Good morning, ladies and gentlemen, and thank you for joining our Q3 2022 results presentation. We will review the presentation, and after we conclude it, we will have some time for Q&A. With this, let me hand over to our CFO, José Núñez. Please, José, go ahead.
Thanks, Meritxell. Good morning, and a warm thank you to all of you for joining us this morning. We'll now give you an update on the financial situation of the company, as well as more details on our activities. Let's start by looking at the key highlights of the period on slide four. We had a very good third quarter of the year as a result of three factors. One, the strong demand registered in the global situation, with special focus on renewables, promotes the deployment of renewable energy, and the value proposition of the tracker has been reinforced within this context. Second, the reduction in the cost of logistics and raw materials experienced worldwide. Third, the measures we have taken to face cost inflation and adjust our processes to the different disruptions.
During the third quarter, consolidated revenues reached EUR 158.8 million, driven by good activity levels in all the regions, an increase in tracker ASP, and the good evolution of our construction services. Adjusted EBITDA stood at EUR 13.6 million. Net profit for the third quarter reached a positive EUR 14.5 million. Looking at the nine months results, consolidated revenues reached EUR 403.4 million. EBITDA was positive EUR 8.5 million, and net profit was also positive EUR 4.5 million. Our operational indicators also remain strong, with a backlog of EUR 308 million in our industrial division and a pipeline over EUR 3.6 billion at the end of September 30.
On the other hand, our project development division reached a pipeline of projects of more than 13.7 GW in eight different countries, well-diversified. On slide five, you can see that we are on the right path to achieve our targets for the year. Revenues in the industrial division in the first nine months of the year reached EUR 423.4 million, becoming the highest ever annual sales figure achieved by Soltec in just nine months. EBITDA margin remained strong in the third quarter, reaching 3% in the quarter and 1.5% in the first nine months of the year. We are on track to reach the 2%-3% target at the end of the period. Regarding our project development division, in Q3 2022, we rotated 340 MW in Italy to ACEA.
We have reached an EBITDA of EUR 5.2 million at the end of the first nine months of the year. Finally, consolidated Adjusted EBITDA was EUR 8.5 million. Based on all these figures, our guidance for the year remains the same. Let's have a look now at our operational indicators on slide seven. In the industrial division, the track record continues to grow, reaching 14.4 GW of tracker supplied, out of which 2.6 GW were supplied in the first nine months of the year. As we highlighted on the Capital Markets Day, we expect to finish 2022 with a track record of 15GW-16 GW. Regarding the project development division, the pipeline has continued to grow, has reached 13.7 GW at the end of Q3 2022, already achieving our target for the year, 13 GW-15 GW.
Regarding our operational indicators in Soltec Industrial, we continued to have strong figures in our backlog and pipeline. We're now on slide eight. As you know, in our industrial business, we define backlog as project signed, not yet fully executed, projects in which we still have some revenue recognition pending. While pipeline are potential future contracts in which we do believe we have a certain chance of success. We had high delivery volumes during the period as projects in our backlog are being translated into revenues. At the same time, we continue with a strong sales activity, reaching a backlog of EUR 308 million at the end of September. Geographically, the largest market in our backlog was LATAM, accounting for 51% of the total, followed by North America, which accounted for 26%, and Europe for 23%.
If we look now at our pipeline, it reached almost EUR 3.7 billion at the end of Q3 2022. In terms of geographical diversification, Europe leads the way with 46% of the total, mostly Spain and Italy, while LATAM represents 25% and North America, basically the U.S., 15%. Let's move now to slide 10 to have a closer look at our project development pipeline. Our pipeline has continued to grow, reaching 13.7 GW at the end of September. We are present in eight countries, as you can see, with a diversified exposure between Europe, 46%, and the Americas, 54%. On slide 11, we can see how not only we have a larger pipeline in our project development business, but also this pipeline is of higher quality.
As you can see, we have projects across the entire development funnel, but focusing specifically on the backlog section of the pipeline, we have already 117 MW under operation in Spain and Brazil. We also have 313 MW under construction in Brazil and 5 MW in Spain. The rest of the backlog, 488 MW, includes Ready-to-Build projects in Brazil. On the next slide 12, we can see a quick summary of the most relevant projects already in operation or under construction. The four projects on these slides have been or are being developed, installed, and constructed by Soltec. Let's start with La Asomada. This project is located in Murcia, Spain, and is our first project in operation. Powertis developed this project from scratch, and Soltec Industrial has supplied the SF7 trackers and provided the construction services.
This project is part of our joint venture with TotalEnergies. La Isla project is the second project with Total, and we have recently started construction. It is also part, as I mentioned, with our partner Total, of the joint venture we have with them, and we estimate COD for 2023. In Brazil, we have completed construction of the Araxá and Pedranópolis projects. Soltec has provided construction services and supplied the trackers, in this case, the 1P tracker SFOne. We have already connected Pedranópolis to the grid, and we expect Araxá to be connected soon. PPAs are 100% secure on both projects. We are proud of the execution of these assets in a very challenging environment in Brazil. Let's move now to the next section of the presentation on slide 14, the Q3 2022 financial results.
