Ladies and gentlemen, good afternoon from Athens. I am Alex Benos, the Chief Financial Officer of Cenergy Holdings, and I'd like to welcome you to today's live webcast on our company's 2025 nine-month period financial update. Let's see together the main points of the results up to the end of September. Clearly, the third quarter has been a very good quarter, with efficient project execution, strong margins, and continuing trends towards higher profitability. These results, combined with our strong first semester, allow us to upgrade the guidance that we give to the community for Full Year 2025 adjusted EBITDA to the range of EUR 335 million-EUR 350 million.
In the nine months, revenue has surpassed EUR 1.5 billion. It is actually equal to EUR 1.55 billion, as the new capacity in Corinth Submarine Cables Factory is now fully operational, and the enhancements that are underway in Thebes's Land Cables Factory also produce very satisfactory yields. The cable sales for that period are well above EUR 1 billion, with steel pipes following suit. Secondly, the operational profitability for the nine months reached EUR 261 million, 35% higher than the corresponding nine-month period of 2024. This was due to a very positive project mix. The cables' profitability is up, compared always to the corresponding period of 2024, is up by around 44%. Steel pipes are up by 18%, and margins stayed close to 17% for the entire group. Our backlog is also stable, around EUR 3.3 billion.
Both segments have executed approximately EUR one billion worth of projects in the first nine months of the year, so since December 31st, and they signed an additional EUR 900 million worth of new contracts in these nine months. Prospects for 2026 are also very good. I will come back to that point later on in my presentation. All these factors give us really good confidence to update our guidance to EUR 335-350 million Adjusted EBITDA, which is an increase of around 25% from last year. Now, let's turn to some numbers for Q3. Q3, as I've said, is characterized by keeping the momentum of high margins over 17%. The overall conclusion is that it is a quarter that turned out to be very similar to Q2: revenue above EUR 520 million, Adjusted EBITDA around EUR 90 million. That, of course, leads the way for EBITDA, PBT, and PAT.
All of them are at Q2 levels, higher than the first quarter. And taking into account the seasonality that we observe, "seasonality" in quotes, that we observe in our results, even a cautious Q4 will let us quite confidently achieve the target EBITDA that we do have of median amounts around EUR 340 million for the end of the year. Now, if I look to Q3 combined with the previous semester, it leads to very strong nine-month results. We are 23% higher in top line, 35% higher in EBITDA, and from 56% to 47%, it depends on your metric, better than last year in bottom line. So the message here that I would like to share with the investment community is that Cenergy Holdings delivers, delivers returns, and it delivers returns in any form that the interested party may look at.
Whether these returns are in an accounting form, like earnings per share, we have an increase of 32% at EUR 0.70 per share earnings for nine months, or whether it is in a financial markets metric, share price has gone up since the end of 2024 by almost 56%. Or even for those of you who follow return on capital employed, we do have a return on capital employed, which is around 28% for the nine months 2025. The backlog of the company stays comfortably above EUR 3.3 billion. There were three projects won during Q3 and announced through our press releases to the public. First of all, the East Anglia II offshore wind farm project, where we are delivering interarray cables, submarine interarray cables for the wind farm in East Anglia.
Secondly, the Igoumenitsa-Corfu interconnection, which deals with high-voltage subsea and land cables for the connection in the western part of Greece. And thirdly, the Greece-North Macedonia interconnection of gas networks with helicoidally welded pipes, project won by CPW. Further increase is coming in the next months, and we are quite optimistic and positive about the backlog in 2026. I will try to give you some insight on our tendering activity right now for both our segments in order to quell some concerns that a number of you may have. First of all, cables are present in a large number of large-size tenders, both in offshore and onshore projects, that are expected to be finalized until the first three quarters of 2026. All of these projects are with reputable partners and versus very large and strong clients like Equinor, RWE, SSE, and so on.
