• Total Proportionate EBITDA: Increased by 22% to NOK4.7 billion for 2024.
• Backlog and Pipeline: 2.7 gigawatts under construction and in backlog, a 73% increase from the previous year.
• Net Corporate Debt Reduction: Reduced by NOK1 billion during the quarter.
• Proportionate Revenues: NOK2.7 billion for the fourth quarter, up 70% from the same quarter last year.
• Proportionate EBITDA: NOK1.4 billion for the fourth quarter, up 70% from the same quarter last year.
• Gross Margin: 12% for the quarter.
• Power Production EBITDA: NOK1.35 billion for the quarter, up from NOK726 million last year.
• Philippines Net Revenues: Increased to NOK390 million, with a production volume increase of 77% to 285 gigawatt hours.
• Philippines EBITDA: Increased by 85% to NOK332 million.
• Development and Construction Revenues: NOK1 billion for the quarter, with a margin of 12%.
• Consolidated Revenues: Close to NOK1.2 billion for the quarter.
• Net Profit: NOK101 million negative for the quarter.
• Full Year Proportionate Revenues: NOK7.9 billion for 2024.
• Full Year Power Production EBITDA: NOK4.6 billion, a 39% increase from last year.
• Available Liquidity: NOK3.7 billion at the end of the quarter.
• Total Net Interest-Bearing Debt: NOK22 billion, unchanged from the last quarter.
• 2025 Power Production Estimate: 4.1 to 4.5 terawatt hours, with an EBITDA estimate of NOK3.75 billion to NOK4.05 billion.

• Warning! GuruFocus has detected 10 Warning Signs with FRA:66T.

Release Date: January 31, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Scatec ASA (FRA:66T) reported a 22% increase in total proportionate EBITDA for 2024, reaching NOK4.7 billion, driven by strong results in the Philippines and increased production from new plants.
• The company has significantly increased its backlog and pipeline, with 2.7 gigawatts of projects under construction and in the backlog, marking a 73% increase from the previous year.
• Scatec ASA (FRA:66T) reduced its net corporate debt by NOK1 billion during the quarter, primarily through proceeds from asset sales and refinancing.
• The company achieved strong financial results in the fourth quarter, with proportionate revenues of NOK2.7 billion and an EBITDA of NOK1.4 billion, both up by approximately 70% compared to the same quarter last year.
• Scatec ASA (FRA:66T) has a robust growth pipeline, with 90% related to core markets, and expects to bring these projects into backlog and construction during 2025.

Negative Points

• The company is still awaiting approval from the Regulatory Commission in the Philippines for higher ancillary services prices, which affects revenue recognition.
• Scatec ASA (FRA:66T) reported a net profit of NOK101 million negative for the quarter, indicating financial challenges despite strong operational performance.
• The company has not disclosed the selected electrolyzer supplier for its hydrogen plant project in Egypt, leaving some uncertainty about the project's progress.
• There is a lack of detailed guidance on the expected cash flow to equity from Power Production once the current backlog and projects under construction are fully invested.
• Scatec ASA (FRA:66T) continues to face challenges in reducing contract volumes in the Philippines, with existing contracts expiring and no new contracts being entered into.

Q & A Highlights

Q: What is the return profile for the projects in Romania, and how does it compare to other projects? A: Terje Pilskog, CEO: In Romania, we are meeting our hurdle rates with a 1.2x cost of equity. We have a part of the EPC but not the total, ensuring an 8% to 10% margin on the D&C side. The integrated IRR won't be as high as projects where we have 100% EPC, but the equity IRR and margins meet our hurdle rates.

Q: Will the sale of hydropower assets in Uganda trigger a gain? A: Terje Pilskog, CEO: If the sale price does not cover our current book values, we would have indicated an impairment. Therefore, unless the sale price matches the book value, it will not trigger a gain.

Q: Is the final investment decision for the hydrogen plant in Egypt still expected in the first half of the year? A: Terje Pilskog, CEO: Yes, the decision is still expected in H1. The project has secured a 20-year offtake agreement, with Germany as the offtaker for the first seven years. The remaining steps include finalizing financing and engineering.

Q: Can you provide a breakdown of the NOK3.4 billion contract backlog between 2025 and 2026? A: Terje Pilskog, CEO: Projects typically take 12 to 18 months to construct. More revenue will be recognized in 2025 than in 2026, given the construction timelines.

Q: Have you included any Ukraine EBITDA in your guidance? A: Terje Pilskog, CEO: Yes, Ukraine is included in the guidance, based on our experience from previous years. Note that 2024 included reversals of credit losses, which contributed to the numbers.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.