Ladies and gentlemen, welcome to the analyst conference call of PNE AG. At our customer's request, this conference will be recorded. As a reminder, all participants will be in a listen-only mode. After the presentation, there will be an opportunity to ask questions. If any participant has difficulties hearing the conference, please press star key followed by the zero on your telephone for an operator assistance. May I now hand you over to Markus Lesser, CEO, who will lead you through this conference. Please go ahead.
Yeah. Good morning, everyone. Also from my side, thank you for joining us today in this conference call on the results of the first quarter of 2022. As usual, before I start with the presentation, I would like to share with you an outline of the presentation and the procedures of today's call. As usual, I will start with an overview of the operational strategic highlights of the first quarter 2022. After that, I will comment on our financial figures. I will conclude my presentation with our outlook for the remainder of the year. As always, we will then open the line for the sell-side analysts only. All other participants will stay in listen-only mode, as it is our company procedures for years. As usual, our slides that I will use can be found on our investor relations website.
Having said this, I would like to draw your attention to slide three. In operational terms, we made a very dynamic start to the fiscal year 2022. In Q1, we have sold 9 MW wind farm. In addition, we have projects with a capacity of 267 MW under construction at the end of Q1. The operating performance in Q1 was clearly marked by our power generation segment. Driven by the higher installed base, the improved wind yields and the high power prices, the total output in power generation increased significantly. This also shows that our strategy to build our own IPP portfolio is already paying off. We also made further progress regarding the expansion of our own generation portfolio. We were able to start construction of another wind farm with around 28 MW.
At the end of Q1, we had 233 MW in operation and around 132 MW under construction. For our own portfolio, that means around about 365 MW we have already covered, and we come closer and closer to our target of 500 MW and under construction or in operation end of next year. In April, another wind farm was put into operation and the portfolio was increased to 252 MW in operation. Our project pipelines were increased in Q1 again by 939 MW peak. You know, megawatt peak is for PV projects reserved compared to Q1 2021 year-over-year and by 285 MW peak compared to the end of 2021, so quarter-over-quarter.
Now, our pipeline of wind onshore PV projects stand of more than 7.2 GW, gigawatt peak. Also, the volume of orders we manage in operation management was significantly increased to over 2,200 MW. Looking at the financials, I want to highlight that we could achieve the best Q1 EBITDA in company history. You know, we are the project developer. We usually had been not that happy to look only to the Q1 and Q2 and the quarterly results. We see that just right now, more and more the influence of our, say, IPP portfolio is coming up, and we see that these results are now showing more constant.
The EBITDA increased by 151% year-over-year to EUR 15.8 million. As said, the results were mainly driven by the strong performance of the power generation, which was impacted by the higher installed base, the improved wind yields and the high power prices. Total output decreased compared to the high number of the previous year, which, however, was expected and is fully on target. In the light of the strong performance, also our cash position and equity improved further. If you look to the next slide, you see, as I mentioned already, close to 365 MW in operation under construction or through tender for our own portfolio. This is, it shows that we are coming closer to our target. Another wind farm was put in operation, 90.4 MW in April.
What I can say just right now, a couple of weeks ago, we got another permission for another 19.8 MW Project, and we can whereby 6.6 is a service project for others, which was part of the deal. 170 GWh of green energy was produced in Q1, which means that 100 tons of CO2 saved with our own portfolio. The hidden reserves accumulated a portfolio of above EUR 130 million in total. We look to the project pipeline. Again, we could increase the project pipeline. If you see the wind onshore pipeline, we talk about now 577.8 MW as opposed to 5,588 MW in the first quarter of 2021.
Remarkable is that we have a record level of projects in the permitting phase, not only in Germany and France with 812 MW, also overall over the pipeline of 1,140 MW. This shows that we have a huge and steadily increasing amount of projects which can be finalized in a medium-term run. In France, which, as I said already, we sold the project 9 MW as a project right, and Nanteuil is still under construction. In Poland, Project Świeszyno and Koszalin are under construction, which were sold last year, and Utmåla is still under construction in Sweden. Looking to the PV pipeline, we see a strong growth.
