Ladies and gentlemen, thank you for standing by. Welcome and thank you for joining the PNE AG Q3 Report 2022. Throughout today's recorded presentation, all participants will be in a listen-only mode. The presentation will be followed by a question and answer session. If you would like to ask a question, you may press star followed by one on your touch-tone telephone. Please press the star key followed by zero for operator assistance. I would now like to turn the conference over to Markus Lesser, CEO. Please go ahead, sir.
Yeah. Good morning, everyone, also from my side. Thank you for joining us today in this conference call on the results of the first nine months in 2022. Before I start with the presentation, I would like to share with you an outline of the presentation and the procedure of today's call. As usual, I will start with an overview of the operational and strategic highlights of the first nine months of 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's 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 have made very good progress during the first nine months of 2022. We have sold a 9 MW wind farm in France, and we have completed three wind farms in Germany and one in Poland. In addition, we had projects with a capacity of 224 MW under construction at the end of Q3. The operating performance was clearly marked by our Power Generation segment, driven by the higher installed base, the improved wind yields, and the high, higher power prices. The total output in power generation increased significantly. This also shows that our strategy to build up our own IPP portfolio is already paying off.
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Hello, this is Markus Lesser speaking again. For some reasons I can't understand, we have a technical issue here. I'm not sure when I was really through this presentation, so I don't know. I heard that it maybe started in the beginning that we get a problem. From this point of view, I will repeat some of the outcomes. I think it must have been after the financial data. From that point of view, I'm starting again from this point. I'm sorry for this. I have to excuse this disturbance. I start with page six, expansion of the generation power portfolio co-continues. 112 MW in operation under construction and through tender.
This 112 MW. We are very close to the own generation target of 500 MW, which we want to have next year under construction or in operation. You have to remind that we expect that until year-end or roundabout year-end, 95 MW of further wind projects, which we want to get a permission. Therefore, we are coming very close to the 500 MW . 283 MW of onshore wind projects in operation end of nine months, and further 102 MW are under construction.
27 MW, three projects went through successfully through the tender in September, and they will start the construction very soon. Interesting is that the hidden reserves accumulated in portfolio of EUR 145.4 million in total. That's a new high. Yeah, we could build up our Power Generation portfolio, and at the same time, we could increase our project pipeline. Significantly. I think this is remarkable. The project pipeline grows by 77% on year-on-year basis, reached 11.4 GW peak, and which is an increase by 5 GW roundabout. In the pipeline of the PV, we could see an increased. We could fivefold the increase the pipeline to 4,000 GW peak. That's all.
On the other side, we see the wind onshore area, and we have more than 1.1 GW in the permitting phase. This is remarkable, and this shows that we stick still on a high level even when we have sales ongoing or we made sales of projects we sold projects. On the other side, we see especially in projects in the permitting phase in Germany and France with more than 800 MW a high level of projects which are coming closer to be finalized and where we can start construction or we can sell it. We had good increase in Germany, the pipeline, and we have just right now in this year 49 MW already completed three projects in this respect.
Additionally, we could complete the construction of the wind farm Krzęcin in Poland and we have still the projects in Kuślin and Hultema under construction. Yeah, the pipeline of PV increased roundabout fivefold. This shows the potential of our network, which we have already in wind, but also the deal of KOLYA, where we could bring a pipeline of 1.8 GW peak into the portfolio shows we can see now. The financials are mainly driven by the strong power generation. As I mentioned before, the EBITDA is up to 66% on a year-on-year basis, as the total output could increase by 13%.
It's mainly driven by the results of power generation and the project sale in France and also the services business. Remarkable for the positive financial results is the impact of the change of the interest rates, especially the swaps and the subsequent measurements of liabilities to credit institutions, increased the financial results significantly. Let's have a look to the segments. What we can see is when we start with electricity generation, that the power generation strongly increased, and the EBITDA increased to EUR 42.9 million out of this area, which means close to 300% increase on a year-on-year basis.
The services grew by the output by around about 20% and an EBITDA roundabout 15%, which shows the impact of the internationalization of our business. The project development output is lower, a little bit lower, -20%, and the EBITDA is at -6.3%, but we don't see the big issue due to the fact that we expect further permissions of 95 MW in our project in the next time. Additionally, we see project sales, especially in Romania and in South Africa, where we expect further payments until year end. The balance sheet shows a further increase, we're coming close to EUR 900 million.
