Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the Maire Tecnimont first half 2022 financial results conference call. As a reminder, all participants are in listen only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, please signal an operator by pressing star and zero on your telephone. At this time, I would like to turn the conference over to Mr. Alessandro Bernini, CEO of Maire Tecnimont. Please go ahead, sir.
Good afternoon, everyone, and thank you for attending the first half 2022 financial results conference call. The first half of 2022 has shown a solid and growing financial performance. Revenues and EBITDA have grown at a double-digit rate versus the corresponding period of last year. Net income has also grown at an impressive rate. We are starting to reap the benefits of our investments in green energy with the new project started, leading to higher revenues of EUR 125.7 million, and a record backlog of about EUR 800 million, which has increased threefold over one year. This solid financial performance has been accompanied by a very strong cash flow generation of EUR 149 million, which has led to an adjusted net cash of EUR 44.1 million.
This is the ninth consecutive quarter of improvement in the net financial position. Our EUR 9.2 billion backlog continues to be extremely healthy and well diversified, and the group is not dependent on any single geography. A 2.9 backlog cover makes us confident about our immediate future. At the same time, our business drivers continue to remain solid, as reflected in a commercial pipeline worth almost EUR 53 billion, of which EUR 7.5 billion in green energy. In conclusion, we are successfully executing projects while picking up the pace in the energy transition. Our main consolidated financial results and KPI are shown on slide 4, and will be discussed in more detail later by Fabio in the presentation. Before we discuss our operational performance, we would like to give you an update on our Russian presence.
The projects advanced in full compliance with all applicable laws and sanctions. These activities were instrumental in order to ensure a smooth and orderly transition to the clients. As anticipated in our first quarter webcast last May, projects have now been suspended for at least six months. This means that no revenue contribution is expected in the second half from a backlog that is worth about EUR 1 billion at the end of last June. The project financial position continued to remain in equilibrium, while all commercial activities had already been suspended in the first quarter. We continue to monitor this evolving situation and will provide additional updates if and when the situation changes. Let's analyze now our operational performance. Our order intake in the first half of this year was almost EUR 1.1 billion.
This is impressive considering that last year we had a record year with over EUR 6 billion in new contracts. This year's order intake has been extremely diversified, both in terms of geographical locations, contract type, and business. This is thanks to a healthy commercial pipeline that continues to offer a variety of interesting prospects all over the world. Moreover, our increasing success in green energy is demonstrated by the fact that almost half of the entire first half order intake is in this business line, a testament of the validity of our technological leadership in energy transition. The virtuous path that has continued this month, I mean July, with a $300 million blue ammonia plant in the Middle East, as well as with a biomethane plant in France.
Let's take a look at one of these green energy projects in more detail, namely a green hydrogen plant award in India. In fact, last May, we were awarded an EPC contract for a green hydrogen plant in Vijaipur, in central India. The award was granted by Gas Authority of India Limited, the largest state-owned natural gas processing company in India, with a diversified activity across the whole natural gas value chain. The project scope of works entails full engineering, procurement and construction up to commissioning, start up of the plant and performance guarantee test run, while its completion is expected in 18 months from the letter of acceptance.
In line with its National Green Hydrogen Mission, this project represents an important milestone of India's journey towards a hydrogen-based and carbon neutrality industry and economy, as well as a tangible confirmation of the steady growth of our group's green energy business. Blending green hydrogen into the gas network or using it as a green feedstock to decarbonize the fertilizer and other hard-to-abate industrial processes are essential uses which are enabling the green hydrogen economy to accelerate and scale up. With our historical presence in India, we are proud to concretely contribute to the country's 2030 decarbonization targets while establishing our leading position in energy transition in the country. While our backlog has remained stable in the second quarter, it continues to be characterized by an overwhelming proportion of gas monetization and energy transition projects.
This is especially driven by a significant increase in the green energy backlog, thanks to the various green transition projects which were acquired in the first part of the year. Moreover, the order intake of the last 18 months has made the backlog even more geographically diversified than ever, with an even split between the Middle East, Europe and the remaining geographies. The diversification is extremely relevant in light of the current geopolitical events, as we do not depend on a single country. Let's focus now on our two business units, starting from our core business. The E&P portion of the hydrocarbon backlog has remained stable at about EUR 1.1 billion or 13% of the business unit backlog. This continues to contribute to the de-risking of our existing business, a very relevant factor in these volatile times.
