Good morning, everyone, from my side. Thank you for joining us today in this conference call on the results of the first half twenty twenty. 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 and strategic highlights of the first half twenty twenty. After that, I will comment on our H1 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 the year for years. As usual, our slides that I will use can be found on our Investor Relations Web number 3. The operating performance in the first half twenty twenty was clearly marked by the expansion of our power generation portfolio as well as the progress with our business model expansion.
Additionally, of course, we had to adjust to an extraordinary situation. The global corona pandemic and the associated restriction have shaped everyday's life and changed economic conditions. While we have also not been able to escape this development, we have reacted quickly and consistently to it. We responded to this threat with a large number of measures, and the majority of our staff have worked from home. That this has been working is shown by the fact that business in the first half of twenty twenty developed as planned.
If you look to the numbers, 335.7 Megawatts had put into operation or is under construction. This is a very high level of activities. In Germany, we have 49 megawatt under construction alone. So and if you see that we had been with 39 megawatts successful in German tender in 2020, shows that we are still in line with our plans. Remarkable is 25 megawatts 125 Megawatt project in July, where we get the commission in July.
And in the same month, we had been successful in the tender. And according to our strategy, we have scaled up. The implementation is fully on track. We invest in international markets, in PV and services, Example, on demand night marking is something where we're investing in as well as in our PV pipeline. So the PV pipeline expanded further in Germany and the United States.
For this additional services and markets and for the whole scale up situation, we need know how. And so our number of employees increased to 4.50 people. In the last year, it had been 386. Looking at the financial on Slide 4, I want to highlight that our H1 results are fully on target. And consequently we can confirm our guidance for the full year 2020 with EBITDA of $50,000,000 to $20,000,000 and EBIT $5,000,000 to $10,000,000 As indicated in the previous slide, the results in the first half were impacted by the investments we made in our own power generation portfolio as well as in our scale up strategy.
Considering this as well as the impact from the corona crisis, the financial performance in the first half was solid and as planned. Earnings declined compared with the strong reference period as we did not sell any project yet due to the portfolio buildup. In the first half twenty nineteen, we sold major projects in Sweden and Poland. The investment in our portfolio are also reflected on higher non realized profits compared to 2019. If you look to the numbers, it has an effect of €6,000,000 So instead of €2,900,000 in the last half year in 2019, instead that we have now EUR 8,900,000.
So this should be added and have to be added if we would have sold it to our EBIT. We have a gross cash position, which decreases slightly to €98,100,000 and is still on a high level. While the earnings decrease was fully driven by the Project Development segment, our stable recurring business, Service and Power Generation, continued to grow in total output. We are still on a high level in an equity ratio 37%. On Slide 5, we see the overview of our own power generation.
We are targeting according scale up to stabilize earnings. This is what is affecting our business now. As I said before, the target is to increase our own generation up to 500 megawatt by 2023. So we will sell mainly projects in foreign countries and not mainly not projects in Germany because we want to bring them in our put them in our portfolio. We have our own generation portfolio currently of 130.1 Megawatts of onshore wind project, which if we would have sold it, would lead to an additional EBIT of EUR 38,000,000 according our estimation pretax.
If you look on the next page, it gives an overview about our pipeline. So we increased our pipeline from 4,950 Megawatts to 5,176 Megawatts in 1 year. Remarkable is that we have 6 32 megawatts in Germany and France, which are our core markets in the permitting stage. It is the highest level in our company history related to projects in permitting status in our core markets. As said before, 5 projects are under construction, 49 Megawatts, including 2 projects, which have been very successful in the tender 2020.
The 25 Megawatt project, I already spoke about. Having said this, we have to understand that we have slight delays in the permitting status. We are not the only one, but it is in the market environment and due to corona, but we are still in our estimations. However, we have the situation that we have strong activities in permitting status. We see that there is a delay, but that the federal government want to do something.
Just today or tomorrow, they want to decide on an invest called in German, Investeschleinungskisib. So that means they want to shorten the process of permitting in court and in the process for itself due to digitalization, they want to have a right level or balance between climate protection and environmental protection. So you see, we see that this area can help us and will help us to shorten times in permission. On the other side, we see that the wind turbine manufacturers are extending their delivery times. So we talk about nowadays about 3 months more than before corona.
Next slide, you see that our project pipeline in photovoltaic is growing. 1 year ago, I think we have been on a level of close to 0 megawatts. Now we have 2 32 megawatts in Germany, Romania and United States. So we are still working on this business as well. As said before, on the next slide, a slide on Page 8, the results are on target.
