Good morning everyone from my side. Thank you for joining us today in this conference call on the results of the first half 2020. Before I start with the presentation, I would like to share with you an outline of the presentation and procedures of today's call. As usual, I will start with an overview of the operational and strategic highlights of the first half 2020. 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 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 number three.
The operating performance in the first half 2020 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 restrictions have shaped everyday 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 2020 developed as planned. If you look to the numbers, 335.7 MW had put into operation or is under construction. This is a very high level of activities. In Germany, we have 49 MW under construction alone.
If you see that we have been with 39 MW successful in German tender in 2020, it shows that we are still in line with our plans. Remarkable is one 25 MW project in July, where we get the permission in July, and in the same month we had been successful in the tender. According to our strategy, we have our scale-up. The implementation is fully on track. We invest in international markets, in PV and services. Example, on-demand night marking is something we'll be investing in as well as in our PV pipeline. The PV pipeline expanded further in Germany and the U.S. For these additional services and markets and for the whole scale-up situation we need know-how. Our number of employees increased to 450 people. In the last year it had been 386.
Looking at the financials on slide four, 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 EUR 15 million-EUR 20 million and EBIT EUR 5 million-EUR 10 million. 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 2019, 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 EUR 6 million. Instead of EUR 2.9 million in the last half year in 2019, that we have now EUR 8.9 million. 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 EUR 98.1 million 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 the equity ratio, 37%. On slide five. 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 said before, the target is to increase our own generation up to 500 MW by 2023. We will sell mainly projects in foreign countries and mainly not projects in Germany, because we want to put them in our portfolio. We have our own generation portfolio currently of 130.1 MW of onshore wind projects, which, if we would have sold it, would lead to an additional EBIT of EUR 38 million, according our estimation, pre-tax. If you look on the next page, this gives an overview about our pipeline. We increased our pipeline from 4,950 MW to 5,176 MW in one year. Remarkable is that we have 632 MW in Germany and France, which are our core markets, in the permitting stage. That is the highest level in our company history related to projects in permitting status in our core markets.
I said before, five projects are under construction, 49 MW, including two projects which had been very successful in October 2020. The 25-MW 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 Investitionsbeschleunigungsgesetz. 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.
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. We talk about nowadays about three months more than before Corona. Next slide, you see that our project pipeline in photovoltaic is growing. One year ago, I think we had been on a level of close to 0 MW. Now we have 232 MW in Germany, Romania and United States. We are still working on this business as well. As said before, in the next slide on page eight, the results are on target. The milestone payments of projects in France and United States are affecting this balance sheet.
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, with 132 MW, with an independent high grid line. 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, leading us into the operating performance and the earnings. You'll see on the next slide to the segments. Where in project development, the output decreases. I said before why. We sold the huge projects in Poland and Sweden one year ago. The EBITDA went down as well because of the investment in our portfolio. The services, the output grows.
Nevertheless, the EBITDA decreases -20%. That's related to the investment in international expansion of our service business. This is the only part who was really affected by COVID-related restrictions. Due to the fact that they sell trainings and personnel to foreign companies, which they couldn't do because of COVID. The electricity generation output increases to EUR 12.9 million, +56%. EBITDA increases to EUR 9.9 million due to this investment in this own power generation capacities. Looking on next page, the balance sheet remains rock solid, is the title. This is exactly the situation. Cash position is still high, EUR 98.1 million. 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 current liabilities are mainly non-recourse.
Liabilities to banks, EUR 134.8 million and EUR 27.3 million on current liabilities are still, as said before, non-recourse, which is remarkable to know. Next page, we see the execution of scale-up. Now we are concentrating in 2020 more on start of expansion of our generation power portfolio, as said before. 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 a well-filled project pipeline with a lot of projects in the permitting phase. It's always a question of time, not any question if. This gives us a good environment to fulfill our targets also in the mid and long run.
Ongoing investment, as said before, and high project activity due to high numbers of megawatt under construction shows that we are still busy and working in line of our plan. Thank you very much. Ladies and gentlemen, this concludes my short presentation. Thanks for your attention. We are now open for questions.
The first question is from Holger Steffen, SMC Research. Your line is now open. Please go ahead.