The backlog cover is 2.8, providing a very high visibility for the future. Moving on to the commercial opportunities in our core business, our pipeline has increased to EUR 45.2 billion at the end of June, up almost EUR 5 billion euros this year. The last quarter has seen a significant increase in new initiatives about to be tendered, driven by the resilience of our core business, strongly supported by powerful business drivers. Such a positive environment bodes well for our group's growth prospects in the years ahead. All the geographies where the group is active continue to remain extremely active, attractive. In particular, the Middle East continue to remain an area of incredible opportunities, driven by a new wave of downstream projects.
At the same time, we are witnessing an increase in activity in North America, driven by an abundance of gas as a feedstock for fertilizer plants, as well as renewed investments in other gas monetization plays. Overall, our pipeline remain extremely strong and geographically diversified, continuing to provide solid support to future awards in the short and medium term. Let's move now to the green energy business unit and our efforts in the energy transition sustainability. In 2022, we have shifted our pace in green energy, and we significantly increased our growth in this business unit. We are developing and implementing our technological solution worldwide, picking up different opportunities and providing innovative solutions suitable to our clients across the various business lines.
In greening the brown, we have continued to help clients decarbonize their business, whether through low carbon and green fertilizers in various countries, green hydrogen in India or a carbon capture feasibility study in Denmark. In green green, we enhanced our activities as we were awarded a feasibility study to produce sustainable aviation fuel based on NextChem portfolio of green initiatives inside the Port Harcourt refinery in Nigeria. While we signed an agreement for a feasibility study to realize a sustainable aviation fuel plant in the port of Rotterdam in the Netherlands. Moreover, we are very proud to have been awarded earlier this month a contract by Storengy, a subsidiary of Engie, to carry out an advanced basic engineering study for a waste, wood and solid recovery fuel conversion plant to produce biomethane at Le Havre in France.
NextChem and Storengy are also establishing a broader cooperation agreement in order for NextChem to act as a strategic partner, co-developer and co-licensor. Finally, we are strongly engaged in implementing our Green Circular District model in different regions in Italy, based on a set of technologies aimed at recycling plastic and unsorted urban waste to produce circular fuels such as methanol, ethanol and hydrogen. We believe that Green Circular District are sustainable initiatives able to reach different objectives, producing low carbon fuels and chemicals, addressing waste management problems, enhancing national pro-production of fuels, and creating new jobs, and redeveloping brownfield sites or those at risk of being decommissioned. We continue to focus our effort on this side of the business, and we expect further developments in the coming quarters.
All these significant and diversified new projects have translated into a sizable increase in the green energy backlog, which has gone up three times over the last 12 months to about EUR 800 million. Such an increase has already translated to higher revenues and EBITDA, a trend that it is expected to grow in the future. The backlog at the moment is focused more on Europe and the Americas, along the same lines as where the commercial opportunities are currently located, as shown by the data included in the following slides. The other side of the coin of the green energy expansion is given by an increase in commercial pipeline. As of the end of last June, we were pursuing opportunities worth EUR 7.5 billion, up EUR 900 million this year.
While Europe remains the largest geography, we are experiencing an increase in opportunities in other areas such as in Asia and especially the Americas. Finally, before we analyze our financial performance, let me give you an update on our ESG developments in the first half of the year. Our commitment to sustainable value creation remains strong as our ESG principles are embedded in our development plans and in our day-to-day operational decisions. In these first six months of the year, we have worked hard and successfully to implement our sustainable strategy, which is centered around environmental sustainability, the value of our people and of the territories where we operate, and the innovation which relies on our technological DNA.
Our Net Zero task force is implementing a vertically focused action plan to reduce the emissions generated by logistics, procurement, the energy consumed by offices and travel, and finally, the activities at our construction sites. We have already engaged more than 20 suppliers, and we have implemented a carbon tracker tool to measure their emissions. While we maintained our best-in-class positioning in health and safety KPIs in our industry, we also started the action plan of our diversity, equality, and inclusion work group that carried out a self-assessment on gender equality based on the United Nations Women's Empowerment Principles and Valore D, a gender equal Italian group of over 200 firms where our group belongs. The outcome of these assessments have been positive and represented an important stimulus to continue with further initiatives, including providing internal training on these topics.
