Good afternoon, everyone, and welcome to CELTECH Power Holdings First Half twenty twenty one Results Conference Call. I am Maritzel Perez, Head of Investor Relations, and I'm joined today as usual by Soltech's CEO, Raul Morales Powhati's CEO, Pablo Othin and Soltech's CFO, Jose Munoz. They will guide you through the H1 and Q2 twenty twenty one results. And afterwards, there will be time for Q and A. From now, you can upload your questions to the platform.
Thank you. And now let me hand over to Raul. Please, Raul, go ahead.
Thank you, Maricel, and good afternoon, everyone. Now let's start with the highlights of the period. I'm now on Page number 5. For the first half of the year, revenues reached €87,100,000 Adjusted EBITDA for the first half was minus €19,100,000 and net profit of minus 19.9 €1,000,000 and net profit of minus €19,900,000 Net profit pro form a came in at minus €16,900,000 As Jose Nunez will explain, net profit pro form a does not include the temporary net impact of Brazilian reals. Hedging derivatives closed at the beginning of June for several projects.
If we focus on the 2nd quarter, revenues stood at €58,600,000 a 7% increase versus Q2 2020 And a 106% increase versus the Q1. We are highlighting the 2nd quarter since Q1 revenues registered lower activity levels. Revenues in the second quarter have increased versus the previous quarter as anticipated, and the second half of the year will be better than the first one, Targeting from €395,000,000 to €440,000,000 for the full year. Jose Nunez, our CFO, We'll go into more detail later on. Our operational indicators keep showing record figures.
This is a sign of the strength of our business and the strong demand we continue to have for our products. In Soltech Industrial, Backlog continued to grow to €363,000,000 and pipeline reached €2,900,000 in that period. As for the Project Development division's Povirtis, we have rotated 679 Megawatts in Spain and Italy During the 1st 6 months of the year, as Pablo will explain later, pipeline continued to increase significantly, Standing at 7,100 megawatts, and we have entered in a new region, Denmark. Let me remind you, on September 8, we released our guidance for the full year 2021. In Sonteq Industrial, we expect revenues to be in the range of €395,000,000 to €440,000,000 Regarding EBITDA margins, we expect them to be in the range of minus 1% to 1% for Soltech Industrial.
The most relevant adjustment is produced in the margins of the Industrial Division, mainly due to the current conditions in the sea freights market, The availability of human resources in the regions where we have operations and the shortage of certain electronic components. It is not a problem of revenues. Our backlog has continued to grow at all time highs, and we are seeing a strong demand of our When it comes to properties, We are expecting a pipeline of 10 gigawatts for the full year, in line with our expectations and the assets rotated partially or totally From 600 to 1000 Megawatts. Due to the before mentioned conditions, we have analyzed the cost of opportunity related or linked the rotating assets in a very early stage, I decided to postpone certain rotations to seek better margins. Turning to Slide 6, let me go through the global disruptions that we are currently seeing in the industry.
How are we how are they impacting our manufacturing process and the actions we are implementing to mitigate them? Shortage of electronic components may potentially increase our supply chain pressure in the 2nd part of the year. Secondly, the increase of the prices of raw materials, mainly steel. As we have explained on several occasions, we pass through the steel prices to our clients. Additionally, we are demanding additional guarantees to ensure commitments are met.
Regarding the delivery of our tracker, is important to reinforce that it's been affected by the most significant disruption for us, which are the changing conditions of the international logistics. And finally, the installation. Here, what we are noticing is the lack of qualified personnel in certain countries. Additionally, Mobility restriction in certain regions have contributed to promote this bottleneck. The 2 most significant disruption for us nowadays are logistics A lag of qualified personnel in certain countries.
As we explained, we are working hard to mitigate these impacts. We are changing the delivery terms and conditions of our products to avoid the impact of prices changes in international logistics. This is free on board or different origins near destination to minimize the logistic impact. When possible, we use break bulk instead of containers. We are also closing new agreements with suppliers to provide us with greater international flexibility, prioritizing those that are closer to the projects to decrease freight movements as well to reduce their environmental impact.