I think the numbers are showing the big construction and the build-out of our Power Generation portfolio and the pipeline of our development project. Interesting is the liquidity. I would like to give some comments on this because it is very interesting. We are the business model where we can see the projects upcoming, and that gives us the chance to prepay and to order project parts in early advance to secure delivery times and costs and prices. This will be lower due to the prepayment of transformer stations, cable works. We will avoid the higher prices or longer delivery times. For example.
That's where we need the cash now for. That, for example, we already ordering nine transformer stations for the next nine projects, for example. Or around about 670 km cable works we are prepared to order for the next projects. That it is everything in line and that we have the costs under control. Non-current debt is increasing. The corporate bond is EUR 55 million. I talked about this already. The liability of banks is increasing. There are many project financing non-recourse. I think interesting is what's the current liabilities is also non-recourse. That is, we have a very low debt in terms of on the corporate level. Related to the outlook for the financial year 2022, we stick with our guidance.
We confirmed EBITDA of EUR 20 million-EUR 30 million. We have especially the situation that the interventions planned by the European Commission and the German governments to skim off the windfall profits not have been defined yet. We see further opportunities in the markets. It's a dynamic market who have a good idea how to purchase in the right manner and how to sell power in the right manner has now an advantage, and that's where we are prepared for, and therefore we see have a positive outlook. Portfolio is built up very fast.
We have a fast project pipeline, and we have a high volume of projects in a permitting phase, which will give us a great potential and a good visibility going forwards. We wait for the finalization of some sales processes, and we expect a high amount of projects which should be permitted in the next upcoming months. At the end, I would like to highlight that we have an upcoming event next week, Capital Market Day. We would like to give you an outlook of our strategy until 2027. You are heartily invited to, and I would be happy to meet you there personally. Thank you very much.
Ladies and gentlemen, at this time, we will begin the question and answer session. Anyone wishes to ask a question may press star followed by one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star followed by two. If you are using speaker equipment today, please lift the handset before making your selections. Anyone who has a question may press star and one at this time. One moment for the first question, please. The first question is from Karsten von Blumenthal with First Berlin Equity Research. Please go ahead.
Good morning, Mr. Lesser. This is Karsten von Blumenthal from First Berlin. You mentioned that you have currently 102 MW under construction for the own plant portfolio. How many megawatts do you try to complete this year?
Yeah. Hello. We have a situation that we have some delays of finalization of projects due to some certification which is missing in the wind turbines. We now would like to finalize in total projects until end of this year of 35 MW for our own portfolio, around about 36 MW for our own portfolio. We have other projects ongoing where we have a short delay. We have another 3.5 MW projects for third parties, which we would like to finalize as well in Germany.
Okay. This 36 MW you mentioned, that is in addition to what you have already finalized this year?
It's in addition to 283 MW we have now in our portfolio. Exactly.
Okay. You mentioned that it is currently not entirely clear how the so-called windfall profit taxation of the government will look like. Recent information according to the Eckpunktepapier says that it could be roughly feed-in tariff plus a safety margin of 30 MW. It could happen that this will eat into your power production profits. Have you got an idea when this tax could start?
If this tax started at September, which was first of September, it has an impact of around about EUR 2 million-EUR 3 million. If it is a longer time, maybe March, then we have a lower two-digit million effect. That's why we stick with our guidance and think we can do it only in a proper way when we know exactly what are the numbers and what are the requirements we have to expect.
Well, at least recent information says that we will not have a retroactive taxation, but that it will start in December, but obviously it's not yet decided. We have to wait for this. Could you elaborate on how many megawatt or megawatt -hours you have secured in your own plant portfolio via PPAs for this year, next year and beyond?
Around about 50% we have secured in next year and around about 25%-30% for the year after. This is around about the amount we have in stable contracts.
All right. Thanks for that. You mentioned that you would like to sell the projects in Romania and South Africa. Could you briefly elaborate on these projects? What kind of projects? How many megawatts we talk about?
Yeah, we talk about projects. What we have to expect in the future, we will finalize the project Kuślin in Poland, where we get the payments, and we get in South Africa the milestone payments. If we participated in the tender, we sold this project already, but we get milestone payments if we win the tender. Our customer in September, this is an amount of low single-digit million EUR. Yeah. Secondly, we have the Romanian PV. We talk about a sale of 160 MW peak project.
Maybe additionally, we talk about selling three further projects, but this is something where we are in deep negotiations and we wait. We hope we get it done until end of the year. I think in total, you can say, in South Africa, we talk about EUR mid one digit million amount. In Romania, around about higher one- digit million.
