting process has already been initiated for the largest project. Our development teams continue to lay the foundations for future growth, where, having already secured over 30 GW of grid capacity in the UK, we have secured exclusive access and binding land agreements on multiple projects in the UK and Germany. Given the scarcity of large-scale projects across these countries and the low breakeven cost of our onshore portfolio, I expect these projects to deliver material value for the Company as we monetise projects at key milestones.
Power generation and financial performance
We delivered in line with our expenditure guidance and achieved proportionate revenues of MEUR 13.5, proportionate EBITDA of MEUR 5.1 and ended the period with a proportionate net debt position of MEUR 91.2. In the beginning of 2024, we increased our revolving credit facility from MEUR 150 to MEUR 190. Following completion of the Leikanger sale in early May, our finance facility reduced to MEUR 170 and combined with the sale proceeds of MEUR 53, this leads to a MEUR 30 increase in our liquidity headroom to MEUR 130, giving us ample firepower for acquisitions and growth.
Starting the year in a strong position
We delivered our highest quarterly power generation, good financial results and good progress on our development pipeline. Our focus remains unchanged, creating long-term value for shareholders, and the sale of Leikanger is a perfect example of this and allows us to recycle capital into higher return opportunities. Looking forward, we will continue maturing and growing our project portfolio, adding organic growth opportunities into our pipeline and I am confident that we will be able to continue executing on value accretive opportunities going forwards.”
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