Hello, welcome everyone, also from my side. Thank you for joining us today in this conference call on the results of the first half of the year, 2023. Going on, 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 financial highlights of the first 6 months. After that, I will comment on our financial figures and operational achievements in more detail. 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 is, it's 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 3. In operational terms, we had a dynamic start into the first half of the year. Our project pipeline, again, achieved record high level, reaching 60.6 GW, gigawatt peak. This represents an increase of 83%. We do this because we see lack of sites upcoming, so we prepare ourselves for the future. We received building permits for wind parks in Germany alone, and we were successful in all tenders in which we participated. We have sold, put into operation, or have under construction projects of about 420 MW, megawatt peak by end of June this year.
Strategically, of high importance, we grew our own wind power generation portfolio from 260 MW end of June 2022 to 346 MW as of June 30, 2023. As per end of June, we had projects with a capacity of 183.1 MW under construction. These projects include projects with a capacity of 112.3 MW in Germany, 10.8 MW in France, and 60 MW in Sweden. In Sweden, we built a wind farm for a client that we will keep out in our service. In total, out of 183.1 MW capacity, we will manage around 66.6 with our service operations. Speaking about our service, we are especially proud of our segment.
It now manage capacity of about 2.7 GW, representing an increase year-over-year of about 21%. That is an impressive performance behind the number. I will come back to the service segment later. Before I will go into the financial performance, let me please spend a few words on some impacting factors limiting our overall success. We have to recognize that the Ukraine crisis and post-COVID-19 effects still have been leading to unstable supply chains and higher raw material prices, which resulted in higher costs for wind turbines and modules. Additionally, we are facing a higher interest rate environment and must cope with higher lease for rented land. These are facts that we try to tackle with our new procurement strategy and that only can be offset by higher power prices, partially.
On Slide 4, we see looking at the financial, we are pleased that we grew our EBITDA by 3% to EUR 18.1 million, considering the hindering factors I just mentioned. This also explains, to some degree, why the EBITDA performance was leading the total output growth of 11% to EUR 116.7 million. The EBITDA performance is laying the ground for achieving our guidance for the remainder of the year of EUR 30 million-EUR 40 million. If we adjust our EBITDA for our so-called hidden reserves, the operational profit came in at EUR 40.60 million, significantly up from last half year's figures of EUR 23.5 million. This clearly underlines the strength of our business operations.
Our results were impacted by a muted performance of the power generation segment, which benefited from the higher installed base on the one hand side. On the other hand, wind yields were damped, and power prices came down over the course of the first six months in 2023. The more our service, as well as our project development segment, contributed strongly to our performance. All in all, we are satisfied with our earnings performance, given all circumstances I mentioned before. Hence, our cash position came down by circa EUR 70 million compared to last half year, to EUR 104.7 million. It is worth to say that our liquidity position, including credit lines, stood almost stable at EUR 165.5 million.
Before I will share your share price performance, I'm pleased to say that PNE has been included in the TecDAX in July. This shows once again, that our strategic development from a wind power project developer to a clean energy solutions provider, is recognized by the equity market. Next slide, please. Ladies and gentlemen, please follow me now to our share price performance on chart five. The main message here is that after the end of the M&A speculation of share price performance, normalized in recent months, in line with major indices, which whom we can be compared with. If we look on the renewables index, RENIXX, we even slightly outperformed it. We look to Slide 6, to our own generation portfolio.
We see that the target of Scale up 2.0 was to get, is to get 1.5 GW by 2027, and our target from Scale up 1.0 was 500 MW. In the moment, we have 346 MW of onshore wind project in operation. A further approximately 123 MW in Germany and France, intended for a portfolio, were under construction. Approvals of approximately 151 MW received in Germany and France, which is a very good result and shows, and it gives us a stability for the next growth and the next construction wave in the next year. This year, all of this project will be started this year.