And in a number of these projects, we are either very close to completing the tender and winning it, of course, or we are in an exclusive tendering agreement with our client. Of course, we will not disclose our backlog, the contracts in our backlog, until we do have a final answer on being a preferred supplier or until the contract is signed with the client, as we always do. CPW, Corinth Pipeworks, is also active in a large number of projects. Their focus is on offshore, in offshore projects, where the competitive advantage of the company is the strongest. And I would also like to make a point here on the offshore wind farms and renewables in general. In the last three months, maybe more than three months, there were a number of articles in the news saying that offshore wind is slowing down considerably.
Really, there is some truth in it, and this truth is due to the fact that it's not really a change of preferences from the side of governments or from the side of developers. This slowdown is due mostly to the low prices that are offered in the development of these farms by governments during the auctions that were planned mostly in Northern Europe. In 2024, the cost of producing a megawatt from offshore wind farms was around $75-$80 for the construction and the cost of producing it. Now it is above $130 per megawatt hour. This is, of course, due to raw materials climbing up in price, having certain squeezes in the supply chain, and so on.
Now, even there are projects in the U.K., not in the U.S., in the U.K., actually, which indicate a levelized cost of energy of over $200 per megawatt hour. This means that when the government sets a price which is much lower than that, there are no interested parties. In 2026, we expect some modest decrease in those costs because of the easing in the international markets that will go towards $125 per megawatt hour, which means that the schemes that the governments have for auctioning out offshore wind farms have to be adjusted, and the procedures also have to be reformed. The important time point here is the auction in the U.K., which is expected to take place in January 2026, which will set the tone for the rest of auctions in Northern Europe. This auction in the U.K. concerns five to six gigawatts.
The Danish government will follow through, and even Italy is also pulling up the pace of offshore wind with proposed farms of 1.3 GW for 2026. In brief, we believe that renewables is the only alternative for Europe, so sooner or later, they will, all governments will go back to that source of electricity since Europe does not have the fossil fuel alternatives that the U.S. has or other countries in the world. Let me close this short presentation by giving you a little bit of outlook for both segments, and I will start with cables. As I said, the new capacity is gradually in production, gradually for Thebes, the land cables, and fully, of course, operational in Corinth. The offshore wind farms in the E.U. are still strong.
The story I gave you just now is clear of what is going on in Europe, but also if we read news even yesterday's, we found out that, for example, TotalEnergies filed for permits in Germany for three gigawatts of wind. In the U.K., ocean wind is supposed to pay more than GBP 300 per megawatt for the lease in the Celtic Sea for a floating wind farm. That floating wind farm is one of the first ones that will be constructed and will be powering more than four million homes. A Spanish firm called Hine is developing, is building a new offshore wind manufacturing hub in Poland. So all of these news, which I again stress, they come only from yesterday's news. It's just one day's information, show that the offshore wind market and the renewables market is very strong in Europe. In the U.S., completely different story.
In the U.S., the story behind the electricity demand comes from artificial intelligence and data centers. That story, of course, will come to Europe sooner or later, but if we look at news that broke out, for example, yesterday concerning the U.S. data centers, we have the information that a French company, a very well-known French company in electrical engineering, has signed a couple of agreements with data center operators in the U.S., which will generate for them $2.3 billion in sales. They claim that their solution is very efficient because they can scale AI capacity without raising power demand, and that's the main point of interest here because the estimates by large investment banks, including Morgan Stanley, for example, is that global power demand from data centers will triple in the next three years, and this puts, of course, a lot of pressure on the U.S. grid.
And these are extremely good news for our U.S. plant, which is progressing as planned. We have the contractor is doing foundation work. For example, he is doing what we call rigid inclusions in order to improve soil stability. They are also working towards bidding for electrical works, etc. So the U.S. plant progresses exactly as planned. As for steel pipes, the gas and oil market stays strong, and energy security continues to drive the expansion of networks all around the globe. The news about exploration and production are coming from the U.S. baby drill, baby drill idea even to our backyard. You have all learned about the interest of exploration, which is in our area, Block 2 in the Ionian Sea, Western Crete, and so on. Plus, there are even CCS projects coming our way.