Oh, okay. Thank you very much. Sorry. I didn't hear. Hello, everybody. Holger Steffen, SMC 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 two due to progresses in formerly sold and now built projects. Can you give us some details about these figures?
Sorry. Hello again, good morning. Can you repeat the question, please? I didn't get it due to some disturbances here on the line. Can you repeat please the question?
Yes, no problem. I referred to your external revenues in the project development in quarter two. These were quite high because of milestone payments and other of formerly sold and now built projects. I ask for some details about these figures because revenues were really high.
Yeah, sure. We got milestone payments from the Burleigh sales last year. We had milestone payments out of the progress in the project in Poland, Barwice. In France, we had projects where we got final payments and milestone payments. That had been the major points. Not to forget our steady sales due to the power production business. The services, as you see, we have an amount of EUR 9 million now in services. If you add this all, you come close to these numbers. Well, you should come to the number.
Okay. I wondered especially about the higher revenue in the segment project development. Despite of these high revenues, the segment EBIT amounted only to roughly EUR 1 million in the second quarter. Is this a consequence of the high investments in own wind farms, or is there any other explanation?
We are working here as a service provider for the management and to manage the construction. If we do it for our own, for example, we had a project, Rödigsdorf, where we did it. At COD, we get the final payment, and even if we're working furthermore on the project to finalize documentation, et cetera, it's not that any big revenue anymore. The major part we take then in that time when we have COD. This is an effect we have here. We finalize projects, make it simple.
Okay. We see a high total output in project development in Q2. I would have expected a larger change in inventory in your profit and loss statement due to the intensive build-up 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. If we start construction, that doesn't mean always that we finalize financing. Usually it is likely this, but the first payment, it depends on if we take intermediate credit or not. 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. This differs. This 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. Maybe we order the EPC, the roads, and the grid, but we start ordering machines later for some reasons. We pay later.
These are some effects which you cannot bring in a sharp one-month basis and say, "Okay, now this is coming up." If you look in the future, we started several projects. We have 49 MW under construction, and we will start this year in any case with 25 MW, due to the fact that we have this tender already and the permission, so that we have at the end, 74 MW under construction in any case this year. When we get financing and when we start construction, that depends on if we have the right timing, if we have the environmental protection to consider birds, et cetera. We start construction when it is necessary or when we can do it.
We will see a much higher change in inventory in the second half, I think. Is that correct?
Yes.
Okay. You have now these five German projects in realization and the new 25-MW project is coming. Which one do you want to add to your portfolio and which maybe will be sold in this year?
One project with one machine with 4.2 MW is for a foreign customer. The rest is for ourselves. 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 two. Can we expect a similar speed in the next quarters and when will we see a first PV project in stage 3?
Our target is to have first project in phase III this year. We are working very hard to double the pipeline this year. We're working on this. We will see.
Okay. Good luck, and thank you very much.
Yeah. Thank you.
The next question is from Jan Bauer, Warburg Research. Your line is now open. Please go ahead, sir.
Hello, and good morning from my side. I've got a few questions regarding H2. You're lacking of a few millions in EBIT to reach the lower end of your EBIT guidance. 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?
Yeah. The EBIT is driven by the sales of project rights in foreign countries. 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 EBITDA, so I have to say. Yeah, you see, the bigger the portfolio will be, the more the EBITDA is a factor we have to look at to see if we have a good performance or not.
Yeah. Agree on that one. You're expecting a few of your parks for the internal portfolio to commission before Q4 so that they will still get a, let's say, favorable quarter of wind yields?
We think that the first project will be ready this year. Part of these five projects, but not all. A part will bring an output and will add the performance of the power generation business.
Okay. Thank you. Another question is like the 4.2 MW park in Germany, the Bürgerwindpark. This park will be for sale, is this right?
There we do a kind of service for it. We made a permission. We looked at the financing is there, we do the construction, it is a part of enabler for some other megawatts we got in this area.
Okay. Regarding your U.S. or your foreign pipeline. 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?
Panama, we see a big impact of corona, we don't see any sale this year anymore of wind power project. In U.S., it depends very much on the next election. 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. We hope that the election will support us. Anyway, we are in a sales status of Chilocco and we plan that this will be sold this year.