In reserve, accumulated in a portfolio of EUR 194.6 million, this is opposite to EUR 136.8 million in the year before. In the moment, in the first half year, we produced 325 GW hours of green energy. This is an increase of 21.3% compared to the last year in June. We saved with that 245 kilotons CO2. Additionally, as I mentioned before, we increased this project pipeline. This is a very strong growth in the, between the years. When you see that we now have a pipeline of 16,590 MW, megawatt peak. This is an increase of 7,535 MW, megawatt peak in one year.
You have to if you divide it in the technologies, then we see the wind onshore pipeline grew up to 8,622 MW, which is a plus of 1,975 MW. The PV pipeline jumped to 5,468 MW, which is an increase of 3,060 MW peak. The first time we included wind, the wind offshore projects into the pipeline, with 2.5 GW, whereby 2,000 MW are in Vietnam and 500 MW in Latvia. In any case, we see that this is the basis for the next year's growth.
Shows, as it's mentioned before, due to the lack of sites, we expect also in the future, it shows a good, good, very good growth potential. If you see the project pipeline, around, we increased our pipeline in wind onshore to 8,622 MW, which is close to 2 GW on a year-on-year base. Additionally, interesting is here, that we see that our high, that we still have a high level of project in the permitting phase in Germany and France, in our core market, with around 760 MW. This number is increasing, despite the fact that we already have now projects under construction, and will have, and we are in construction preparation.
In Germany, it's a growth to 2,300 MW, and we have six wind farms under construction, mainly for the own generation portfolio. Mansbach Wind Farm completed in the first half year of 2023. We also received approvals of five wind farms in the last half year, that is around 124 MW. In France, we got approvals of two wind farms, 26.4 MW. One project is under construction with 11 MW. You look to the PV pipeline, there's a very strong growth. We could take additional markets on board and 3 GW peak on a year-on-year basis, additionally.
We could make first sale in Romania with a, or second sale, I have to say, with five photovoltaic project combined around about 208 MW peak to TotalEnergies. We look to the P&L. We have a positive development in all areas. The total output grew by almost 11% to EUR 116.7 million. Last year, we had been at EUR 105.2 million. The EBITDA is up by 3% to EUR 18.1 million. If you look to the, to the results, we have to face that the operating performance in the project development have showed a strong profit contribution. The results of the power generation are a little bit down due to the fact that we had low wind yields in this time.
We are around about minus 10% in the wind yields in this year. The services growth we see with a volume of more than 21%. Impact of the final financial result comparison is distorted by a valuation of the interest rate steps. You know, in the past, we had the advantage out of it. Now, we have a slight disadvantage out of it, and this impacts all the time on the financial results. Consequently, the net income turned into negative terrain with minus EUR 40.2 million. We look more in the detail of the segments. Again, all segments have been positive. Project development, plus 34.6% to EUR 96.1 million. The EBITDA turned positive. In the last year, we had minus 8%, EUR 8 million, and now we have EUR 9.6 million positive.
Services, very good development, grew to EUR 14.7 million, down about 28.9%, driven by a strong order entry that shows that we made the right investment and have the right strong service products. The EBITDA is up to 4.6%, which means +48.4%, and the power generation, +34.2%. Again, lower power prices, lower wind supply, despite the larger install base, the reason for this minus EBITDA in opposite to the last year, of EUR 28.3 million. If we look to the balance sheet, we have still equity ratio of 22%. We are, the liquidity is still high on EUR 104.7 million.
Even having in mind that we have a high equity need in terms of project development, a bigger project pipeline needs more money, as well as more investment in, in the project, need more money. Therefore, we are still on a high level, which is good. The current debt is increased. You know, the corporate bonds, still EUR 55 million, 5%. The liability to banks are mainly non-recourse, around about EUR 411.3 million, and EUR 40 million in the current liabilities, as well, non-recourse, mainly. Ladies and gentlemen, this leads me to the outlook. We are satisfied with our results so far in the first half year of 2023. The foundation for achieving our ambitious targets for the remainder of the fiscal year have been laid.
