Yahoo Finance Voltalia SA (VLTAF) Full Year 2023 Earnings Call Transcript Highlights: Robust Growth and ...
Capacity: 2.85 gigawatts.
Normalized EBITDA: EUR 271 million.
Annual Growth Rate: 28% for capacity, 35% for turnover, 44% for EBITDA, 39% for net income since 2019.
Energy Sales: Consistent year-to-year growth.
Secured Portfolio: 4 gigawatts, up 10% from last year.
Integrated Business Model: Captures margin across development, construction, and maintenance.
Development Services: Sold over 800 megawatts in 2023.
Construction Services: More than 480 megawatts under construction for third parties.
Maintenance Services: Capacity operated for third parties over 4.6 gigawatts, up 65% from last year.
Corporate PPA: 448 megawatts signed in 2023.
Project Pipeline: 16.6 gigawatts, up 17% from last year.
Turnover: EUR 495 million, up 6%.
Published EBITDA: EUR 241 million.
Net Income: EUR 30 million.
CapEx: EUR 694 million in 2023.
Cash Position: EUR 319 million.
Gross Debt: EUR 1.9 billion.
Net Debt: EUR 1.6 billion.
2024 Capacity Target: 3.3 gigawatts, with 2.5 gigawatts in operation.
2024 EBITDA Target: EUR 255 million, with EUR 232 million from energy sales.
2027 Normalized EBITDA Target: EUR 475 million, with EUR 430 million from energy sales.
Release Date: April 02, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Voltalia SA (VLTAF) achieved a rapid growth of key performance indicators since 2019, with a 28% annual growth rate in capacity, reaching 2.85 gigawatts.
The company reported a significant annual growth rate of 35% for turnover and an even higher 44% annual growth rate for normalized EBITDA, reaching EUR 271 million.
Voltalia SA (VLTAF) has a strong strategic position with 98% of its capacity backed by long-term PPAs, averaging 17.1 years, providing EUR 8 billion of future revenues and protection from energy price volatility.
The company's secured portfolio grew by 10% compared to the previous year, showing strong diversification with the largest part now in Europe at 46%.
Voltalia SA (VLTAF) has an integrated business model, capturing margins across the value chain and maintaining high portfolio quality by selling 50% of developed projects and keeping the best for themselves.
Negative Points
The services segment of Voltalia SA (VLTAF) showed less consistency in revenue generation compared to energy sales, due to the nature of the services provided.
The company faced challenges in 2023, including an inflationary environment, a Brazil blackout, and the El Nino effect, which impacted financial results.
Voltalia SA (VLTAF) experienced a decrease in development and construction turnover by EUR 33 million, indicating a temporary lower volume in activity to third-party clients.
The company's cash and equivalents decreased by 17%, as they used cash to accelerate the construction of their own plants before finalizing long-term loans.
Voltalia SA (VLTAF) is involved in litigation to be compensated for unfair and illegal curtailment following a blackout, which may take time to resolve and has an uncertain outcome.
Q & A Highlights
Q: Can you provide an update on the Brazilian litigation and what kind of compensation for missing revenue Voltalia would be covered? A: Sebastien Clerc, CEO, mentioned that litigation has been initiated jointly with other market players affected by unfair and illegal curtailment following last year's blackout. A favorable decision has been made to compensate, but the process may take time due to appeals. The amount claimed is high, but specific details were not disclosed to not weaken their position in the ongoing litigation. The impact of curtailment is significant, and they are working to increase the claim amount.
Q: What impact has El Nino had on Voltalia since the start of the year? A: Sebastien Clerc, CEO, explained that El Nino, which started about a year ago, had a significant negative impact on their wind farm power generation in Brazil. The El Nino event is coming to an end, with its impact weakening. They have taken into account the actual power generation since January 1 when setting the 2024 target.
Q: Could you elaborate more on the financing plan for full year 2024? A: Yoni Ammar, Head of Funding and Investment, clarified that they have the available facilities to draw 100% of the green bond refinancing. They will finance a portion of the EUR500 million CapEx with new project finance, with the amount depending on each project and geography. They are launching the refinancing of the green bond and will favor non-dilutive instruments.
Q: Could you give more details on debt schedule, particularly related to the bond? A: Yoni Ammar provided details on the debt schedule, with the next big refinancing event coming in Q2 '26 for EUR270 million, then Q4 '27 for EUR90 million, and Q4 '28 for EUR490 million, which may be postponed by one year.
Q: What part in percentage of the group total debt is swapped into floating rates with caps? A: Yoni Ammar stated that EUR65 million of corporate debt is capped and the cap has already been reached.
Q: Can you comment on the trajectory that PPA prices are taking at the moment? Are you seeing any pressure on PPA prices due to lower wholesale power prices in Europe? A: Sebastien Clerc, CEO, explained that PPA prices are less impacted by short-term wholesale price fluctuations and are more influenced by CapEx inflation and interest rates. In Brazil, short-term prices are increasing, which may lead to higher demand for 20-year contracts. However, in Europe, corporate buyers might delay signing new 20-year contracts due to lower spot prices.
Q: Is the target equity IRR of 15% still achievable in Brazil as of today? A: Sebastien Clerc, CEO, said that in recent years, they have not found long-term PPAs at prices that meet their targets in Brazil, except in the distributed generation market through Helexia. They have been selling projects to other investors who accept lower returns or market price exposure. The target equity IRR is achievable in the distributed generation market where Helexia is a leader.
This article first appeared on GuruFocus.