We are strongly committed to developing a sustainable supply chain, and as promised in our target for 2022, we have already carried out the social audit for five selected key suppliers in social high-risk geographies, while the number of ESG screened suppliers has increased to over 2,200. On the technological innovation front, alongside our portfolio of green technologies, we continue to develop our digital platform, which represent an important added value for our customers. We are proud of the achievement we have reached so far, but we are also committed to continuing our successful journey in order to further improve our ESG impact. Now I hand over the microphone to Fabio, who will discuss our financial performance. Then I will be back to provide you with some financial remarks. Please, Fabio.
Thank you. Thank you, Sandro. Our first half revenues grew 21.7% to EUR 1,615.4 million. Such an increase is mainly due to last year's acquisitions starting to provide a positive contribution to our top line. As growth continues to consolidate in the next few months, second half revenues are expected to be higher than in the first half, as communicated last May. Business profit was EUR 137.9 million, up 10.2%, thanks to the revenues increase. G&A were EUR 36.5 million, a decrease of EUR 4.5 million or 11.2%.
This remarkable achievement is due to our continuous attention to cost improvements across our organization. As a result, the percentage of these expenses over revenues has decreased from 3.1% to 2.3% over the last year. R&D has remained relatively stable, mainly driven by our green energy expansion. EBITDA was EUR 97.4 million, up 21.8%, with a profitability of 6%, in line with the previous quarters and with this year's guidance. Net financial charges were EUR 13.7 million, and were mainly impacted by a higher derivative mark-to-market valuation, also related to the buyback of our own shares and by a marginal increase of the gross debt.
Such positive operating performance has led to a consolidated net income of EUR 40.6 million, up 10.7%, and the group net income of EUR 42.2 million, up 5.5%. Moving on to the balance sheet, let's analyze the cash flow dynamics. Our adjusted net financial position has improved for the ninth consecutive quarter, and now stands at EUR 44.1 million. Such an improvement has been driven by a significantly healthy cash flow generation of EUR 149 million in the first half, as projects shifted gears in the second quarter and delivered over 116 million euros of cash flows. This positive cash generation more than compensated EUR 60 million in dividends and EUR 34 million in additional outflows due to taxes, net financial charges, CapEx, and acquisition of treasury shares.
We expect this virtuous trend to continue, in line with the guidance provided at the end of February. Let us now take a look at the working capital dynamics. Working capital has improved by about EUR 90 million to - EUR 95.3 million. Such an improvement has been mainly driven by the positive effects of project advancements on advances to suppliers and accounts receivables. The rest of the items do not present significant variations in the semester. I now hand over the microphone to Alessandro for his concluding remarks. Alessandro.
Thanks a lot, Fabio. In conclusion, the first half of 2022 has confirmed the pickup in pace as the major projects in the backlog are starting to drive this year's performance. As a consequence, we are expecting second half revenues to be higher than in the first half. Our green energy business continues to develop as new projects have been awarded and started, leading to a threefold increase in the backlog over the last 12 months. Overall, a record high backlog is providing a solid foundation to 2023 revenues and beyond. At the same time, our strong and growing commercial pipeline will continue to deliver new projects, both in the traditional and green energy businesses.
As a result, we reconfirm our 2022 guidance that was communicated to the market on February 25th, namely, revenues in the range of EUR 3.4 billion-EUR 3.6 billion, an EBITDA profitability in line with 2021, and an improving net cash position. Obviously, this assumes no major disruption from the current pandemic, and no material effects on the current geopolitical tensions to the economic and financial situation in the rest of the world. We will continue to consolidate our overall growth while expanding our existing green transition business to higher levels. This concludes our presentation, and Fabio and I stand ready to answer any question you may have.
Excuse me, this is the Chorus Call conference operator. We will now begin the question and answer session. Anyone wishes to ask a question may press star and one on their touch-tone telephone. To remove yourself from the question queue, please press star and two. Please pick up the receiver when asking questions. Anyone who has a question may press star and one at this time. The first question is from Kévin Roger with Kepler. Please go ahead.
Yes. Good afternoon. Thanks for taking the question. The first one is related to the outlook comment that you provide in the press release, Alessandro. You say that basically you could have some acceleration in the execution of some projects that could lead to higher volumes than expected. I was wondering if it's still, let's say, the same sentence that you had at Q1, or if it's another acceleration that you see on some projects, things like that. Just to check if it's the same comment or if there is an acceleration. The second one is related to the commercial pipeline. It's still very impressive. Order intake year to date is half green, half hydrocarbon.
