• EBITDA: More than EUR 200 million, with a target for 2025 set between EUR 245 million and EUR 255 million.
• Construction Capacity: Currently involved in constructing more than 1.5 gigawatts, with plans to add an additional gigawatt this quarter.
• Total Capacity Ready to Build: Over 3.1 gigawatts.
• Financial Debt: 93% project finance, fixed interest rate, with a 13-year tenor.
• Electricity Price Impact: Average market price in January was EUR 85 and EUR 78 in February.
• Generia Capital Increase: EUR 125 million pre-agreement with a US infrastructure fund.
• Data Center Connection Points: Over 600 megawatts, with expectations to exceed 1 gigawatt soon.
• New Tax Impact: 7% of revenues, affecting OpEx cost by EUR 7 million in 2024.
• Wind Portfolio: 2.2 gigawatts ready to start construction in the coming years.

• Warning! GuruFocus has detected 5 Warning Signs with XMAD:SLR.

Release Date: February 27, 2025

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

Positive Points

• Solaria Energia y Medio Ambiente SA (XMAD:SLR) achieved over EUR200 million in EBITDA, maintaining and even increasing revenue despite challenging electricity prices.
• The company is expanding its business model to include real estate associated with renewables and data centers, which are key parts of its future strategy.
• Solaria is involved in the construction of more than 1.5 gigawatts of capacity, with plans to add additional gigawatts, positioning itself as a leader in solar energy in Europe.
• The company has secured a EUR125 million capital increase for its Generia business, ensuring its growth over the next few years.
• Solaria is a leading company in Europe for data center connections, with plans to expand its capacity to 1.5 gigawatts, generating significant cash flow without requiring CapEx.

Negative Points

• The company faced a tough year due to high electricity prices and a new government tax, which impacted operating costs by EUR7 million in 2024.
• Solaria's financial debt is heavily reliant on project finance, which could pose risks if market conditions change.
• The company is not planning to sell assets in the short term, which may limit its ability to quickly raise cash if needed.
• There are uncertainties around the permitting process for wind projects, which could delay construction timelines.
• The stock market is not recognizing the value of renewable energy companies, including Solaria, which could affect investor sentiment and stock performance.

Q & A Highlights

Q: What is Solaria's power price assumption for 2025 guidance? A: The power price assumption for 2025 is EUR45 for merchant prices. (Jose Arturo Diaz-Tejeiro Larranaga, CEO)

Q: Do you expect all the 455 megawatts with construction completed to start feeding the grid during 2025? A: Yes, the connection schedule is public information, and we are on track to connect these assets as planned. (Jose Arturo Diaz-Tejeiro Larranaga, CEO)

Q: How will Solaria finance its PV, hybridization, and data center plans with a cash position of EUR54 million? A: We are covering our CapEx with project finance, which has been our strategy for the past years. We have received project finance payments recently, and we continue to use this method for financing. (Jose Arturo Diaz-Tejeiro Larranaga, CEO)

Q: Have you signed any PPAs for the 1.4 gigawatts currently under construction? A: We maintain 70% under PPA and 30% in merchant basis. We are negotiating new PPAs and will announce them soon. (Jose Arturo Diaz-Tejeiro Larranaga, CEO)

Q: What is the rationale behind the impairment reversal for the Puertollano factory? A: There is a specific signed deal backing the reversal, and more information will be provided in the 2025 first-quarter report. (Jose Arturo Diaz-Tejeiro Larranaga, CEO)

Q: Are banks keen to finance merchant assets? A: Banks are comfortable with merchant basis financing but require more equity. Our project finance covers 100% of our CapEx. (Jose Arturo Diaz-Tejeiro Larranaga, CEO)

Q: Can you provide details on new PPAs in Spain, battery projects, and wind pipeline timelines? A: We are negotiating new PPAs and will provide updates soon. Batteries in Spain will be co-located with solar capacity, and wind projects are awaiting permitting. (Jose Arturo Diaz-Tejeiro Larranaga, CEO)

Q: Is the 2025 EBITDA guidance still integrated with EUR25 million of capital gain? A: It's complicated to mix capital gain with becoming private. We are in a lookout period, and the stock market is not recognizing the company's value. (Jose Arturo Diaz-Tejeiro Larranaga, CEO)

Q: Are there any barriers to connecting the 1.4 gigawatts of capacity under construction this year? A: There are no barriers; it depends on Solaria's construction efforts. We are pushing to connect as soon as possible due to favorable electricity prices. (Jose Arturo Diaz-Tejeiro Larranaga, CEO)

Q: Can you elaborate on the batteries project and procurement? A: We are starting with a 50-megawatt project and will announce a new deal with a supplier soon. The project will be connected in the first half of this year. (Jose Arturo Diaz-Tejeiro Larranaga, CEO)

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