Good afternoon, everyone, and welcome to Solaria 2024 first quarter result webcast. My name is David Guingand, the head of IR of Solaria. I am joined today by Dario López, our Chief Operating Officer, and Fernando Rodríguez, our Chief of Development. During this call, we'll discuss our business outlook and make forward-looking statements. These comments are based on our predictions and expectation as of today. During this presentation, we'll begin with an overview of the results and the main development during the period given by our COO, Dario López. Following this, we'll move on the Q&A session. I will also highlight that you have to submit all your question via the web. So thank you very much again, and I will now hand over the word to Dario.
Thank you, David, and thank you everyone for joining this conference call. Starting with the results of the main highlights of the Q1, we would like first to express our main message of this presentation, that we are able to keep delivering growth and profitability even in a low price scenario. In this case, as you will see, we have increased the generation 22%, we have increased the sales of the company 6%, and we have reached an EBITDA EUR 41 million, which is, our record. At the same time, we keep having more and more visibility on the portfolio of the new permits.
You will see also that we have started a program of pipeline rotation with the sale of some assets, and at the same time, we continue the work to reduce our merchant exposure by 50% before the end of this year. Also, very important, Fernando will explain with me the new steps we are taking into the data center and artificial intelligence business. Regarding the highlights of this quarter, first, we would like also to talk a little bit about the CapEx. We have been able to close modules, the price of the modules, at a record low price. We announced last May that we closed the sale, the procurement - the purchase of 435 MW of modules at EUR 0.0911 million per MW, which is an absolute record of all times.
At the same time, we continue working on the PPA market. We see prices in the range of the forties, and this allows us to maintain our 12% IRR return target. Entering the results of the Q1, as you will see, we have increased the generation of our assets above 400 GWh, which means a 22% compared with the Q1 of last year. And at the same time, we have increased the sales of the projects of more than EUR 40 million. This year, we have around 24 million of energy and 60 million of infra. You will see that even in a very low scenario prices, we have been able to provide good results.
In terms of revenues, you will see we have an increase of 9% and EBITDA plus around 4% additional. In terms of the pipeline development, we, as you will see, we have around 1.7 GW fully operational. We continue working on the construction of 1.4 GW that we have all of them with financing secured, which is also very important to highlight. And regarding the next, the next project, we have another 1.2 GW additional, where we are able. We have obtained, we have received in the last days, new permits. For example, in the case of Oliva, 175 MW, the Autorización Administrativa de Construcción, the AAC, which provides us more visibility for this.
Regarding the remaining portfolio, we continue the development on the whole portfolio with the projects of Basque Country, Catalonia, and Portugal. Very important, the projects that we have in Italy, where we have a portfolio of almost 3 gigawatts. And as you will see, we're following the same strategy in terms of flagships. This is very important to highlight, because, as you know, with the recent developments of the Italian government, they are also focusing on very large projects, which seems to that our strategy is correct in these places. I would also like to highlight the wind situation, where we have already installed our measurement towers, wind measurement towers, and proves the advances in this business. In terms of the cash situation, here you will see that we have continued the investment process with another EUR 45 million of investment.
What is very important to highlight here in this slide is that it does not include the proceeds of the infra business and pipeline rotation, which mean that we, it's a significant, additional revenue of around EUR 20 million that we have received in May. Pipeline rotation. As you know, we have been working on the sale of minority stakes strategic portfolio in the past, especially for the Basque Country projects, where we already sold a 25% stake of a package of 100 MW. We are working, as we announced some time ago, on the sale of a package of between 25%-50% stake of another 500 MW in the Basque Country. This is something that we have already announced, it is very well known.
At the same time, what is new, it has given our capacity to generate new pipeline. We have taken advantage of this capacity to sell some of these assets, and some of this pipeline that we consider not strategic. In this case, we have identified 500 MW of projects, as we say, are non-strategic, where we are selling between 50% and 100% stake, projects located in Spain and Portugal, and all of them pipeline at a very early stage of development, which means it has not, of course, reached ready-to-build situation. For this portfolio, we can confirm that we have closed the sale of 40% of it, and this means that we have been able to include in our results around 30 percent million, 30, sorry, 30 million, well, sorry, EUR 13 million of income.