I was wondering if you have any comments to make for short-term opportunities to secure in terms of contracts, something that could materialize in the coming weeks, months, maybe to bring some visibility to go to a book-to-bill that one at the end of the year? The last question is related to the Forex movement that you have in your coverage that impacts the net cash position by something like EUR 70 million. When should we expect those 70 million to revert in a way that it will support the net cash position by the settlement, please? That would be the third question for me, please.
Oh, thank you, Kévin. The first one for sure is extremely interesting. I believe that we have already demonstrated in the second quarter that the acceleration that we have planned can continue in the third and in the fourth quarter. Because differently from the first quarter, where for sure there were the Russian projects which have delivered a quite remarkable level of production. In the second quarter, the contribution from the Russian project was extremely limited. But despite this very limited contribution, we have been able to deliver a level of production which approximates EUR 900 million, which is a very, very remarkable level of production.
This is going to continue even in the third and in the fourth quarter, because in particular a couple of projects that are in our backlog and are presently under execution will enter into a more operating phase. As you know, EPC contract, when are in the engineering phase, it implies only of course man-hours. For sure, in terms of organizational efforts is the most important phase, but these do not generate any major volumes. As soon as the engineering part of the project is completed and enter into the procurement and the site mobilization, for sure, the volume of production is much higher than the first phase.
This is the situation that we are experiencing, in particular in the project we have been awarded in the United Arab Emirates in the last part of last year, and the project we have been awarded in West Africa, in particular in Nigeria. The first part of the acceleration already took place in the second Q, but this will more and more remarkable in the third and the fourth. This make it possible to achieve the target that we have reconfirmed, which are based, all of them, on already planned activities and projects which are already in our portfolio. Just to say that, the target do not rely on a new project to be awarded.
As far as the commercial pipeline is concerned, I believe that you have appreciated that, globally, including green business and the traditional one, the size of the pipeline is extremely high. Of course, also leveraging on the market situation, which is supporting and even hastening the final investment decision of some clients, in particular as far as the gas monetization is concerned, in particular in those countries where there is an abundance of gas, and I am referring to Middle East. I mean Saudi Arabia, I mean Qatar, Abu Dhabi, again, as well as the countries which are close to this Mediterranean Sea, so the North Africa countries, all of them, as well as North America.
All these countries have an abundance of gas, or in some situation, for example, in North Africa, in order to satisfy their commitment to supply gas to Europe, they have to develop new gas fields. As soon as a new gas field is put into production, it is necessary, of course, to separate the gas from the other components, other gas, liquids. Of course, all these components, both liquid and noble gas, can constitute the feedstock for our petrochemical installation. There are opportunities, both as far as the gas separation plant are concerned, as well as then in the subsequent transformation of the associated liquid and noble gas into the traditional commodity expressed by the petrochemical projects.
This, as far as the traditional business is concerned, from which we expect new awards, let me say, as far as the timing is concerned, you know better than anybody else that it is not so easy to identify the period, because of course this depend on a number of factors. Based on what we are appreciating from the market, we do not exclude the possibility that new awards could come on stream and in our backlog in the third quarter, and then in the fourth, maintaining our target, which is traditionally to replace the backlog, which is converted into production with new orders. EUR 1.1 has been already awarded, but we are extremely confident that very soon other orders in the traditional business will be added to our backlog.
More than that, what is more important, I believe, is the pipeline in the green business. Green business is extremely exciting for our organization, all of us. Believe me, we are really excited about the successes that we have secured in the first half of the year, but also because, as we are used to say, the best is yet to come. We expect to have new good news in the short term, in particular in this business line on which we are dedicating a lot of effort. Please be confident that very soon we will be able to achieve the target that we have always communicated to the financial community, which is revenues equal to new orders.
We are really confident to be able to maintain this target also this year. As far as then Forex is concerned, I believe it is much better that Fabio will provide for sure the most appropriate answer.
Thank you, Fabio. Kevin, your answer was the Forex movements and the approximately EUR 70 million that we recorded in our net financial position. One clarification. First of all, this is an accounting treatment and is related to the derivatives we have in place to cover that share of our US dollar-denominated risks, which is not naturally hedged by costs in the same currency. It covers the portion which is uncovered. As you know, the US dollar has experienced a relatively high appreciation versus the euro in the first six months of this year.
If the question was how long it will take for this amount to be absorbed, I would say that the majority of it, the large majority of it, is going to be absorbed within the next 12 months, with a minority portion thereafter.
Okay. It's perfect. All very clear. Thanks a lot for that. Very clear.
