Norwegian renewable energy company Scatec ASA reported a mixed financial performance in the second quarter of 2024, with a significant year-on-year decline in revenues and EBITDA, offset by modest quarter-on-quarter improvements and positive trends in project development and strategic investments.

The company reported proportionate revenues of 1.5 billion Norwegian krone ($160 million) in Q2 2024, down from NOK 5.8 billion ($620 million) in the same quarter of the previous year. EBITDA also decreased to NOK 951 million ($101 million) from NOK 1,379 million ($147 million).

Scatec reported a net loss of NOK 33 million ($3.5 million) for the second quarter, compared to a net profit of NOK 402 million ($43 million) in the same period the previous year.

On a quarter-on-quarter basis, revenue rose slightly from NOK 1.2 billion ($128 million) in Q1 2024 and EBITDA improved from NOK 848 million ($90 million). Net loss, though, increased from NOK 26 million ($2.8 million) in Q1 2024.

Scatec's power plants generated 995 GWh in the second quarter, up from 873 GWh during the same period last year on a proportionate basis, leading to revenues of NOK 1.05 billion ($112 million) compared to NOK1.2 billion ($128 million) in Q2 2023.

EBITDA for power production ended at NOK 873 million ($93 million), marking a 38 percent increase when adjusted for divestments. In Q2 2023, it was NOK 992 million ($106 million).

With the two projects under construction in South Africa and Botswana progressing well, Development & Construction (D&C) segment delivered NOK 470 million ($50 million) of D&C revenues, with a gross margin of 36 percent, including a contingency release for the hybrid plant Kenhardt. The underlying gross margin for the two projects under construction was 10 percent.

Scatec said it has commenced the construction of the Sidi Bouzid and Tozeur solar projects in Tunisia, each with a capacity of 60 MW. These projects are being developed in partnership with Aeolus SAS, a subsidiary of the Japanese conglomerate Toyota Tsusho Group.

Scatec has already committed NOK 590 million ($63 million) of equity investments to projects under construction against its full-year target of NOK 500-750 million ($53-80 million).

“I am pleased with another good quarter and strong overall results, with new operating assets contributing positively.

Our commitment to grow renewables is evident and I am happy to see construction of our new projects progressing well,” sai CEO Terje Pilskog.

Notable agreements in Q2 2024 included

  • Signed a 20-year ammonia offtake agreement with Fertiglobe for the Egypt Green Hydrogen project.
  • Agreed on renewable ammonia offtake with Yara Clean Ammonia for a green hydrogen project in Damietta, Egypt.
  • Secured a 10-year PPA with Statkraft for a 142 MW solar plant in Brazil.
  • Expanded solar and battery storage capacity in Cameroon through a lease agreement with ENEO.
  • Scatec also refinanced its hydropower plants in Benguet in the Philippines during the quarter with proceeds to Scatec of approximately NOK 170 million ($18 million).
  • Additionally, 56 MW of battery energy storage systems were added to Scatec’s backlog to enhance its ancillary services activities in the Philippines.

Divestments and Portfolio Optimisation

On 30 July, Scatec signed an agreement with TotalEnergies to sell its 51 percent stake in the African hydropower joint venture with Norfund and British International Investment.

On 1 August, the company closed the divestment of its 54 percent equity stake in the 8.5 MW solar power plant in Rwanda to Fortis Green Fund I Rwanda Holdings (Fortis) and Axian Energy Green (Axian) for $1.38 million.

On 2 August, Scatec signed an agreement with Greenstreet 1 Proprietary Ltd, a subsidiary of STANLIB Infrastructure Fund II, managed by STANLIB Asset Management Proprietary Ltd, to sell part of its ownership in the Kalkbult, Linde, and Dreunberg solar power plants in South Africa, with a total capacity of 190 MW, for a gross consideration of 921 million South African rands ($50 million).

“With these agreements we progress on optimising our portfolio, enabling re-investment of capital into new attractive renewable energy projects,” said Pilskog.
Scatec revised down slightly its full-year 2024 power production estimate to 4.1-4.5 TWh but kept unchanged proportionate EBITDA estimate for FY 2024 at NOK 3.75-4.05 billion ($400-432 million).

(1 US Dollar = 10.73 Norwegian Krones)

(Editing by Anoop Menon) (anoop.menon@lseg.com)

Subscribe to our Projects' PULSE newsletter that brings you trustworthy news, updates and insights on project activities, developments, and partnerships across sectors in the Middle East and Africa.