Finally, very important, the part of the PPAs. We are working on the reduction of our merchant exposure. Our objective is to reduce it by 50% before the end of this year. In order to do that, we are working with different utilities. We are negotiating very similar PPAs to the ones we have negotiated in the past. You can see here, all of them 10 years, solar profile, for a portfolio of around 400 MW, all of them for assets already in operation. And as we have said before, the prices we see, it's around 40 EUR/MWh. I will now hand over the word to Fernando.
Thank you, Dario. Well, as we have recently informed, Solaria is entering data centers market. Considering our current context and the difficulties to ensure the grid access for new consumption, we plan to use our own infrastructures portfolio as high-voltage lines, substations, communications with backbone fiber optics, and so on, and the power of our green installations to accelerate and boost digital facilities and data centers. As all of you know, artificial intelligence in data centers is going to require large amounts of power and associated energy. For this reason, we have incorporated a specific company in the group for this strategy, and we are firmly committed to do it, and jointly with our LandCo, Generia, in order to develop our new project portfolio in this sense.
In this route, grid access and connection permits for energy consumption have been already granted to Solaria for a total amount of 155 MW in new data centers. Also, we are managing additional portfolio, additional pipeline, that, for the moment, is close 1 additional GW. Additionally, we are up to now in contact, and also keeping conversations, well, with the main players in the industry as hyperscalers, and working with all of them in the possibility of a global agreement for this new strategy. We consider that Solaria is going to be a key player, considering our infrastructure portfolio that includes solar and also hybridization, including wind, batteries, power, and communications, that will allow Solaria to develop iconic clusters for that purpose, sorry, including these new infrastructures as data centers.
Regarding all of this, I take the opportunity to inform about our strategic update in energy and digital transition that will take place in September. I will now hand over the word to David.
Thank you, Fernando. I will now open for Q&A session, and once again, thank you for your time.
The first question are coming from, Jorge Guimarães, from, JB Capital. First question is: How much asset rotation gains were booked in the first quarter, 2024? And what are our expectation for asset rotation gain in 2024?
In terms of the asset rotation books, we are around EUR 30 million, and net, around EUR 11.5 million. In terms of the rotation, I mean, we will continue with the process. I mean, we just... You know, we have suffered low prices in the market, but we have been able to compensate to provide good results using a perform-- a capacity that we have. That is, to generate a pipeline. That is something that we hadn't done in the past, and that we are able to do now. We feel comfortable with the situation, we feel comfortable with the results, and also with the consensus of the market.
Second question are coming from, Fernando García, from, RBC. Can we clarify, a split, no, in, in the sales, from sales and infra sales? Can we give the, the split? And, second question is that, personal expenses and OpEx is a good figure for the following quarters, or if we expect some increase in personal expenses and, and OpEx.
Well, in terms of the sales, we have said before, in terms of energy, it's around EUR 24 million, and in terms of infra, it's around EUR 16 million, of which, 13 belong to this, pipeline rotation, process. In terms of the OpEx, we... You know that first we have suffered the impact of the generation tax. That is, something new that we didn't have in the past, in the last quarter. And yes, I mean, this is a reasonable number, and we are not expecting, any relevant increase in the, in the OpEx.
Next question are coming from, Enrico Bartoli from, Mediobanca. How much capacity was fully sold, and, how much of this capacity, sorry, is, where only minority stake have been disposed? So how much capacity has been fully sold, or is there is minority in this, context?
In this case, it's a full sale. There are no minority stakes in this case. So it's a 100% sale of the forty. It's 40% of 500, 100% sale.
Next question is also from Enrico. Which could be the timing for reaching the total 500 MW disposal?
I mean, it's difficult to say, but I mean, we are working on the process. I mean, it's, you know, it's... always the sale process are complicated and takes time, the due diligence and everything, so we prefer not to give accurate dates.
Next question are coming from values analyst Eduardo González from Grupo Santander, Fernando García from RBC, or Daniel from Bestinver. If we can give some color regarding the EBITDA for this year, if we are comfortable with this consensus expectation for 2024.
Yes. I mean, as we have said before, this is Q1. Even in this very complicated scenario with low prices, we have been able to reach and even surpass the objectives we have for this quarter. I will say, this is step by step. We will keep on working to be in the consensus.
Next question is coming from Tomás Reis from CaixaBank. Have we changed our strategy to maintain a level of 70% secure and 30% merchant capacity?