As I commented earlier, consolidated revenues reached EUR 403.4 million for the period at 16% increase versus Q3 2021, which was mostly driven by an increase in our activity levels during 2022 compared to the previous year. Consolidated revenues per quarter have improved quarter-on-quarter and year-on-year, totaling almost EUR 159 million in Q3 2022, at a 59% increase year-on-year compared to the Q3 2021 figure. Adjusted EBITDA for the first nine months of the year was EUR 8.5 million, EUR 31 million increase compared to 2021, while the Q3 figure also improved significantly, reaching EUR 13.6 million, EUR 70 million higher than in Q3 2021.
Finally, consolidated net profit was EUR 4.5 million positive for the first nine months of 2022, compared to a negative EUR 20 million in the same period of last year, while Q3 2022 figure reached EUR 14.5 million, a EUR 14.6 million increase compared to Q3 2021. In Q2, we started to see a significant improvement in our results. That trend, as you can see, has continued in Q3. Hence, we expect to achieve our full year guidance. This improvement is driven mostly by the measures taken to mitigate the disruptions faced by our industrial division and also the contribution made by our project development business.
Looking at our industrial division on slide 15, revenues have continued to grow and have reached a record figure of EUR 423.4 million at the end of Q3 2022, an increase of 124% versus Q3 2021. Revenues in the period Q3 2022 have also increased significantly quarter-on-quarter and year-on-year, reaching EUR 157.8 million. Profitability also improved in the year, thanks to the measures we have taken to mitigate the worldwide disruptions. Adjusted EBITDA was EUR 6.6 million for the first nine months of 2022, with an EBITDA margin of 1.5%. Looking only at the third quarter figures, we have reached an EBITDA of EUR 4.6 million with an EBITDA margin of 2.9%.
As expected, the projects we signed with the new measures implemented have allowed us to improve our profitability in 2022, and we are already seeing a normalization of our margins. On the next slide 16, we can see the quarterly evolution of our sales and EBITDA margins in the industrial division since the beginning of 2018. First of all, looking at the revenues, we can see a clear recovery of the activity since the middle of last year, driven by a strong demand. Now, if we look at the EBITDA margins, we can see an inflection point in Q2 2022 when margins started to recover, and this trend has consolidated in Q3 with a 2.9% margin, in line with our full year guidance, 2%-3%.
This clearly shows we're in the right direction, that the measures taken to mitigate the disruptions are already delivering, and that margins have started to normalize as the contracts signed with the new conditions introduced last year are getting executed. We are completely focused on the recovery of the margins for industrial division, and therefore, we continue to take measures throughout our entire value chain to achieve that goal. Let's have a look now at our project development division on slide 18. EBITDA has reached EUR 5.2 million in the first nine months of the year and EUR 8.2 million in the third quarter, driven by the rotation of 340 MW following the agreement signed with ACEA for the co-development of solar PV projects in Italy.
ACEA acquired 51% of the equity of these projects, while the remaining 49% is owned by Soltec. The transferred project portfolio will continue to be developed by Powertis, and Soltec Industrial has certain rights to supply the trackers and construction services once the projects reach Ready-to-Build status. On the next slide 19, we can see our debt profile as of September 2022. Debt is split between the corporate debt linked to the industrial business and the debt linked to the projects developed by the company, mainly in Brazil. Soltec Industrial debt, EUR 89 million, is mainly related with the revolving credit facility signed last year, which matures on February 2024. For project development division, debt is mostly related to the projects under construction in Brazil, which account for EUR 53.4 million at the end of September.
The financing of the Araxá and Pedranópolis projects is secured by BNDES for a total of BRL 323 million, which is around EUR 60 million. Additionally, our project development business also has other liabilities totaling EUR 16 million. Gross financial debt stands at EUR 180.4 million at the end of Q3 2022, while cash and cash equivalents total EUR 25 million. As a result, our net financial debt reached EUR 155.4 million as of September 2022. Before we move to the Q&A section, please let me quickly summarize a few closing remarks. It has been a very good quarter for both industrial and the project development divisions. We have seen a turning point in industrial division with strong demand and lower disruptions in the supply chains, helping the recovery of positive margins.
It's also worth mentioning the strong pipeline and evolution for project development business, with already 117 MW under operation. Finally, to wrap things up, we're very happy with the evolution of our businesses in 2022, and I would like to stress that we confirm our guidance for the year. Thank you very much.
Q&A session. We've got the first question coming from Ignacio Domenech from JB Capital. First one for Soltec Industrial: Can you comment on the EBITDA margin evolution in the third quarter compared with the margin seen in second quarter?