Okay. Thank you. You still have the large wind parks, Jasna and [Malbergke], in the construction. Can you give us a little bit more light on what kind of milestone or service payments you aim for in this year or also next year?
It's in the lower one-digit million area per project.
Per project?
Yeah.
Okay. Thank you. And one last question. You successfully brought a 25-MW project through the tender in July. Will this project also be for the internal portfolio?
We think so. Yes.
Okay. All right. Only next year, so this shouldn't be finished this year, right?
Yes. It depends. This year we start, and this year we will get a financial effect due to that we think that we get a financial close this year and that we get our development payments. On the other side, the delivery times of wind turbines, we depend on that, and therefore we are sure that it's a project for next year.
Okay, perfect. Yeah, the very last question. You still have some 59 MW in phase II in Sweden. Is this also possible project right sales for this year or more in next years?
This is something, this is the next wave we are working on and it is not planned for this year or next year. We extend the pipeline. We will see what we can do. Let me say, one project is in a later stage and we think maybe that when the environment is good in Sweden that we sell it, but just right now, it is not in our planning in this year.
Okay. Thank you very much.
Thank you.
The next question is from Karsten von Blumenthal, First Berlin Equity 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 two new projects in Germany. Could you name these projects and give us the megawatt capacity?
Yeah. I'm always careful with the names because we have.
Okay, I can also live with just the megawatts.
We have more and more things in place where we have the people are against it and then do everything against it. I'm always careful a little bit. In the past we did it, nowadays there are professional groups on the road. We are talking about, just right now, the last project where we had a tender with Airport Ost, with 5.5 MW. This is only for your information, it's one of the biggest machines of the newest generation, with 158 m rotor height. It's 4.5 MW, one machine. The project is on time and will be finalized this year. We are working on a project with two machines in North Rhine-Westphalia, which is a project for more end of the year, beginning of next year.
In one project, two projects in Germany, in Schleswig-Holstein, which will be ready this year of around about 20 MW, 21 MW, yeah. We're depending a little bit of the wind turbine manufacturers, but we plan to finalize this year as well. Again, this is a question where we see just right now delays with the delivery of the wind turbine manufacturers, but nevertheless, that will not affect us in our EBIT guidance.
All right, thanks for that. In your report, there is also the Lentföhrden project mentioned by WKN. Could you give us the plant capacity of that project?
That's where I talked about 21 MW. One of them had been the project Lentföhrden with 8.4 MW. Two machines.
Okay, perfect. 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?
Yeah, that's why I spoke about this, in German called [Non-English content], which will be discussed today in the federal government. In this [Non-English content] , so invest speeding up law, they say, for example, that you have only a one-stage process, if you have any lawsuit, instead of three. They say 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 we have corona environment. This is something what causes us delays.
All right. If it goes through, there is some hope for next year that the market gets better. Given the bad market, you perform very well with the approvals you have received so far. 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 megawatt, how much could that be?
As I said before, 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 from the manufacturer, so therefore, it is not finally to say which projects and which megawatts we can add to the portfolio this year.
All right.
I'm sorry, but this doesn't matter in terms of the payments we plan, because of all these projects, we would like to do the financial close this year. Therefore we get our project development fees.
Okay, perfect. Thank you very much for taking my questions.
Thank you, Karsten.
We do have a follow-up question from Jan Bauer. Warburg Research line is now open again.
Hello again. It's just got one question out of the question from Karsten. You receive a project developer margin for projects you keep in your internal portfolio?
Exactly. Yes, this is the case.
How do you do that? Usually, when you activate an own build wind park in your balance sheet, you're only allowed to activate the material, the building costs. How do you do that?
He's mute. Yeah, you have to see the difference between the segment.
Okay.
The concern. In the segment, you can see that. In a concern, in a fully complete concern, you can't see that. You are right.
Okay.
Because if you don't sell it, you can't get the EBIT. Exactly.
Yeah, okay. That's in the end, like what we see in the consolidation of the group. We see the EBIT margin of a finished project in the EBIT of the segment, but in the consolidation.
Exactly.
We see the removal of the developer margin, right?
Exactly.
Okay, perfect. Thank you.
Thank you.
We haven't received any further questions, so I hand back to Mr. Lesser.
Thank you very much for your interest, and I wish you a fantastic and not too warm day. See you. Bye