We confirm to expect the full year 2023 for group EBITDA at a range of EUR 30 million-EUR 40 million. This guidance is supported by the market environment has become more challenging, as risks related to still unstable supply chain and rising material and equipment costs have become obvious. The market provides opportunities such as power prices, as well as bigger machines, as well as future other technologies like hydrogen, and a big need of green energy. Our continuing portfolio built up 308 MW under construction for own generation portfolio. You remember, we had a target of 500 MW in Scale up in our firm, I would say one point, one point, zero.
If you put everything together, we have now in the moment, we have around about 112 MW under construction, and in Germany, and 11 MW in France. In total, we have 308 MW under construction or in construction preparation. If you add this to our 346 MW, then we are come close to 653 MW we will have under construction or in operation in a very soon time, so at minimum at year end, year end. This is what we have to face now, which is very high, above about our target of 500 MW, which we then certainly are going to meet. We have a well-filled project pipeline, which is the basis for the future business.
Ladies and gentlemen, before I conclude my presentation, let me please allow two further remarks on the strategic side. First, we invested in artificial intelligence-related technology by acquiring a 51% stake of the British digital company, Bitbloom Ltd. Bitbloom is a renowned, renowned provider of data analytics and monitoring software and services, with a proven track record. The products of Bitbloom will support our ambition to provide optimal and innovative services, and have already been extensively proven to increase the performance and yield across our own wind portfolio. Second, the strategic, strategic review process concerning our U.S. activities was concluded. We now have started a structured sale process of the activities.
To remind you, we believe that an exit from our US business at the current market stage, with a reasonable price level for our activities, could free up resources, which we could steer into our business expansion in Germany and other markets abroad. Ladies and gentlemen, this concludes my presentation. Thank you for your attention. We are now open for questions.
Thank you very much. Ladies and gentlemen, if you would like to ask a question, please press nine and the star key on your telephone keypad. In case you wish to withdraw your question, please press nine and star again. Please press nine and star now to register for a question. First up is Holger Steffen from SMC Research. Over to you.
Hello, Mr. Lesser. Thank you for a detailed report for the first half year. In your report, you've mentioned that you want to achieve the biggest part of your project development revenues in the second half. You can give us some more details which projects are ready to be sold now?
Hello, Mr. Steffen. Yeah, we are having several sales processes in, in place, in sometimes difficult markets. Nevertheless, we think about projects in PV project in Romania, around 40 MW. We would, we would, we think about projects, bigger project in Panama. We look for projects in Poland, a pipeline, and in Italy, if we could, if we could, get something out of this in this moment, because we see that there is a good pricing situation.
Mm-hmm. Okay. You've, you've mentioned Italy. We saw a big step forward in your PV pipeline in Italy in the second quarter. What, what are the main drivers of this successful development? Then I, I think we will see a, a sale of PV projects in Italy, is that correct?
Yeah. First of all, yeah, we, we hired a team last year, a very, a very good team, we think, and invested in Italy due to the fact that we see that the, especially on the photovoltaic side, there will be a big need for photovoltaic projects in the future, and that the prices rose. From, from that point of view, we invested, and now we have the first results on first projects, which, which are on early stage. We have still projects where we worked on in the past, and this part of this project we would like to, to sell. We look to the market, if we can get something out of this on early stage. If not, then we keep them, and we sell them on a later stage.
In the moment, the prices are good, and take a contribution for the from the size, high, high price level would be, would be our target.
Mm-hmm. Okay, fine. In, in Poland, I think you will sell maybe some wind projects. We see there are a big, a big improvement in your pipeline, too, in the second quarter. Maybe you can give us some further information about these new projects?