If we see quarter one of 2021, we had 674 MW peak, and now we talk about 1,423 MW peak, which is a remarkable increase of 749 MW peak on a year-on-year basis. We can also see that we have a lot of synergies with the wind development, and this helps us to increase furthermore the pipeline. As you could see in the last year, at the end of last year, we could sell some of these projects, and you see that we have a value in this pipeline as well. We look to the financial figures.
Again, remarkable, 151% on a year-on-year basis, driven by power generation, the increase to EUR 15.8 million, which led to a net income of EUR 10 million. However, we have to say that the financial results are positively impacted by the valuation of interest rates, perhaps EUR 6.6 million. This is part of the truth as well. The operating performance and earnings mainly driven by results from power generation, project sale in France and the usual business in services and the internal services related to build-up of own generation portfolio, which is our usual business. We see the segments.
We see that the project development output decreases in a year-on-year comparison to EUR 15.9 million, which is absolutely in plan, as well as the EBITDA decreases to -EUR 2.4 million. We will see when the next projects will be shifted into the pipeline, in our IPP pipeline, and we have the first sales, which we expect more in the next quarter and then we will see a much higher amount. We expect, especially at the end of the year, a lot of permissions in Germany and we think that this will change this view significantly. Service output grows to EUR 5.2 million, which is 6.7% above the number of last year. The EBITDA decreased, but this is normal.
We had to invest in our foreign business. Now we are in Lithuania, where we got additional business. We are now at 2,200 MW, so a strong increase in this portfolio. We make services for our customers and this is a good success. Power generation output increases to EUR 21.9 million. All these numbers is before consolidation, and the EBITDA increases to EUR 18.8 million. If we look to the balance sheet, the balance sheet increased again from EUR 827 million to EUR 856 million.
Remarkable is that we have a high cash position of EUR 168.1 million. So we can say with the financial instruments we have just right now in place, we are satisfied at the moment, and we are positive to invest in our portfolio and have every financial capabilities together. The equity ratio is at 27.1%, still high. You see again, we have liabilities to banks, the liabilities from leasing contracts. If you see the liabilities to banks of EUR 347.1 million in a non-current debt and the current liabilities of EUR 21 million, we see always that this is non-recourse.
On the other side, we have liabilities from leasing contracts, which is of course IFRS necessary, so of EUR 108.7 million, which is increasing furthermore with each project we take in our portfolio. Yeah. Having said this, we have a positive outlook for fiscal year 2020, well, toward 2022. Let me say some general remarks. We see increasing prices, heavily increasing prices in wind turbines and EPC. We see on the other side, high power prices, which helps to cover these price increases. We see the strong willingness of the politics to support green energy. The Ukrainian war also shows that there is an uncertainty in the market also for the future. We try to secure the high power prices also for longer years.
We are limited usually for one or two years. We don't get longer contracts, but we try to fix them because for a part of the wind portfolio. There's a mixed picture. Anyway, with our business model, we have a high resistance against these different ways of measurement and measures, and influences. Therefore, we are positive. We have a guidance of EBITDA of EUR 20 million-EUR 30 million. We stick with that. Now you could say why not increasing if you're having now EUR 15.8 million EBITDA. I can only tell you that we have to invest in our portfolio, which will have an influence on the EBITDA in the future.
We have this, which is related to some sales which we do not have in our pockets just right now. Panama, United States, U.K., South Africa, the result out of tenders. On the other side, we don't know what the wind is, how much the wind is blowing in these regions. Therefore we stay careful and wait-and-see, and we will see what we get at the end of the year. We stick with this guidance of EUR 20 million-EUR 30 million. We're building out a portfolio. As I said before, we expect in autumn, winter, more projects which will come through permitting process.
We have increased portfolio, we have an increased permitting volume in permitting phases of projects, and we increase in all segments of our business. Therefore, we are positive for this year. That's how I want to conclude my presentation. Thank you for your attention, ladies and gentlemen. We are now open for questions.