We are also taking additional measures to help us recover profitability. First, we are implementing changes in international structure to face these new challenges, such as the separation between truckers, supply and services to improve accountability. 2nd, we are also making changes in PowerTeams business model by temporarily reducing asset rotation to achieve higher value. This is based on the idea that in the current environment, we can be more efficient By attaining greater integration covering the whole value chain, for instance, Rotelina COD. Paolo will provide you more detail later on.
I'm now on Page number 7. We are taking advantage of the before mentioned disruptions to improve our value proposition and reinforce our organization to capture value. A very relevant strength of Soltech Power Holding is our vertical integration and global diversification that allow us to capture value through All the value chain and avoid risks in certain countries. Global disruption have been asked to efficiently implement new measures to adapt the company to these new challenges and improve our processes. We are adopting the development study to improve profitability by delaying the rotation of certain We remain at the forefront of the industry in the innovation.
During 2021, we have launched A new product, SM1, a 1P configuration tracker to be flexible and adapt to the needs and requirements of every market and every customer. And last but not least, we have recently launched a new concept, the Cobaltec, to be able to develop sustainable So our plans with a positive impact in the environment, the economy and the local communities in which they are located. As we can see on Page 9, we have reached a track record of 9.3 Gigawatts, positioning Soltech Power Holdings as the 3rd global Regarding our diversification, Latin America accounts for 46 percent of our delivery gearbox followed by North America with 26%, Europe with 18%, Middle East 7% And Asia Pacific, 3%. Going into the business on Page number 10, we continue to register all time high figures in our At the end of June 2021, our backlog reached €363,000,000 a 91% increase year on year, which accounts for 3.7 gigawatts. Despite the difficult market conditions, we are demonstrating a strong contract housing capacity.
A good example are the recently signed project with Moss and Associates, which has strengthened our position in the U. S. Market, a key market in the solar and trucker industry. Our pipeline also increased 35% year on year, reaching 2.9 €1,000,000 which corresponds to over 25 gigawatts. Poweutics is contributing to Soltech's backlog with 26.8 €1,000,000 or 225,000,000 and with €720,000,000 or 1,600,000,000 earwuds to the pipeline.
Based on the strength of these operational indicators, we can expect the revenues for the 3rd Q4 of 2021 to reflect a significant increase in the
Glad to be with you all today. Aortis made significant progress through the year towards our 2021 goals, namely achieving a 10 gigawatt portfolio, Doubling the number of markets in which we operate and continuing with our asset rotation strategy. Our pipeline stands at 7.1Q1 at the end of the first half. We have 7.22 Megawatt in backlog. Diesel projects fully derisked and that we could start construction within the next 6 to 12 months, 887 Megawatt in advanced stage.
Most of these projects have already been partially rotated and provide cash flow to the company. 2,048 Megawatt of Projects in Early Stage and 3,426 Megawatt of identified opportunities, Projects in early stage of development and with a probability of completion under 30%. In summary, we are growing as predicted in Brazil and Spain It must faster than anticipated in Italy. On Italy in particular, we anticipate that the company will surpass the 2 gigawatt goal in this 2021, Positioning PowerTees as one of the lead developers in the country. PowerTees is currently present in 6 markets: Brazil, Spain, Italy, Colombia, Denmark and the U.
S. Our goals for the coming months are to increase our footprint in new markets, mainly Colombia and the U. S. And laid out the foundation for further expansions. This expansion strategy is key for the company's success in the long terms as these new markets will become the key contributors to Powhati's P and L from 2023 and beyond.
Besides, By becoming a global developer, we are reducing dependence to any specific market and potential regulatory changes, such as those we just This is the Royal Decree 17-twenty 21 of September 14, but which it got regulated the crude The oil decree was clarified few days after its publications And these amendments appear to have reduced the final impact to the solar industry. I would like to note that at this point in time, no Power This project is affected by the Royal Decree 17-twenty 21. On Megawatts Rotating, as of June 30, PowerTis has sold 6 79 Megawatts, mainly in Spain and Italy. This figure includes 2 49 Megawatts that we transferred in December 2020, The bulk of the megawatts transacted in this 2021 are coming from Italy, And we will continue with that trend for the remainder of the year. Our Italian portfolio is very strong and we have made additional closings through Q3 2021.