The next question is from Emanuele Negri with Mediobanca. Please go ahead.
Yes. Good afternoon, everybody, and thanks for taking my question. I have two questions. The first one is about the profitability of the green energy business unit. I wonder if you see some differences between the green-
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Massimo Bonisoli from Equita speaking.
Good evening, Alessandro and Fabio. Thank you for taking my two questions. I have actually one question and one clarification. The first question is regarding your green project. Following the Italian government crisis, do you expect the green project in Italy you showed in slide 13 to be somewhat delayed or to have some months delay because of the process to be awarded? The second question is regarding back to your comments on gas monetization. If I got correctly from your statement, you're considering also upstream project in gas separation like the one in Algeria you have been awarded in 2020. These projects are coming on top of the petrochemical and fertilizer, which are your core business in gas monetization.
Let me try to answer to your first question. I believe, Massimo, that whatever will be the political environment and the political guidance of our country, I believe that all of them must. It is not a choice. They must continue to maintain the strategy which presently is in place. It's not a choice. For this reason, we do not believe that there could be any major changes and accordingly any major delay compared to what was the original plan sustained by the existing government. I don't believe that there will be any modification in what the government has already decided. As far as the gas separation plant in Algeria, of course, you are identifying just a single project.
In North Africa, and I am referring to Algeria, of course, but there is also Egypt as well as Libya. All of them, all these countries are enhancing their gas production volumes. Accordingly, in all these three countries, there are potential projects. Some of them have been already tendered, and we are waiting the final decision of the client. Some of them, based on our screen, on our radar, and based also the information provided by the potential client, they will come on stream very soon with an accelerated path to arrive at the assignment to the contractor. It is not restricted just to say that the opportunity in the what you mean, you define upstream projects, but in my idea, we are moving between mid and downstream.
I believe that it is more appropriate to consider those projects in this part of the energy value chain. These are not opportunities which are restricted only to a single country. All the North Africa, the Mediterranean countries are interested in leveraging on the situation, on the shortage of gas, which of course, we are experiencing not only in Italy, but in Europe. Accordingly, all these countries have hastened their decision to proceed with the development of new gas fields in order to serve the additional quantities which Europe is requiring. Of course, we could participate in the enhancement of those infrastructures.
Very clear. Thank you very much.
We have again the question of Emanuele Negri with Mediobanca. Please go ahead, sir.
Yes, sorry, I had some trouble with the connection. The first question I was making was relative to the profitability of the green energy business unit. I was just wondering if there are still some important differences in the project you are taking from the green energy and the hydrocarbon business unit in terms of profitability. The second one is about the evolution of the item, other non-current assets, which increased by circa EUR 60 million in the first half of the year. You can provide us some more details about this evolution. Thank you.
Based on our expectation, since the green business implies a higher level of technologies, in the short, medium term, the green business should express a premium compared to the traditional margin delivered by the traditional business. Of course, so far, we are extremely happy about the increase, the growth that we have experienced in the first half, which has led to the possibility to earn an EBITDA close to 5%, not yet equal to the traditional business, because the structure, the organization that we have created in order to properly serve both the technological issue as well as then the realization of the green business, the volumes are, how to say, not yet enough to absorb completely the structure, the fixed cost.
Since we expect to grow significantly, even in the second half, at least doubling what we have achieved in the first half, but more and more, as I said before, it is a target short but medium, most likely in 2023. We expect that the marginality delivered by the green project could be higher than the traditional green business, because the volumes will make possible to adequately absorb the cost structure that the green business unit has on board, plus the margins associated.
Of course, this will depend a lot, and we are confident on the licensing that we will achieve. We will place on the market as a consequence of those projects, and for the recognition of the highly technological services and the proprietary equipment that we are able to serve the client with, thanks to our own technology in the green business. It is just a matter of combination of high value services and technology, which we are ready to provide the market with our own solutions, and growth in terms of volumes, which will for sure experience already in the second half of the year, and then even more in 2023 onward. There was another question on the evolution of the other non-current assets.
If I got it right, where you spot a EUR 60 million increase, the EUR 60 million approximate increase is the retention component, which is withheld by the client and is released at certain stages, typically when the projects are handed over, and it's related to a number of projects in execution.
Okay. Thank you.
You're welcome.
Gentlemen, there are no more questions registered at this time.
Thank you to everybody, and let me wish you a very good vacation to all of you, and see you on September as soon as you will return from your vacation. Thank you very much.