We would like to sell projects which are PV projects, due to the fact we had prepare projects according the last rules in Poland, and we have to face that the regulations have been changed. We have to reshape and redesign the projects. That there is a delay in from from our side of view and and and that what we can deliver as a ready project. Nevertheless, this is is something what everybody in the market gets, got, got on the desk, so therefore we are not alone. Nevertheless, there is still is still a high value of this project, and therefore, we are talking about a reshaping and redesigning of the project, which costs a little time.
Nevertheless, we are now working on PV project as well, and, we see, good development there.
Okay, fine. You've mentioned the sale process of your U.S. business. Maybe you can give us a timetable for the next step?
Yeah, I hope that we, that we can finalize the sale. It depends on several factors, but I would see something in the next two months.
Oh, okay. That's good. My last question, you have significantly improved your material cost ratio, especially in the second quarter. Can you give us some details, how you managed this regarding rising turbine prices?
Yeah, this, we have to see what is, what is in this, in this material factor. There are several, several, things in. Material factor, this means also how, how are the development of the project in each, in each area, and what do we put in, in, in discussions, also with our, with the, with Deloitte. I can't give you the details about this in, but nevertheless, because there are several projects which are, partially or completely, take into consideration, and this depends on criteria, which are, which are different per project. Therefore, I can't give you any information in detail. If you need any information in detail, Mr. Klobart will. We have to connect this with Mr. Klobart.
Okay. Thank you very much for taking my questions.
Thank you.
The next questioner is Karsten von Blumenthal, from First Berlin. Over to you.
Hi, Marcus, this is Carsten. First of all, congratulations to your reappointment. I'm very happy to hear that. I still have a couple of questions. My first one is regarding this EUR 2.5 million cost reimbursement from BSH. This is obviously booked in Q2, and in the report, it is said that PNE expects even more money from this offshore wind reimbursement for costs you had earlier on project. Could you tell me how much more you expect in coming months and years?
Yeah, we, we, we had cost at that time. We talk, we talk about two-digit millions. We talk at that time, I think, it was in total EUR 80 million. We require this cost back. They say, yeah, we only need, so the Bundesministerium, Ministry of Economics, they say, "Yeah, you get your damage back, but the value of the studies are now, in this moment, at that level of EUR 4.5 million. Take it or leave it." We say, we had the cost in the past, if we, if we wouldn't have, wouldn't have taken, make, made this studies, you never would have known that this area is, is possible to, to develop.
These are the discussions. In the moment we say: Please, we take the EUR 4.5 million. Nevertheless, we are, we are open to go into a deeper, deeper research and into a court again.
Okay, that means, in addition to the EUR 2.5 million you have received in Q2, you may receive a further EUR 2 million, and you may litigate the German state for more, if that is up to you then on, on your decision, right?
Yes.
All right. Understood. Regarding your electricity generation, you said, of course, lower wind and lower prices, but if I just look into your Q2 figures, I think they were quite good. What is amazing is the EBITDA, which is basically 100% in Q2. I think this is due to a one-off effect that is mentioned in your report. There is a revaluation of provisions for the levy on extraordinary profits of EUR 3.1 million. Could you confirm that this is booked in Q2 in the electricity generation segment, and that this is the explanation for the very high EBITDA in Q2?
It was due to the fact that we have had to expect, because of the energy price break, we had to expect a volume of three. According our calculation, it could have maybe that, that there is a that we have to pay, that was depending on a wording, an expect explanation from the ministry. This, this explanation we could get in the two months ago, therefore, we booked it into the, into this volume when we saw that we don't need this to pay.
All right, great. Basically, in Q1, you said that you have to pay EUR 3.1 million. Now, this is kind, kind of reversal of, of this EUR 3.1 million or.
Yeah.
Okay, perfect. Yeah, well, that explains the excellent result, but even without it, it was a good result. Could you give us a rough idea by how much the average selling price in Q2 fell compared to Q1? What did you roughly earn per megawatt hour in Q2 for your for your wind power?