If we look now at Brazil, current market conditions are challenging for asset rotation at early stage. Thus, We recognize that it's best for the company to hold on to the projects and to rotate them at later stage. In Brazil, PowerT is building 2 projects that totals $225,000,000 In Spain, beyond the projects in partnership with Total, We have managed to build a very attractive and valuable portfolio. There are fewer and fewer new good projects in the country and we are very proud of our achievements in 2021. As I noted before, we are not affected by the royalty decree seventeen-twenty 21.
Regarding new markets, we are still in early stage and we'll start seeing contributions in the coming months. Now let me hand over to Jose Nunez to display the key financial metrics for the period.
Thank you, Pablo. Good afternoon, everyone. Let's have a look now at our first half and Q2 twenty twenty one financials. Let's start with a quick review of our key metrics for the quarter. On Slide 16, we can see that our revenues for the Q2 of 2021 increased 7% to €58,600,000 compared to Q2 2020.
However, adjusted EBITDA decreased €3,900,000 to negative €12,000,000 At the end of June, The backlog registered by Solteca Industrial reached a new record of €363,000,000 It has been already explained before. On Slide 17, we have the split back quarter for Soltech Power Holdings and our 2 divisions, Soltech Industrial and Powerties. Consolidated revenues in the Q1 were affected by delays caused by the increase in the price of raw materials and solar PV equipment, We have seen a slight recovery in Q2 2021. As for consolidated EBITDA and net profit, they have been impacted by the disruptions already explained by Raul. Consolidated adjusted EBITDA reached negative €19,100,000 in H1 2021 with Negative EUR 17,900,000 coming from Salt Lake Industrial and EUR 400,000 positive coming from Pouvertis.
I believe it is worthwhile to point out that the consolidated adjusted EBITDA also includes the corporate expenses incurred by SaltaFore Holdings and the consolidation adjustments. Net profit for H1 2021 was negative €19,900,000 while pro form a net profit totaled Negative 16.9 percent. This pro form a net profit excludes the temporary net impact of Brazilian real hedging derivatives Closed at the beginning of June for several projects, Casablanca, Futura, Arakan, Pedernopolis. Since at the end of June, We did not have the impact of the underlying liabilities they were designed to hedge against. And the mark to market valuation of these instruments generated a short term negative result Now let me provide additional details about the 2nd quarter results on Slide 18.
As explained before, our consolidated revenues for the 2nd quarter reached €58,600,000, euros 3,700,000 increase compared to Q2 2020. Consolidated adjusted EBITDA reached negative €12,000,000 a decrease of €3,900,000 compared to the Q2 2020 figure. Net profit totaled negative €15,300,000 at the end of Q2 2021 compared to negative €9,000,000 at the end of the same period 2020, while pro form a net profit was negative €12,300,000 for the quarter. If we look now at the 2 businesses, Salt Lake Industrial sales went up to €59,600,000 EBITDA was negative €9,300,000 While net profit and pro form a net profit were negative €13,900,000 negative €10,900,000 respectively, Polvertis, on the other side, booked an EBITDA of negative €1,700,000 and a net profit of negative €500,000 due to the lower rotation of assets in the quarter. On Slide 19, we can have a look at our cash generation during H1 2021.
We started the year with EUR 125,700,000 of cash. From there, we had cash inflows from operating activities of EUR 17,500,000 Investment activities added also €300,000 while financing activities consumed €13,600,000 Resulting in a cash position as of June 30 after considering also the effect of exchange rate variations of 130 €200,000 On the next slide, Slide 20, we can see that we reached a net cash position at the end of June 2021 of €20,400,000 Resulting from €109,900,000 of gross debt, mainly debt with credit institutions and a cash position of €130,200,000 As we explained in the call we had at the beginning of September, since we do not expect to rotate the 2 assets we are currently developing in Brazil, Araxa and Fernandopolis, Until construction is completed, our net financial debt at the end of the year will be impacted accordingly, resulting in an estimated increase of €120,000,000 €130,000,000 Without further delay, I'll leave the floor now again to Raul to present the closing remarks. Raul?
Thank you, Jose. As a key takeaway for the presentation, revenues visibility for 2021 remains strong, driven by the record figures of our backlog. We continue to have global disruption affecting the sector and we have to highlight the changes in the conditions of international logistics The shortage of personal resources. We recently released our guidance for the year. It is the visibility we have for the year taking into account the global disruption have been mentioning.