Dear ladies and gentlemen, we will now begin our question and answer session. If you have a question for our speakers, please dial zero and one on the telephone keypad now to enter the queue. Once your name has been announced, you can ask a question. If you find your question is answered before it's your turn to speak, you can dial zero and two to cancel your question. If you're using speaker equipment today, please lift the handset before making your selection. One moment please for the first question. We have a first question. It's from Karsten von Blumenthal, First Berlin. The line is now open for you.
Good morning, Markus. This is Karsten von Blumenthal. Congratulations to the good Q1 results. When I look into the sector, I see that all the large turbine producers have issued profit warnings, as material prices go up. My question is, do you fear that this wave will, with a certain delay, also hit the project developers?
Yeah. Good morning, Karsten. Yeah, from my point of view, it is very clear. Mainly it is driven by transport costs. Secondly, it is driven by increasing steel cost and other costs which is related to raw materials. I would say that the biggest cost driver is transportation. This is something which can change, yeah, in the future. In the moment, all projects we are having under construction are completely settled, and we have no deviation from our plans. For future projects, we expect higher costs. This is in the range of 10%-20%.
What we see there in the moment, what is announced, we see on the other side that the politics want to increase renewable. In the short run, we have to see what is happening. Nevertheless, on the other side, well, one point is, for example, in the EEG, they don't decrease the maximum prices for the tender, which would be on a regular basis what they would do usually. They want to make it successful so that we have no tariff change to expect. On the other side, also we have this higher power prices. The power prices, we will see how long the duration will be.
We make a mixture of getting it partly covered through long-lasting contracts, which are long-lasting means one to two years. On the swap market, we try to get the best out of it for the other half of the project. What we can see that we get an additional EBIT on board through this effect. It's a mixture. How we can handle this in the future, we will see when we look to the predictions of the power prices. In the moment, we don't see the effects too much in for us as project developer and IPP as a producer.
All right. Thanks for that. You mentioned the stronger support from regulation and politics. All in all, are you happy with the Easter Package of Mr. Habeck so far, or do you see things where you are not satisfied?
I think in general this was the first part. The second part will be in the summer. In the summer, where we have a next change of EEG to expect. In any case, they want to support more green energy, more wind, energy. This is, first of all, very good. You can see it in the decision that now by law, the renewable energy becomes an industry which is in the highest interest of the government, which gives us a special role and division on costs, for example. Yeah, so it's it give us a higher level than other things. This is one remarkable sentence and one remarkable point. All other issues are, first of all, minor issues which are helping in some cases. Now we will see what will come up in the summer package.
All right. Thanks for that. You have not talked about your offshore business because currently this is not so important, but the German government plans a massive increase in offshore expansion. Do you plan to participate in this in the medium term, and if so, how?
In the moment, we look for opportunities, but there is no direct plan to invest there due to the fact that we have a public tender to expect with high prices for stepping into the operation of wind farms. This is not really our business. We are more a project developer. On the other hand, if we want to step in, then we want to step in where we see that we have opportunities in this market in a good way. Just right now, Germany is not our focus in that respect. We will see what will come up, how the conditions are, and of the tenders and how what we can do. Just right now we are more reluctant and we are not pushing. This is not in our plan just right now.
You have probably also seen that wpd has sold its offshore business to Global Infrastructure Partners. Is this something of an option for PNE too?
No, not yet. We still see the opportunities in the offshore market worldwide, and we see that we have an experienced team. If you look carefully to how many teams really develop projects in the world, with the exception of China, I would say we are one of the 12 companies who have developed projects. The rest have purchased projects, already developed. Therefore we think that we can contribute from that, and we'll make our business out of that in the future as well. How we want to step in in operation or whatever, it is more or less opportunity-driven.
All right. One last question from my side. If I understood you right, in Germany you have 135 MW under construction, but only 112 MW are for the own plant portfolio. There is a difference, if I understood you right, and so you wanna sell a project you're currently constructing to the market?