Yeah, that depends because we have a wide variety of different ways of selling our energy. As you know, minimum 50%, we have, we have already PPAs, long, long-lasting and short-lasting PPAs made before the energy prices increase, on the top of it, you know, so we have different figures. Additionally, we have the Erneuerbare-Energien-Gesetz tariff, and the tariff of according Erneuerbare-Energien-Gesetz is depending on the quality of the project itself. Therefore, I can't tell you a value, and an average value will not help you. This is difficult.
All right, if I calculate it right, it is roughly 10% less than in Q1. Is that an approximation of the price?
Yeah, yeah, that, that could be in, in, in a rough figure, so but no guarantee on it.
Okay, perfect. Thanks for that. I have seen that you have added the two offshore wind projects into your pipeline. That is the Vietnam and the Latvia project. My question is: Why have you done this now in Q2 and not in Q1? What has changed, that you now say, "This is so good that we put it into our pipeline?
Yeah, we could in, in Latvia, we could see that there is a, is a, is a development ongoing, that the need is higher. We, we, when we went to the diligence, this was one part, and we took it over and looked deeper into the environment with politics and so on, and we could see there's a big need, and we made our budget. Then we, When we spent money on a special amount, it should be aware of to the shareholders, we thought, and that was the point of giving you the information and putting it into our supervised project so that you have a full picture as well.
In Vietnam, In the first quarter, we could make our MOU with the government of this area, the Binh Dinh region, and so we put it in the second quarter, into this overview.
All right, that sounds very promising. Thanks for your feedback there. If I look into your own plant portfolio, in the H1 report, you say you have 346 MW.
Mm-hmm.
When I look into your corporate news of April 24 , when you reported that you had put Mansbach Wind Farm into operation, the portfolio size given there was 349.5 MW.
Mm-hmm.
Now I wonder, what happened in between that you have lost, 3.5 MW in your portfolio? Or is there a, a wrong number somewhere? 'Cause, these numbers do not fit together.
Yeah, we had a change in, in, in types in some projects, yeah. In Papenrode, we had had a change of, I think around about 2.4 MW in the. When you add, when you add all megawatts in with this type, it was a slight change of type, and additionally, we added 1.6 GW Kuhstedt, which was a repowering issue. There, there are some, some projects up and down, and in, in total, in total, it was this, this, this, this difference.
The current number after reducing Papenrode by 2.4 MW is now 346 MW?
Yeah, this was Papenrode. This was for the, for the future project, and we had one goodwill as well. This is the, for the, for the IPP portfolio, it is due to the fact that we put in Papenrode two projects. This is a repowering project, Papenrode. We put two machines out of the, of the, of the wind farm, because we now want to take and rebuild this wind farm with bigger machines, and we had to take them out due to the fact that we need to make the roads and the preparation for the new project. Two machines had been, had been eliminated, yeah.
Ah, of course. Understood, yes. Yeah, that, that explains that. Perfect. Last question is regarding your service segment. That was a very good EBITDA you reached despite lower external sales, but you have quite high internal sales. Is the strong EBITDA simply because for your internal sales, you also calculate an EBITDA, that's why it is up, although external sales is down?
Yes, there's something, but you have to consider that we always come up with market prices, because we are offering our services also for third parties. There's always the benchmark with the market prices. It means, if we would have, would have taken it from, and purchased these services from the market, we would have paid the complete sum, but we wouldn't have gotten the margin. This is, so there is an avoidance of, of cost in total for the company. Yeah.
Okay. Basically, to, I have to calculate both external and internal sales to, and relate it to the EBITDA, to get the proper margin?
Yeah. Yeah, yeah. Maybe this is the case. Maybe we should discuss this in, in detail out of, out of this, format here.
Yeah. Perfect. That was very helpful, Marcus. Thank you very much.
Thank.
Yeah, bye-bye.
Thank you for your good wishes.
Thanks.