Okay. Good morning. Thanks, Ignacio, for the question. Well, essentially, as we mentioned in our last meeting back in September, the margins that we're showing on a quarterly basis are obviously the weighted average of different projects, different activities, different components, so they vary from quarter to quarter. In this particular case, as we explained already, the average margin for the industrial division was 1.5% overall for the first nine months of the year. As we have already explained, our target for the year is to basically reach an EBITDA margin between 2%-3%.
Okay. Another question. Looking at 2023, should we expect inflationary pressures, namely on personnel costs?
We haven't seen them yet. Anyway, if that's the case, as long as we're able to pass those basic increases through to our customers, that should be okay. We've been doing that in the past with some other essentially components or for tracker such as steel, for instance, and this shouldn't be any difference.
Next question for Soltec Industrial also. What is the EBITDA margin guidance for 2023?
We will provide more details about the guidance for 2023, probably, with the full year 2022 results. I can tell you that as obviously margins normalize, we should expect to see margins closer to the 6%-7% range that we've always talked about.
Talking about Powertis, next set of questions. Should we expect Powertis to sell any projects in Q4? What would be the target for projects sold at RTB/COD in Italy?
Okay. The expectation for the asset rotation in 2022 was to basically sell between 600 MW and 700 MW at the end of the year to third parties. We are on track, you know, to meet that particular target. As you know, we have already transferred 340 MW, and there are several processes in different locations worldwide open as we speak. We expect to reach that figure, that goal before year-end.
Regarding the Araxá in Brazil, should we expect this project to be transferred to SAM, or do you expect to rotate this asset?
Both the Araxá project and the Pedranópolis projects are gonna be transferred to Soltec Asset Management. Okay? They'll be part of our portfolio projects.
We've got another set of questions coming from Virginia Sanz de Madrid, Santander. First one, for Powertis, do you expect the company to achieve the EBITDA target by adding a further asset rotation?
Yes. In fact, this is a question to some degree similar to the one we just answered. Yes, all right, we have several M&A processes open right now as we speak, and we expect to see more rotation before the year-end.
Next question for Soltec Industrial. Do you expect to benefit from IRA in the U.S. by new orders, or is that market captured by Nextracker and Array Technologies?
No. I mean, obviously we are. Our expectations obviously are significant in relation to the new legislation passed in the United States. We believe it's gonna increase the volume of activity even further than we're currently seeing in the United States, and therefore, we believe it's a good thing for all of us. Okay? There'll be room for everyone.
We've got another question. Are you worried about a possible deceleration in renewables installations given cost inflation and higher rates?
Okay. Higher rates, I believe it's something that we're currently seeing, and everyone actually understands how they could impact the development of renewables. Having said that, at the same time, we have very high power prices worldwide, which are offsetting that particular impact. If we talk about cost inflation, things are starting to change. That's what we're seeing in the market, not just on the project development business, but also on the industrial business. And essentially what we're seeing is that raw materials, components, logistics, they're starting to come back to their historical average. They're still perhaps above their pre-COVID levels, but things are getting normalized over time.
Okay. There is another question for Soltec Industrial. Do you expect for Soltec Industrial to deliver normalized mid-single-digit EBITDA margins in 2023?
As I said before, we will provide more information in relation to the 2023 guidance in the near future. I would say, as I said before, that if nothing extraordinary happens, we should be closer, as obviously all the situation is normalizing out there, to the 6%-7% EBITDA margins that we've talked about in the past.
The last question, where did you expect net debt to close at 2023 year-end?
Okay. As we explained in our last meeting, our expectation is to have net debt above EUR 200 million at the end of the year. Obviously, a significant portion of that net debt figure will be related to project financing, and therefore it will be project-related. Yeah, our expectation is to have net financial debt a little bit above EUR 200 million.
Thank you, José. We've got another question from Edward Bottomley from Berenberg. How many gigawatts of tracker sales should we expect in Q4?
Okay. Hi, Ed. Essentially, what we're thinking about in terms of tracker sales is to have another gigawatt, more or less, okay? We will move from 2.6 to a figure between 3.5 GW and 4 GW at the end of the year.
How significant was the ASP tailwind for you in Q3?
Well, I mean, I wouldn't just talk about the ASP tailwinds. There are other probably situations out there in the market in the current environment that are also helping. We've talked about the measures we implemented. We've talked about the fact that essentially cost inflation in terms of logistics and raw materials is getting better. That combined with the increase in ASPs is obviously helping us to boost profitability, not just in Q3, but also in Q2. Obviously this trend is expected to continue in the coming periods.
The last question from Edward: How are you seeing prices for projects you're looking to divest?
Well, the situation hasn't changed much in the last months. I mean, pretty much the same situation we had when we had our last call back at the middle of September. Prices in Spain and Italy remain almost the same, and demand and interest on those particular assets is still high. In terms of appetite in Brazil, situation is similar. I mean, there is a lot of appetite there. Prices, as you know, are a little bit lower there. Nothing significant has changed since our last conversation.
Okay. Thank you, José. We have no more questions on the platform. With this, we conclude the presentation of the results Q3 2022. Thank you very much.