The milestone payments of projects in France and the United States are affecting this balance sheet. And on the other side, we saw that the operating performance and earnings are driven by the general contractor project development services for own wind farms and for external wind farms. If you see, we built the biggest project in Poland, Yves Yvesna, with 132 megawatts, which is with an independent high line grid line. And so this is something where we have long lasting projects and where we'll get earnings at the end when it's ready. Results from power generation and services and expansion of our power generation portfolio, This is something which is remarkable due to the which is affecting bringing us in leading us into the operating performance and the earnings.
You'll see on the next slide 2 segments. Well, in Project Development, the outbound decreases. I said before why, because we saw the huge projects in Poland and Sweden last year 1 year ago. The EBITDA went down as well because of the investment in our portfolio. The services, the outbound growth, nevertheless, the EBITDA decreases minus 20%.
That's related to the investment in international expansion of our service business. And this is the only part who was affected by really affected by corona related restrictions due to the fact that they sell trainings and on personal to foreign companies, which they couldn't do because of corona. Electricity generation output increases to €12,900,000 plus 56 percent. EBITDA increases to €9,900,000 due to this investment in this own power generation capacities. So looking on next page, the balance sheet remains rock solid is the title and this is exactly the situation.
Cash position is still high, €98,100,000 The decrease is mainly attributed to the investment in our power generation portfolio and dividend payment. The equity ratio is solid at 37%. Liabilities to banks and non current debt and on current liabilities are mainly nonrecourse. So liabilities to bank is €134,800,000 and €27,300,000 on current liabilities are still, as said before, nonrecourse, which is remarkable to know. Next page, we see the execution of scale up.
Now consider we are concentrating 2020 more on start up expansion of our generation power portfolio as said before. And so we are still in line with our targets. Having said this, I think it's important that we bring our outlook for the financial year. We still confirm our guidance, as said before. We have well filled project pipeline with a lot of projects in the permitting phase.
So it's always a question of time, not a question if. So and that's this gives us a good environment to fulfill our targets also in the mid and long run. Ongoing investment, as I said before, and high project activity due to high numbers of megawatts under construction shows that we are still busy and working in line with our plan. Yes, thank you very much. Ladies and gentlemen, this concludes my short presentation.
Thanks for your attention. We are now open for questions.
And the first question is from Holger Stephan with Citi Research. Your line is now open. Please go ahead.
Okay. Thank you very much. Sorry, I didn't hear it. Hello, everybody. Holger Stephan, SMCE speaking.
I have some questions about your figures for the first half. First one, you've generated very large external revenues in the project development in quarter 2 due to progresses in formally sold and now built projects. Can you give us some details about these figures?
Sorry. Hello again and good morning. Yes, Can you repeat the question, please? I didn't guide it due to some disturbances here in the line. Can you repeat, please, the question?
Yes, sir. No problem. I referred to your external revenues in the project development in quarter 2. These were quite high because of milestone payments and other of formerly sold and no built projects, I ask for some details about these figures because revenues were really high.
Yes, sure. We had we got milestone payments from the Burley sales last year. We had milestone payments out of the progress in the project in Poland, Barbitzel, yes? In France, we had projects where we got final payments and milestone payments. So that had been the major point.
And not to forget our steady sales due to to the power production business, yes? And the services, as you see, we have an amount of $9,000,000 now in services. So if you add this all, you come close to these numbers or should come to the number.
Okay. I wondered especially about the higher revenue in the segment project development. And there are despite of these high revenues, the segment EBIT amounted only to roughly EUR 1,000,000 in the second quarter. Is this consequence of the high investments in own wind farms? Or are there other is there any other explanation?
So we are working here as a service provider for the management and for to manage the construction. And if we do it for our own, for example, we had a project Verdelikendorf where we did it, we then get at COD, we get the final payment. And even if we're working on furthermore on the projects to finalize documentation, etcetera, it's not that any big revenue anymore. The major part we take then in that time, yes, when we have COD. So this is an effect we have here.
So we finalize projects, make it simple, yes? Okay.
We see a high total output in project development in quarter 2. I would have expected a larger change in inventory in your profit and loss statements due to the intensive buildup of new wind farms in Germany. Maybe you could explain me the development and give me an outlook what we will see in the next two quarters.