Okay. Perfect. Thanks for that. Thank you very much for taking my questions.
Thank you.
The next question is from Guido Hoymann with Metzler. Please go ahead.
Yeah. Good morning, Herr Lesser. Actually, most of the questions have been asked, but maybe again on the cost side and the passing on of increased development costs. Is there actually a time period where tariffs or PPAs have already been locked in, but the material costs are not fixed yet? Is there this sort of risk?
No.
Uh-
No. Usually, we do the PPA when we have a project finalized or we have the project under construction where we have all costs clear. Yeah. There is no and we have no liability to give a certain amount of power to the third party. They take what we produce. Yeah.
Regarding the price development in particular for PPAs, you know, did you close recently some PPAs and did they follow rather, let's say, a cost-plus approach there? You know, so or did they mirror the sharp rise of electricity prices, of wholesale electricity prices? Or how can you find these days, you know, an appropriate PPA price? What are the determinants and how do you see this develop?
Yeah, at the end, we try to fix this kind of contract and we said, okay, we want to fix it by 50%. In the recent days, you will not get any, the contracts are very rare now. For-
Mm-hmm.
Special amount of time, there have been very a lot of people and companies wanted to have this kind of PPAs. At the moment they wait and see, you know, what is regarding the energy prices, where will they go to.
Mm-hmm.
The outlook shows that they are going a little bit down, but nevertheless, some of the companies have to live with and want to live with a number they can calculate with. Yeah. Therefore, there is still PPAs expectations in the market, and we try to look to get the best balance between long-term and short-term, probably spot market. We take advantage of much higher power purchase prices and on the other side, on the contracts. Now we will see what the ministers would say related to the windfall profits. Yeah.
At the end, we took in our planning a part of this increased energy prices into consideration when we gave our guideline for this year. On the other side, we see that this energy prices have been higher and we want to take advantage of this in exactly this kind of balance of risk and opportunities. Yeah.
Okay, maybe last but not least, can we actually expect a positive EBIT for the project development segment for the full year?
Yes.
Yeah. Okay.
Yes.
All right. I think then that's actually all of it from my side. Thank you then, Mr. Lesser.
Thank you.
The next question is from Holger Steffen with SMC Research. Please go ahead.
Good morning, Mr. Lesser.
Okay.
Only a few of my questions are left now. One additional question about your electricity generation. The wind conditions were below average in Q3. What's the development in Q4 so far?
You mean related project development?
No, electricity generation.
Ele-
The wind conditions.
The wind conditions.
In Q4.
Yeah. Yeah. The wind conditions are lower this year. We are in now in the situation that we are at -11% in this moment. This shows that we have a wind yield expectation for this year. Now we have the high wind month, where we have high wind years in front of us. It's exactly now, November, December, January, February, and we will see how this works. We will see how the wind years at the end of the year. I have to tell you the more changes of weather, the better the wind. It's not good for you, but it's good for us in this respect.
From that point of view, we expect an increase in this respect, yeah. Of the output in a production.
Okay. Thank you very much. Maybe at last we can take a first look at 2023.
Mm-hmm.
When we presume taxation of windfall profits, maybe lower electricity prices and higher costs of materials, do you think an improvement of EBITDA will be possible next year?
Yeah. I think so due to the fact that we get that we increase our generation portfolio step by step. Out of this, we see also an increased output and increased EBITDA. Yeah. We talk now about 200 MW, let's say 260 MW , which had been, or maybe we started at, I think around about 230 MW and 220 MW at the year-end. On average, we were somewhere, let's say 240 MW, which made these results. Next year, we will have, at the end of the year, maybe one-third more. Yeah.
Mm-hmm.
This means that the EBITDA will increase in any case. Yeah. When you speak about the margin potential, yeah, the margin potential decreases, but it comes to a normal way. Yeah. More and more to a normal way. Still on a high level in energy prices. Yeah. The margin potential is still high.
Okay. Thank you very much for taking my questions.
Thank you.
Ladies and gentlemen, if you would like to ask a question, please press the star followed by the one on your telephone. There are no further questions at this time. I hand back to Markus Lesser for closing comments.
Thank you very much for your patience, and sorry again for this technical disturbance. Hope to see you on the 17th of November. Bye and have a good day.
Ladies and gentlemen, the conference is now concluded and you may disconnect your telephone. Thank you for joining and have a pleasant day. Goodbye.