But let me insist, business prospects remain unchanged in the mid term despite current disruption. There is a strong growth potential for renewable energies, more specifically for solar energy. It is a worldwide reality. And to conclude, Soltech is fully committed to ESC. We have recently launched the concept of Equitable Tyk to refer to our projects that are fully aligned with the environment and communities where they are located.
We are a sustainable business and our commitment remains as strong as ever. Thank you.
Okay, great. Thank you, Raul. I think we can move now to the Q and A session, starting from the questions we collected until now. So let's Let's kick off with the first question coming from Georgi Guimaraes from JB Capital. Please, Jose, go ahead.
[SPEAKER JOSE RAFAEL FERNANDEZ:] Okay.
Good afternoon, Jorge, we have several questions. I'll take the first two and then Pablo and Raul will answer the other ones. So the first one is, The cash flow generation in the 2nd quarter seems to have come from working capital, namely client advances. How sustainable is that? Actually, that's not entirely true.
In fact, If you look at our financials, there is a significant portion also of advances to suppliers. So we have advances from customers and also advances from supply to suppliers, sorry. In fact, advances to suppliers are basically about €17,000,000 So in essence, what we've been able to do regardless of the results of the first half of the year is to improve the way we've been managing the collections and the payments of the company, the cash flow at the end of the day of the customer. We expect this trend to continue more or less in the same way in the coming months. The second question is, what is the full year 2021 tracker volume implied in the revenue guidance for So, Tech Industrial.
Well, it's basically, as we explained in our last call, around 4 gigawatts, okay? A little bit less than 4 gigawatts. So now I'll leave the floor to Raul.
Okay. The third question is what is your current volume expectation for Solte Industrial In 2022, 4 gigawatts, well, obviously, as 4 gigawatts is going to be our expectation for this year, next year will be higher than that. Still, we have to evaluate our prospects, but it will be slightly more than 4 gigawatts for sure.
Four questions. Good afternoon, George. What is your expectation about the average selling price per megawatt in Powerpiece going forward? We maintain the same guidance that we provided in the previous call In which we reduced the expectation for Brazil from 4 to 6 times to 2 to 3 times and we maintain the guidance for Spain and Italy Moving forward. Now question number 5.
On a recurring basis, what percentage of projects do you expect to sell at RTB COD per year? Well, we only have changed our view for Brazil at the moment as we speak. And more specifically, we have set our view for Asia and Petronopolis, Two projects that we anticipate to rotate at RTV and now we're moving to COD. For the rest of the markets, no changes there.
Okay. Next question is from Virginia and Regina Saab. Number 1 is, do you see it It's feasible to install 3 gigawatts of trackers in second half of twenty twenty one. Well, it's not To install, so we are talking about supply. Obviously, to get the respective volume of 4 gigawatts, say, in first How about the year?
We delivered about 1. So yes, we are going to deliver 3 year ones for the second half of the year. Yes.
Okay. I'll take the second one. It says, in poverties, how much is the CapEx to be spent in getting the assets you're not rotating from ready to build To COD, well, essentially, as I explained during the presentation, we're talking about EUR 120,000,000 €130,000,000 That's the impact that we are Estimating for our net financial debt, that's the full amount of the CapEx of the projects. The next question is number 3, So, yes, your net debt will go up. Do you see a risk of not being able to provide warranties for new orders?
Actually, we do if you remember, We do have a bank warrantees line for a total amount of €110,000,000 That amount is there for us to use, obviously. And it does not vary based on the net financial debt we may have at any point in time. Obviously, if we need Additional warranties because the activity is able to peak even higher than what we are currently expecting. We will have to go to market to try to get some more. But for now, based on our estimates, the amount that we currently have, €120,000,000 should be enough to be able to cope With the volume we may need in the future.
The 4th question is, do you see Average selling price for truckers moving up on higher cost inputs. Obviously, ASPs are increasing. And yes, we are passing through all the new costs Of transportation and steel, so they are increasing price, yes.
Okay. Next question coming from Georgi Guimaraes from JB Capital. This one is from Raul.