It's always a mixture. So if we start construction, that doesn't mean always that we finalize financing. Usually it is likely this, but the first payment depends on if we take intermedium credit or not, yes? And so we have different stages of a project and the projects differs in the way when we get money and when we ask for money from the bank. So this is this differs.
So and this is has to do sometimes with when we have the permit, when do we have the tender and when can we get the machine, because the biggest part of our payments are the wind turbine order. And so if we maybe we order order the EPC, the roads and the grid, but we start ordering machines later for some reasons, yes, or we pay later. So these are some effects which you cannot bring in a sharp 1 month basis and say, okay, now it's is coming up. If you look into it in the future, we started several projects. We have 49 megawatts in our under construction.
And we start with and we will start this year in any case with 25 megawatts due to the fact that we have this tender already in the permission. So that we have at the end 74 megawatts under construction in any case this year. And when we get financing and when we start construction, that depends on, yes? It depends on if there are if we have the right timing, if we have the environmental protection to consider, but etcetera, so then we start construction when it is necessary or when we can do it.
Then we will see a much higher change in inventory in the second half, I think. Is that correct?
Yes.
Okay. You have now these 5 German projects in realization and the new 25 megawatt project is coming. Which one do you want to add to your portfolio? And which maybe will be sold in this year?
Yes. 1 project with 1 machine with 4.2 megawatts is for a foreign customer. The rest is for ourselves depending we think that the majority part will be part of the portfolio.
Okay. Thank you. My last question, you have made a big progress in the development of your PV pipeline in quarter 2. Can we expect a similar speed in the next quarters? And when will we see 1st PV project in Stage 3?
Our target is to have the first project in Phase 3 this year. And I hope that we can we are working very hard to double the pipeline this year. So but we are working on this. So we would see.
Okay. Then good luck and thank you very much. Thank
you. The next question is from Jan Bauer, Warburg Research. Your line is now open. Please go ahead, sir.
Hi Lou, and good morning from my side. I've got a few questions regarding H2. So you're still you're lacking off a few millions in EBIT to reach the lower end of your EBIT guidance. So can you shed a little bit more light on how you want to achieve this target in whatever selling project rights or selling finished German projects?
Yes.
It's mainly driven the idea that we get the EBIT is driven by the sales of foreign of project rights in foreign countries. So we have the markets of United States, Romania, where we expect a sale of wind and or PV projects. In Poland. We think that there will be milestone payments maybe. And we see that the power generation will lead to another turnover and EBITA, so I have to say.
Yes, you see, the bigger the portfolio will be, the more the EBITDA is a factor we have to look at, yes, to see if we have a good performance or not.
Yes. It's clear on that one. So you're expecting a few of your parks for the internal portfolio to commission before Q4 so that they will still get, let's say, favorable quarter of wind yields?
We think that the first projects will be ready this year, yes, part of these 5 projects, but not all. So a part will bring an output and will add the performance of the power generation business.
Okay. Another question is like the 4.2 Megawatt Park in Germany, the Bjorgawind Park. So this park will be for sale, is this right?
There we do a kind of service for the we have made a permission, we looked at the financing is there, we do the construction. And it is a part of an enabler for some other megawatts we got in this area.
Okay. Regarding your U. S. Or your foreign pipeline, so there's still the target to sell probably PV project or something in Panama? And also the Chilocco park is still for sale in the U.
S. Is that right?
So Panama, we did see a big impact of corona. So we don't see any sale this year anymore of wind power project. In United States, it depends very much on the election, on the next election. So we have a lot of constraints to the fact that the federal government is doing everything to slowing down grid connection processes of application in this respect. And so we hope that the election will support us.
Anyway, we are in the sales status of Chilocco, and we plan that this will be sold this year.
Okay. Thank you. Regarding so you still have the large wind parks, Jasna and Malabergue in the construction. So can you give us a little bit more light on what kind of milestone or
So it's a lower one digit in the lower one digit million area per project. Per project? Yes.
Okay. Thank you. So and one last question. So you received you had a successful broader 25 megawatt project through the tender in July. So will this project also be for the internal portfolio?
We think so. Yes, we
we. Okay.
All right. But only next year, so this shouldn't be finished this year, right?
Yes. It depends. So this year we start and this year we will get a financial effect due to that we have a financial we think that we get a financial close this year and that we get our development payments. And on the other side, the delivery times of wind turbines will depend on that. And therefore, we think that this is a or we are sure that it's a project for next year.
Okay, perfect.