For example, there is a discussion about having a CCS project that will drive carbon dioxide to the old Prinos depleted gas field near Kavala. Then there are a lot of discussions between three countries in our neighborhood, Israel, Egypt, and Cyprus, about cooperating for gas field developments. We are already present in the Israeli gas field exploration with Leviathan, Karish, and Tamar. Egypt wants to revive the Zohr field, and Cyprus is trying to get into the production phase of Aphrodite. So all of these are very positive news for Corinth Pipeworks, which has already won the tier one label globally and is preferred by the large players of the oil and gas market. Finally, CCS in general is strong.
There has been some slight delays in European carbon capture projects due to some delays in FID, in the financial investment, the final investment decision, but they will definitely happen in 2026. We already have a couple of them signed in our backlog, so I'm here talking about the supplementary ones. One note about the E.U. safeguards in steel, which will definitely affect in a positive way our company. You all know that the quotas that were imposed by the E.U. brings down, first of all, very much the very high restrictions for commodity pipes, as we call them, so for the pipes that go from 20-26 inches. There is even a more severe restriction of a 94% decrease in the amount of imports which is allowed in the E.U. for the large diameter pipes that are really our strong points.
So that will definitely give a boost for E.U.-based producers like Corinth Pipeworks. All of these news and all of these estimates about the future make us confident to upgrade our guidance for the full year 2025 to EUR 335million-EUR 350 million. I remind you last year our EBITDA was at EUR 272 million, so this year it will be between EUR 335 and EUR 350. That's an increase of almost 25%. With this, I would like to conclude my short presentation. I turn over now to the ATHEX exchange operator for the Q&A session. Thank you.
Ladies and gentlemen, we would like to inform you that you can submit your questions in two different ways. If you would like to ask a question verbally, please use the raise hand function and we will enable your microphone. Alternatively, you may type your question into the Q&A box. You can find both options at the bottom of your screen. Thank you, and we look forward to your questions.
Until someone decides to ask a question in with physical presence, I would read a question I received from Mr. Nestor Katsios, who mentions that we have previously guided for a medium-term EBITDA profitability of EUR 380 million-EUR 400 million, excluding the U.S. plant. So the question is, should you expect profitability in that range in 2026, considering that all non-U.S. investments will be fully operative? This is absolutely correct. That was our medium-term ambition. Medium-term was originally aimed at the 2027 fiscal year. Given that our investments are fully operative, it is very possible, probable that we will be aiming at these levels. But of course, the guidance will be communicated to you when our 2025 fiscal year results will be disclosed in the beginning of March 2026.
We have some questions from the attendees. Yes, there is a question that I received from Mr. John Bonfield. Do you intend to place some shares on the market to increase the free float? Well, Cenergy will not place. Cenergy does not own shares of itself in order to place in the market. This is a decision that has to be taken by our major shareholders. I'm not in place right now to have any information on that, and I cannot really answer that question. What I can answer is that corresponding to a transaction like the one that we did last year, the share capital increase, there is no necessity right now for a similar share capital increase in the short to medium term. Then Mr. Bourazanis is asking me a question about a bit more color on the increase in net debt in Q3.
It is true that debt has increased. It is mainly a working capital effect. We are very confident that this will go back to the levels of 24 and even lower. So we're talking about a leverage ratio of around one as it was the level last year. So it is a temporary effect. Then there is a question that I read from Miles Doran. We stated that you are now qualified 525 kV and actively tendering and hope to get an award until the year end. Would you need further CapEx such as the new extrusion tower to account for this? No, we don't. So there's no need for new CapEx for a DC project. What margin would you expect? What margin basis points, sorry, would you expect this to have on your cables project segments as they are secured over time?
For 2026 and 2027, the project, if it is awarded, will not have any effect because we will mostly execute the projects that we have on our backlog, which are AC projects. That might have an effect in 2028, but I'm not really in a place. I'm not really ready to give you a margin, a delta in the margin estimate for 2028. There is also a question by Mr. Karnampatis on our dividend policy for 2025. I think this is a very good question. We have been following quite a conservative approach to dividend policy until now. The objective is to gradually increase the absolute amount of cents paid out to our shareholders in terms of dividends and to gradually, steadily, and gradually go towards a higher dividend payout ratio.