Yes, as you will see, I mean, there is not a significant change, that we are going to have everything, PPA. But as you will see, our objective is to reduce a little bit our merchant exposure, and I will say our objective is to be around 20% by the end of this year.
Next question is coming from a few analysts also. Do we expect to connect to the grid some asset in 2024?
We are working on it. As you know, this does not depend only on Solaria. We also depend on the developments on the grid. That is something that we all suffer, and also we depend on the permits of the authorities that usually take a long time. As we always say, it's not only that you finish the project, you need between 1, and now even more than 4 months, to get the project connected once it is finished.
Next question is coming from, Manuel Palomo from BNP Paribas. Can we please, give some, additional detail about the asset sale, up to 500 MW of non-core pipeline? What type of project are we talking about? Who is the buyer: industrial, financial, utilities?
Well, I mean, we cannot disclose the name of the, of the buyer at this moment. What we can say is this, and we have explained before, we have a huge capacity to generate a pipeline. That is something that we have proven, before, especially quality pipeline, a pipeline that is, possible to execute. Well, we have taken advantage of this capacity to leverage our results, okay? In this case, what we are also selling are projects in a, in a very early stage of development. Good quality projects, but in an early stage, so it's not affecting at all our expansion plans. So - and this is what we can tell, okay?
Next question are coming from, Jorge Alonso from Bernstein. For new capacity in 2025, 1 GW, at what stage, the financing is? Would the bank require, PPA in advance and a capacity addition in 2024, 2025, or 2026?
Okay. In terms of the financing, I mean, we prefer to start receiving the permits. We have suffered, you know, in the past, the delays from the government. They postponed 6 months the work of the permits from January to July. It's. We prefer to see the permits before going into the financing stage. The good news is that we have already received some of these permits, and we are receiving, hopefully, in the next weeks, the remaining permits, and from that moment on, we will start with the financing project. The financing project, as you know, we have a line with the European Investment Bank that covers 50% of our financing needs, including all these projects. And, of course, this financing line does not require a PPA.
Another point is that we will start negotiating and everything, but we do not need a PPA to finance these additional projects.
In any case, just to be clear, all the capacities that is today under construction is already financed, okay? We have 1.7 gigawatts in operation, 1.5 under construction, and all these capacities already fully financed. Next question are coming from some analysts regarding PPA. If we can give some more detail on what we are doing or what we want to do this year regarding PPA, and duration of the PPA, and price of the PPA we are seeing today in the market.
Yes, in terms of the PPA, you know, we have significant experience in this market. We are very well known between the off-takers, especially the large ones. Well, we are negotiating with them, especially a large package of projects, which are projects already fully operational, with no construction or connection risk. It's a package of 400 MW. The PPA we are negotiating for them is a 10-year PPA. In some cases, we are working on solar profile, in other cases, a pay-as-produced. Well, the prices we see are around 40 EUR/MWh. The idea is to close in the following weeks.
We have some, also some question from a few analysts regarding the data centers. On data center new offering, do we target network operator, locator, hyperscaler? With hyperscaler, don't we think we have the balance or not? If we can make some comment on that.
Well, as we said, we are working on deploying this new portfolio. We are evaluating different possibilities, and we are trying to focus in the hyperscaler type in order to optimize the high volume or high power kind of project in this case. Okay.
So maybe a last question. Can we give maybe some more color about the capacity that is today under construction, and the time of the connection, and if we will get EBITDA in 2025 from this 1.5 gigawatts that are today under construction?
Well, of the projects we have here, in some cases, we have very advanced status of construction. For example, in the case of Centaurus, some projects of Castilla y León, also Peralveche. Of these, for example, these projects, they already have completed most of the connection work. We have completed the substation. We have made a huge effort for the connection, but as I say, this does not depend only on us. I mean, it depends also in Red Eléctrica, that they have to be able to develop the projects. They also need permits from the ministry, which has not been providing permits in the last months, so it has been taking a little bit longer than expected, not only for Solaria, but also for Red Eléctrica.
Well, of course, we are trying to be able to provide some EBITDA to get some EBITDA of these projects this year. But, well, working on it.
So I think we are done for this today's call. So thank you, thank you very much, and I let Dario just close this call.
Thank you very much for being part of this conference call. As always, our investor relation team will be available for any additional information you may require. Thank you, and have a great afternoon.