Moment, there are no further questions, so if you have any additional questions, please press nine and star now. The next question comes from Guido Hoymann from Metzler. Over to you.
Yeah. Good morning, gentlemen.
Good morning.
The question I might have been asked, I was called in another call, so sorry, apologies for that in case. Do you have any news on the sale of the U.S. business to share with us?
Yeah, we, we, we are now in the sales process, and we got non-binding offers, and now we talk about, about the next step and about prices and conditions and SPAs and due diligence questions. This is where we are.
Okay. Still some time to go, obviously.
I said, two months, in two months, I would like to see a result.
Mm. Okay. Okay. The second one would be on, I think you sold some project rights in Romania recently.
Mm-hmm.
Here, you know, it's, it's rather, let's say, yeah, rather structural question. You know, I think you built this pipeline very fast from 100 MW, I think, in 2021 to some 600 this year.
Mm-hmm.
But one might say here that you are selling even faster, than building it up. The question is.
Yeah, we think it is a good. Romanian market has a good momentum.
Mm.
To participate from this momentum, it makes sense to sell projects even on earlier stage with the condition to finalize these projects, yeah. To get further milestones afterwards when they are ready, but with a good contribution and with a good sale in the, in the first, for the first rate. This is, this is our strategy there. It means sometimes, yeah, we build it up fast, and on the other side, we sell fast. Yeah, in the moment, we see a big interest in these kind of projects.
Okay. Then, then maybe on the growth of your pipeline, you know, actually, we are seeing now and hearing now, all over the place, you know, that approvals and permits are accelerating. At the same time, the growth of your pipeline was quite, let's say, moderate. Anything to share on that?
I'm to be honest, I'm really happy that we have around 760 MW in end of half year in Germany and France, in the permitting procedure. This is the biggest volume ever. Therefore, I'm convinced, and I'm sure that we, that we'll get a good output. Make it really simple, take 350 MW roundabout, plus the 760 MW, mainly, let's say 700 MW or something like this, then we are above 1,000 MW, which we can take out of our wind projects in the next couple of years.
I'm not sure if this is the full volume or if we get less projects, but nevertheless, it gives you a feeling that we are, that we are on a good path to reach our target of 1.5 GW in 2027.
Okay, maybe last question, on the, you know, on your IPP portfolio and the, the prices, you know, for, per megawatt. You have assumed, you know, I'm actually asking this, this question most of my companies.
Mm.
You know, the, because many are building up IPP portfolios and have quite ambitious targets, normally by the end of the decade or so, earnings targets.
Mm.
When you look at the forward prices for electricity, they are actually coming pretty much down or have come down pretty much. You know, we're talking about EUR 70, EUR 80 here in Germany, maybe in 2, 3, 4 years time. Do you give us any indication with which prices you have been, you know, making your business plan, you know, your targets?
Yeah. We take always from minimum two providers of an energy power curve or energy, the power curve. That is what we look at, and what we take the middle, and then the average and of the base case, and that's what we take for our calculation.
Mm. Okay.
Nevertheless, I'm not sure if the prices are not too low.
Mm.
I, I think if that is what we see as a target.
Mm.
You can divide the providers of the power price curves into two ways. One are very, very depending on the, and looking to the targets of the politics.
Mm.
The other ones have their own ideas, they mix it all the time, but the one a little bit more and one less, and then you see differences in pricing.
Mm.
We will see what is upcoming, and I'm pretty sure that the price is, in some areas, too low, I would say. That's my, my opinion.
Yeah.
I'm not the expert, but I see the need of green energy if the big hydrogen projects coming up, the big changes in the, in the, in, in, in the production. Therefore.
Okay. All right, then, very helpful, and thanks a lot for answering our questions.
Thank you.
If you have any additional questions, please press nine and star now. There are no further questions. With this, I hand it back to Markus Lesser.
Yeah. Thank you for your interest, and hope to hear and see you soon.