Right now, it is below 20%, so increase it towards 2025, even 30% in the medium term, three, four years from now. But I cannot give you any more information on the exact amount of dividends. It is clear, however, that we want to give back to our investors a part of that profitability in terms of dividends, together with the very good capital gains that they have made on our share price. Then Mr. Bourazanis asks about margins in medium and low voltage. The margins in medium and low voltage are not following really a trend. They are following a cycle, I would say. There are years where due to higher GDP growth, you have higher demand, so the low voltage might go close to 10%. There are years that it is less than 10%. This year is one of the latter.
So our low voltage commodity products turn around a margin which is less than 10%. We are not really defining a very strong pricing policy in that area. This is an area where there's a lot of competition. It is an area that is not our focal point for developing. It's an area of, let's say, market segments that we need to be present because we have long-standing commercial relations with a large number of clients that we would like to keep as clients, but it is not the focal point of growth for the company.
And that was clear, I think, made by the fact that we have increased capacity for the projects related factories, Corinth and Thiva, actually freeing up some space in Thiva to allow for the capacity increase in Thiva. There are, oh, I see there are also some live questions, so I would give now the floor to Mr. Peter Testa.
Hello, can you hear me fine?
Yes, yes, we can hear you.
Okay, super, thank you. First question, please. If you look at Corinth Pipeworks, you're talking about more opportunities in the Eastern Mediterranean where you've had some very good margin projects and execution during this year. And I was curious what you thought as a result of these opportunities that the, say, margin mix in Corinth Pipeworks should be able to be sustained a bit further forward than just 2025 as a result of these opportunities.
Oh, yes, you're right. Yeah, it is, you're right. We do have a lot of opportunities in the Eastern Mediterranean. I mentioned also the new cooperation that is being built between the three countries. Israel were already very present there. So yeah, we believe that these high margins, maybe not at the 18% level that we had until now, but they can be sustained around the 16%, 16% range for 2026 as well. I wouldn't like to make a similar statement for 2027 onwards because, A, our backlog does not really allow such visibility. The backlog of steel pipes turns around 12 to 14 months of turnover. So let's see until the mid-2026 to be able to give a better estimate of how things will go in 2027.
Okay, thank you. And then the second question, please. If you look at the impact of facility ramp-up, as you say, Corinth is going well. You're ramping up the other facilities. If you look at the likely impact of facility ramp-up in 2026 compared to what you've seen in 2025, are there any factors you'd like to point out, either positive or negative in that trend?
Well, no, actually the ramp-up that we had in Corinth for the submarine cables was actually quite successful. The first quarter was always, it was a little bit a question mark for us because it was just the first months when the new equipment had to be used. But Q2 made a very good comeback, and it was really, I wouldn't call it a flawless, but a very, very smooth ramp-up for the submarine equipment. Now in Thebes, we're trying to do the same. Thebes is not the, we do not have a doubling of the capacity, a doubling, I mean, of the equipment that produces the cables.
So it's only two new machines compared to the three that we already own. So it's a little like two-thirds increase. We are already using and testing the new equipment. And I believe that we will be able to achieve the same, well, not short, but normal ramp-up, and we will not have any hiccups in the operational phase, in putting into operational phase the new equipment in Thebes.
Okay, okay, thank you. And then just lastly, to understand, you gave a bit of an understanding on how you see the offshore industry working. You've also talked about a fair bit of order pipeline opportunity both on and offshore. I was wondering if you could just give a sense of the offshore part, how that matches against your comments about requiring government help for new projects, which I guess would be more 2020, 2030, 2029 work versus the orders you're talking about. And then on the onshore, there's some significant opportunities in the Greek Islands and others. If you could give any sense as to how you think these will come through.
Sure, sure. You're right, you're right, Peter. The projects, if we win them, they will be really produced and yielding profits in 29, 2030. You're right. You're absolutely right. But the thing is that what I was trying to comment on was the supposedly slowing down of the offshore wind and some auctions in the U.K. that were canceled and so on. This we see that turning around, that's what I'm trying to pass as information.