Number 3. What is the current logistics situation implying in terms of cost per megawatt sold? Well, It depends on the income term because as we said before, now we are moving our science study to either FOB or Delivered at place, but manufactured closer to the projects. So it's let's say, this is not easy to give A certain number. But in some cases, when the income term is delivered in place, we have seen up to $0.05 a 1, so as high as that.
But obviously, if we Supply in an FOB basis, the cost I mean the transportation cost is very low.
Okay. Next question from Virgenia Santamalari from Santander. The first one is for Raul.
The question is, do you see BERDOLA's announcement today to halt its Renewables investment in Spain given government's announcement, does this affect you? In our particular case, it's not the question because Usually all these decisions are taken with all months in advance and we didn't have any party with them in Spain. So it will not affect us. The second part of the question, do you expect others to follow? Obviously, it's impossible to know what other I'm going to do.
We believe this is a temporary situation that it has to be clarified in the next few months and we are positive about this.
Question number 2, do you still need to book in 2nd semester of 2021 for already rotated Assets in power or has all been recognized already. So we do not have any pending recognitions for assets sold in the first Semester, we do have though additional rotations due in the 3rd Q4 of this year. There is another question. Pao Ortiz, you speak about Colombia, but it is not shown in the slides. Well, we in Colombia, we entered the market through the 1st semester.
So we would start showing Growth in the market in the 3rd and the 4th quarter results of this 2021.
Okay. Next question from Miguel Medina from Armanex. This one is for Jose.
Okay. Afternoon, Miguel. It says, will you continue to hedge Brazilian reals in the future development activity in Brazil? It seems that hedging Brazilian reals Against the U. S.
Dollar is not cheap. Does it have any impact on the IRR of the project? Okay. So Let me just provide a quick summary of what we're doing in terms of hedging against foreign exchange fluctuations. So Basically, our policy is to hedge any potential open position we may have both on the Development activity and also on industrial activity.
The comment that we made during the presentation regarding The pro form a net profit calculation is basically related to the industrial activity, not To the development activity, just to be clear on that particular side, okay? And our policy, as I said, is basically to hedge against those variations. We're doing it on every single occasion as soon as we can, okay?
Okay. Next question from Jan Richard from Berenberg. This one is for Pablo.
Why is it more challenging to sell early stage assets in Brazil? Unfortunately, there's not just one simple answer to that And it could take us hours to discuss about it. The reality is that we just face a very volatile period in a time that we need to enter into the construction of the assets. And that basically force us to reconsider the strategy and take the bridge to Citi. I'm going to say there's just not one single element.
There's a combination of multiple LMs that sort of affect us at the time in which we need to take action on specific projects.
Next question coming from Adok Veloukar from Bank of America Securities. This one is for Valle Morales.
Yes. I mean the question is about your Implied ASPs for H1 'twenty one versus H1 'twenty dollar reflect the same trend seen in the steel prices, Which have increased higher. Could you help us understand the same? Well, obviously, I mean, not this is not linear. So because in a target price, it's not just the steel prices, there are some components that they are not related to the steel price.
So another thing is that not in all situation we are Delivering the same kind of truckers and they don't use the same amount of steel because it depends on the wind On the WIDA standard or the WIDA speed in the certain in the project in the given project. So it's difficult to compare With ASPs, it depends on especially we have a big project that is impacted by, Let's say higher amount of steel, but it's not linear.
Okay. Next question coming from Kevin Duell from Ms. Kama? This one is for Raul as well.
Given the significant cost inflation in the industry, do you see any risk Our projects getting pushed from next year into 'twenty three as developers wait for prices to normalize. In summary, can developers make The returns were to want to develop brand new products given the current price situation of truckers from oil freight. Well, I mean, this is something that obviously We cannot advance as no one knows what's going to happen in 2023. We have seen that in the past We believe that most in the most of the projects they don't have more chances to delay their projects. So It could be a risk, but I believe there is limited that impact.
And What we could see is that some developers renegotiating some PPAs that makes more sense than to start brand new projects from scratch.
Okay, great. Thank you, Raul. We have no more questions right now on the platform. For any further questions, you can always contact the Investor Relations department at any Thank you all for your interest in Salt Lake Power Holdings, and have a very nice day.