Sometimes, the example, if you have a repowering project, it is common that you have a deal with the former owners that they will take a part of the new project. For example, now we have a project where we have around 19.8 MW where we got the permission now, and one machine is for the former owners and two or three for us, yeah. Two or three for us, depends on how. This is the situation. Well, that's what we have to face several times. Then one machine is sold and one, or in this case, three machines are for us.
All right. Understood. Thank you very much for taking my questions, Markus.
Thank you.
The next question is by Holger Steffen of SMC Research. The line is now open for you.
Good morning, Mr. Lesser. I have only one additional question regarding your electricity generation. As mentioned, we saw very favorable conditions in the first quarter. Maybe you can give us an idea now which EBITDA result we could expect in the segment electricity generation in the full year if the wind conditions will meet the historical average in the period from April to December?
Good morning, Mr. Steffen. In any case, we have our plan. What we think we have to deliver in terms of kilowatt hours at the end of the year. And we calculate always that we get a special percentage of the usual wind. There are predictions. What we can see that we have now the situation that, for example, January. When you see the time from October to March, then you talk about usually in that time about 70% of the wind you can get and the results you can get out of the year. If you have weak month in that time, then it's always difficult. Yeah. In this case we have a good January, which was slightly above the average. A very good February, where we are very high over the estimations and a low March .
Mm.
This all results to an amount that we are slightly above the 100% expectations in the wind yields, so and in our-
Mm.
Kilowatt hours. The secondary point is that we always get new machines on board, yeah, in the portfolio. It's not that easy to say what is related to which part of the portfolio. That's the second part. We have a situation that the energy prices are related to spot market prices sometimes. There is a wide variation just right now. I'll give you an example. We have a tariff usually where we talk about between, let's say somewhere between EUR 0.054-EUR 0.065, depending on the location, if it is a high wind speed or a low wind speed location. There we have a correlation factor in EEG. The energy spot market prices are usually around, have been around EUR 0.045 or something like that. Now we talk about between EUR 0.10 and EUR 0.19 per kWh, depending sometimes on the day, yeah.
Mm.
It's remarkable and it's not predictable. We don't know how long we will have this duration. That's why we say, okay, half of the portfolio we will take on board with longer contracts for 2022, maybe for 2023. If we can get also later, but just right now, 2023 contracts are the longest we can get. It depends on the traders on the other side where we have contracts with. This is the situation. Therefore it is not, in the moment, not manageable to give a prediction for the whole year. I can tell you only how the situation is. We expect higher incomes in the part of power production. How high? I can't say just right now because there are so much volatility. We think we will be above plan .
Okay. I see. Let me try it in another way. Maybe you could tell us which electricity production you expect from the existing portfolio for the nine months from April to December, if the conditions meet the historical average.
I think in terms of gigawatt hours, what did we have last year? We had last year, I think, above 340 GWh. 295 GWh. Exactly. 295 GWh. I think the projects we get in maybe another 10-15 at the moment, which comes over the whole year. We come in the direction of 310 GWh-320 GWh. You can add then maybe in average somewhere, I don't know. That depends on the market. It's somewhere in between. That's what we have to calculate. Just right now, something where you have to take your estimations. I can't say. I don't want-
Yeah.
to say just right now what, where we are in this respect and what we expect in this respect, because it is not predictable just right now.
Mm.
Every number I give you, it is a number which can be changed immediately. If tomorrow the Ukraine war stops, then immediately we have other estimations. Yeah.
Okay. Thank you very much.
Okay. Thank you.
As a reminder, if you want to ask a question, please press zero and one. There are no further questions for the moment, and so I hand back to you.
From my side, thank you very much for your interest, and you'll hear from us latest next quarter. Maybe you come to our AGM next week and listen to that and hope to see you soon also, maybe personally. See you. Bye. Have a good day.
Ladies and gentlemen, thank you for your attendance. This call has been concluded. You may disconnect.