We see that as turning around. It's turning around because the governments also understand that the cost of building an offshore wind farm has gone up, and they are ready to include some of this effect in the prices they will guarantee to the developers. And we also see southern European countries, Italy as an example, to be interested in picking up the pace for offshore wind farms, whereas Italy was not that hot in the area. Of course, since Italy has its own national champion, Prysmian there, we're not really expecting to be the preferred supplier for an offshore wind farm. So that's not related to how much of our backlog will go up. It's just a signal and an information that shows the offshore wind market is not as dead as certain websites and certain news pages have hinted that it is.
It is dead in the U.S., but it is not dead in Europe, and the reform of auctions is also an important point here. What is the procedure of the auction, how the prices may be adapted in the future if there are any changes in costs and so on, so that gives us some optimism about the tendering which will go on in 2027 and 2028 because it's clear that certain of our large clients, especially in the U.K., are waiting for that auction in January to find out, to actually test the water of how the government will react to see if they will develop and therefore they will come back to us to put some orders for cables. That's more or less the story.
Okay. Then just maybe just to frame it into sort of one question, your comments about expecting significant orders to be converted through the first nine months of next year, you're essentially suggesting that your order backlog will start to take another step up.
Absolutely. Absolutely.
Yeah, as a result.
Correct. Yeah. Okay.
Thank you very much.
Absolutely. Okay.
That's very helpful. Thank you. Thank you.
There is another question by Mr. Kaparis. So Mr. Kaparis, you have the floor.
Hi everyone. Congrats on yet another strong set of results. Can we get an indication of trends in growth and margins in 2028 for the two subdivisions, pipes and cables? You did say that pipes, at least the backlog in the pipes division, you still see quite strong margins. But I was wondering whether the revenue, what are the revenue trends for the two divisions? That's number one.
And number two, it's clear that 2026, you expect an inflection point in the backlog. In H1, you commented that potentially 2025, you would be exiting with higher backlog. Is that still the case, or these projects you mentioned, some of them have slipped later on because of the bidding process? Can you give us some on the backlog? Thank you.
Yeah. For Corinth Pipeworks, it is true that we cannot expect the profitability to stay at the range it was in 2025 with margins 18% and so on. However, the backlog gives us a very good visibility on the revenue. So we do have a backlog which is around EUR 500 million. And by the end of the year, we expect it to be somewhat higher. So there are awards that are coming, and they will be signed, I hope, until the end of the year.
There will be a delta there in the backlog of synergy as a whole, but of course from CPW. The revenue is expected therefore to stay at the levels where we are in 2025, 2024, and 2025, so around EUR 550-600 million to EUR 580 million in 2026 as well. But the product mix, well, the project mix in the case of CPW is not expected to be that good. It will be a good product mix. It will give some good profitability, but not at the 18% range of margins. So most probably around 15%-16%. Afterwards, in 2027 and 2028, we are really cautious. I don't want to give any forecast for many reasons.
One of the reasons being the uncertainty in the global approach to energy needs because the Corinth Pipeworks, the pipes, the steel pipe segment is more open to such changes in global trends than cables. Cables is related more or less to a necessity. We need more electricity. There is more electricity demand in the world. Whether this will come from renewables or not is a concern, but not the major concern. We will definitely need cables, and we will definitely need a lot of cables for the grids and for the electrification of the economy. Whereas whether natural gas networks will be expanded is a question that is, let's be honest, related also to the security to the Russian-Ukraine war. You've heard about the 28-point plan of the U.S. to end the war in Ukraine.
So things may happen, and this might shift interest from LNG to natural gas through pipelines and vice versa. Or so that might be positive, might be negative. So I don't want to take right now a stance on how things will be in 2027. What is clear is that 2026 will turn for Corinth Pipeworks, I mean, at the levels of revenue, top line back 2025. And in terms of profitability, it will also be a very good year in profitability. Maybe not as good as the one we see this year, but clearly much higher than what we've seen in 2019 before the crisis and even in 2023 or 2024.
Okay, thank you. And on the cable side, if you can give us qualitatively again some trends for H1?
Cables will stay at where it was at H1. It will not change. We try to increase our overall mix towards projects, but that will not happen for H2. It will be clearer from 2027 onwards. Okay. Because in a sense, even though capacity is expanding in Thebes, the projects that we have already in our backlog are locked in terms of profitability, right?