And yes, the very last question. So you still have some 59 megawatts in Phase 2 in Sweden. So is this all the possible project rights sales for this year or more in next year?
No, this is something it's the next wave we are working on. And it is not planned for this year or next year. We extend the pipeline and then we will see what we can do. But let me say, one project is in a later stage with and we think maybe that we have an environment when the environment is good in Sweden that we sail it. But just right now, it is not in our planning in this year.
Okay. Thank
And the next question is from Karsten von Blumtau, Firstmillan Equities Research. Your line is now open. Please go ahead, sir.
Good morning, Markus. This is Karsten. You mentioned in your report and you said that in Q2, you started 2 new projects in Germany. Could you name these projects and give us the megawatt capacity?
Yes. I'm always careful with the names because we have Okay.
I can also live with
the megawatts. We have more and more things in place where we have the people are against it and do everything against it. So I'm always careful a little bit. In the past, we did it, but nowadays, it's there are professional groups on the road. So we are talking about just right now the last project where we had a tender with Airport OST, which is 5.5 Megawatts, 5.5 Megawatts.
This is only for your information, it's one of the biggest machines of the newest generation with 158 meters rotor height. So it's 4.5 Megawatt, 1 machine. And the project is on time and will be finalized this year. We are working on a project in with 2 machines in Northern Westphalia, which is a project for more end of the year beginning of next year. So and 1 project, 2 projects in Germany, in Schleswig Holstein, which will be ready this year of around about 21 megawatts.
We're depending a little bit from the of the wind turbine manufacturers, but we plan to finalize this year as well. But again, this is a question where we see just right now delays with the delivery of the wind turbine manufacturers. But nevertheless, we are will not affect us in our EBIT guidance.
All right. Thanks for that. In your report, there is also the project mentioned by WKN. Could you give us the planned capacity of that project?
That's where I talked about 21 megawatts. One of them had been the project in Ferne with 8.4 Megawatts, 2 machines.
Okay. 8.4. Okay, perfect. And when we look into the market in H1, yes, it was better than a year ago, but still the overall installation level was very low. Given the current situation regarding approvals, do you see any significant improvement in this situation next year?
Or do you think it will continue?
Yes. That's where I spoke about this in German called Investisun Perslaniusgesetz, which will be discussed today in the federal government. And in this Investecituronspecheslaniusgeset, so Invest Speeding Up Law, they say, for example, that you have only a one stage process if you have any lawsuit instead of 3. They say that you can that there should be a digitalization process installed for the permitting process. It's important because if you have to speak with the usual people and have to offer them what you want to do, So you have a hearing and this hearing can't be done due to the fact that you are that we have corona environment.
This is something what caused us delays.
All right. But then if it goes through, there is some hope for next year that the market gets better. I mean given the bad market, you performed very well with the approvals you have received so far. So obviously, you've done a good job there. Just a final question from my side.
If I add up the projects for your own plant portfolio this year, which could be added to your portfolio in megawatts, how much could that be?
As I said before, we are the main part of the project, which can be finalized today, should be a part of our portfolio. In the moment, we are depending on the delivery time, so therefore for the manufacturer. So therefore, it is not finally to say which projects and which bigger ones we can add to the portfolio this year. I'm sorry, but this doesn't matter in terms of the payments we planned because of all these projects we would like to do the financial close this year. And therefore, we get our project development fees.
Okay, perfect. Then thank you very much for taking my questions.
Thank you,
Karsten. And we do have a follow-up question from Jan Bauer, Robert Research. Your line is now open again.
Hello again. So I just got one question out of the question from Carsten. So you're trying to do you receive a project developer margin for projects you keep in your internal portfolio?
Exactly. And yes, this is the case.
Okay. But how do you do that? So usually, like when you activate an own build wind park in your balance sheet, you're only allowed to, yes, to activate the material the building costs. So how do you do that?
So you have to see the difference between the segment and the concern. So in the segment, you can see that, yes? In a concern in a fully complete concern, you can't see that, you're right. Because if you don't sell it, you can't get the EBIT exactly.
Yes. Okay. But that's in the end like what we see in the consolidation of the group. So we see the EBIT margin of a finished project in the EBIT of the segment. But in the consolidation, we then see the removal of the developer margin, right?
Exactly.
Okay. Perfect. Thank you.
And we haven't received any further questions. So I hand back to Mr. Lesse.
So thank you very much for your interest, and I wish you a fantastic and not a warm day. See you. Bye.