They are signed. So the amount of profitability is more or less determined. It cannot vary by much. And our total mix of revenue right now, as I told you, is around two to one. So we have two offshore, one onshore. That will remain in 2026 as well. Maybe onshore will pick up a little bit. But the project products mix will remain not 50-50 for projects, a little bit more for projects, but it will not change significantly to affect the average margin. You see my point because the margin is a weighted average margin. So it needs one side of the business to change a lot in order to see a change in the weighted average. That's what I was trying to say.
That's very clear. Thank you.
Thanks a lot. Sure. There are some questions now from the Q&A. I'm reading a question from Mr. Theodore Varelas. What was net debt in 3Q and how you expect it to the end of the year? We are not disclosing exact numbers. What we can disclose is that Q3 was higher than the debt level in H2. Working capital is the main issue here. I mentioned that at the beginning of my talk. We expect the net debt to go back to the normal levels of one times leverage ratio, one times EBITDA by the end of the year.
It also, Theodore, as you know, there is a lot of uncertainty, a lot of variation in a sense to the net debt number because of the payments, the milestone payments received for specific projects. So whether you will receive this payment in December or in January may change a lot the working capital and also the net debt. So for the time being, we are not really counting on an important amount of cash being received until the end of the year.
So we expect the net debt to go towards normal levels. I remind you, last year we had negative working capital, and negative working capital was due to the timing of the payments and not, of course, to anything sustainable and deeply rooted in our business. As for the second part of his question of Mr. Varelas, his question is that there are reports indicating EUR 10 billion of cable tenders going forward till 2030. I definitely think that this is a very, even a very conservative number. We would go maybe to more than that. I would say that that EUR 10 billion cable tenders might be present until the end of 2027, not even end of 2030. So there's much more tendering that we expect to come by 2030.
I will then go to a question by Mr. Jérôme Chassin. His questions concern the tubes business. Does the actual backlog allow you to continue to do some growth? Yes, for 2026. I mean, small, single digit, small, single digit growth. Are the H1 margin on tubes sustainable? No, I think I've answered that before. There is also a question by Miles Doren on the U.S. Baltimore plant.
Confirmed in the Hochtief report that they are contracted to work on the Baltimore site as New York 1. I'm not really following exactly your question. Our contractor is not Hochtief. Our contractor is Turner. They are working on that plant and on the site, and it is progressing, as I told you before, according to the plan. US will be operative in mid-2027. Will be operative. Doesn't mean that by the end of 2027, it will have full capacity utilization or full financial impact on the group's numbers. That should be expected by 2029. You need at least a year, a year and a half for a greenfield, in a sense, to work out the sicknesses of infancy, right? So we should expect full capacity utilization and full financial impact by fiscal year 29. There's another question by Miles Doren.
What rough percentage split of CapEx has been spent on Thebes and Eleonas site? It's a good and interesting question. There is, if I take total CapEx since 2022, I would say that maybe more than 55% of CapEx was spent on the Corinth site, on the Fulgor Submarine Cables Factory. Thebes started its CapEx, its major CapEx project later on, started it by the beginning of 2024. It's not even a 75-25 split with Eleonas. It is more like an 80-20 since the equipment and the work operating in Thebes was a more expensive project. Of course, I do not include in those calculations or in those estimates the original amount spent for the purchase of the Eleonas plant, which was around EUR 8 million, if I remember correctly.
The recent CapEx right now is around, yeah, right now it is around three to one or two and a half to two in favor of Thiva. Eleonas will be a more low-voltage cables factory, compound factory that will serve the Greek market. We try to do it as automated as possible, as modern as possible, and to really build a center of excellence there. Thiva is, however, the more heavy factory axed towards the demand of land cables in the years to come. Let's see if there are any other questions. From live, I don't see any more raised little hands. So I think we can end the conference call for today. I would like to thank you again for attending that conference call. The Q3 has been a very good quarter.
We expect also the year 2025 to go on to a very positive outcome and 2026 also to follow in the same steps as 2025. Our motto, as also expressed by our CEO, is to try and give high-quality products, create value for our customers, and keep up the good references and the good results that we have.