Good morning everyone, also from my side. Thank you for joining us today in this conference call on the results of our company procedure for years. As usual, our slides that I will use can be found on our investor relations. You can see we have standard successes. We put projects into operation. We started construction. In this respect, we're still working efficiently even in COVID times. If we look to the financial highlights, we can see we are fully on target worldwide. The [best] quarter last year we had ever in the last 10 years. That means if you look to the EBITDA, we were at approximately 38%. The guidance into 2022. That has been taken into consideration in our guidance. Next slide, we can see our own power generation.
Most of the German projects, which we will construct this year and then view on the project which is not possible in the moment in this respect. We decided to step out of the Bulgaria and Hungary business due to the fact that PV in Germany, we have had to add it in the first phases. We are still working on a much bigger pipeline, and we think in the next coming quarters, we will see a higher megawatt amount here in the first stages. We have positive operating results, the earnings driven mainly by the general contractor and project development services for own wind farms and services provided to external wind farms from power generation and service and investment related to the expansion of power generations. I already spoke about this. We are on a high level in EBITDA.
The financial results are impacted by the valuation of interest swaps, EUR -1.5 million. This is something related to secure our results and our interest rates. If you look to the next page, you can see that due to the consolidation, it cannot be shown how strong the segments are increasing. This is what we can see now and can show now, that we have strong results in each segment. If we run through project development, the EBITDA decreases only slightly in opposite to the last year to EUR 4.8 million with -7%. In Services, we are on the same level as last year, at EUR 1.1 million. In Electricity Generation, we had an increase in EBITDA of 71% to EUR 7.1 million. That shows that we are related to segments still on plan. Balance sheet remains rock solid. That is the main headline, and that's right.
We have a big cash position of EUR 123.2 million. We have a very solid equity ratio of 38%. Liability to banks are in an amount of EUR 133.8 million, which are mainly project financing, non-recourse for project financing driven. Due to the fact that we have now IFRS 16 leasing, we have now liabilities from leasing contracts, which leads to EUR 43 million out of this. In the current liabilities, we are on a range of EUR 20.1 million in this respect. Most of this, again, are project financing, non-recourse project financing liabilities. In Scale Up, we are still on track. We changed the wording in 2020 and further because we wrote instead of finalizing wind farm portfolio 2020, we now write start of expansion of own generation power portfolio due to the extension of our strategy in this respect.
The ongoing expansion of our own generation power portfolio for the further years is also changed in this respect. Target is to have 2023, 500 MW in own power generation portfolio in operation. Outlook for the financial year 2020. First of all, the Annual General Meeting takes place on May 20th, next week, as a virtual general meeting due to corona crisis. Next week at this time, we will start with the AGM. We are still having a high number of megawatts under construction. We're working on our pipeline and try to increase that. If you look to the phase III, for the projects which are in the permitting stages, we are on a high level. We still invest in our own portfolio and in our scale-out strategy.
We still stick in the moment, because we don't have other information, due to the fact that we are considering three months prolongation and shifts in delivery times, we still stick with EBITDA of EUR 15 million-EUR 20 million and EBIT of EUR 5 million-EUR 10 million. Thank you very much. Now we start with Q&A.
The first question is from Jan Bauer, Warburg Research. Your line is now open. Please go ahead.
Hello, thanks for the presentation. I got first question is regarding the Polish project rights. You still have 19 MW in phase II. Have you any update on that, whether you may sell it this year as a project right or keep it in the company?
Yeah, in the moment, we are in negotiation for wind turbine contract or finalized negotiation wind turbine contract for the first project. Our target is to start with the construction with the first project, maybe with the second project this year. We are in the sale process. In the sale process of the first project, and we hope that it's a target to get the second project sold this year as well.
Okay. We can still assume that you will be able to sell those projects and that there won't be any delay from coronavirus to 2021?
Yeah, we still see that this is always, negotiation has sometimes to do with personnel contact, and this is really always a constraint, what we can see just right now. Just right now, we started negotiations, and it runs well.
Okay, perfect.
For the first project.
Okay. For Gode Wind 3, you're still expecting a payment, so if you have any update on that?
Yeah, what we saw just recently, yesterday, there was a decision of the ministers of our six northern countries to extend the business and the build out of offshore in Germany from 15 MW to 20 MW. We will see if this becomes a law, then it is a support for our project in Atlantis I. We think furthermore that on the other side, where we still have EUR 5 million to expect, we will see what that means. It's more or less something for next year. Related to Gode Wind, it's something where we see and depending on the decision of Ørsted when they start their construction.
Okay. In the service business, you have quite ambitious targets you want to reach in terms of EBIT generation in the next years. Can you give us a little bit more light on what's your target for this year, only from the Service business?
Yeah. The Service business is one business which is in some areas affected by corona due to the fact that we have trainings for personnel, in terms of rope testing and other training courses. This is affected a little bit. It is in the range of maybe EUR 500,000 EBIT, something like this. Nevertheless, we see we are still on good path in terms of EBIT. We are always affected by the investments we do. This is the reasons why when we see good targets, we are going to invest. That's why I don't want to give any EBIT targets just right now for each segment, because we think we are still in the phase of investing. Therefore, I don't want to give any number on this.
Okay. One last question. You increased your staff on project development recently. Can you give us an idea? You raised staff to gain a higher project output in general, or what's the aim behind it?
Yeah. We have different approaches. First of all, the markets, you see due to our strategy, we have a wider product range. That means we need highly qualified personnel related to this. For example, we talk about additional power supply management. We started with this three years ago. We need special forces for that. You see we have different new products, PV, for example, we are in new markets, Panama. You see, and we extend our business with hybrid, so PV, wind, in combination with storage. That's where we need personnel and we need highly trained and qualified project developers. Because of that, we have to extend our staff. Especially in all markets, we see that there is a high competition to get highly trained staff. Therefore, we are happy that people come to us and want to support us.
The bottleneck is usually the staff, and therefore, we are in good mood that we can extend our pipeline in this respect as well.
Okay. Thank you.
The next question is from Holger Steffen, SMC Research. Your line is now open. Please go ahead.
Good morning, all together. I have some further questions about your business development. In the first quarter, you've achieved a high margin in your project development business, despite low external revenues. Maybe you can give us some details about the profitability in this segment.
Yeah, it depends on always if you sell turnkey, if you sell project rights, if you do construction management afterwards. If you sell project, then project rights, and afterwards you do construction management, you have different margins. Yeah. If we have payments, for example, if Barwice is finalized, we get a fee for the construction at the end. You see, it depends on which case is coming up. That's why we extended our pipeline overview to a column which is known as sold or under construction, to give you an overview where we have construction management margins to expect, which are lower in opposite to project development fees and margins. In this respect, we are depending all the time on one, which payment is coming up and at which time we relate costs to that. Yeah.
Sometimes we have project development, project rights, to sell and we get the first payment, then we have all costs under control, and in the last payment, you get the margin. Yeah. That differs. Yeah.
Are there any contributions of internal generated profit, or is this profit mainly external?
The project development range is always external. In the most of the cases, external. I have to say internal, is that what we relate to the project portfolio. As you know, if we would have sold it, we think about that we would have taken into consideration EUR 37.1 million as additional EBIT. This is not the case. If you see our own portfolio, then we have an internal turnover entry.
Maybe you can give me an idea which part of this EUR 4.8 million EBITDA is internal?
It's mainly driven in, if you look to the consolidation overview, yeah, you see the consolidation amount. This is where we deviate the internal margin. Yeah.
if you look at the segment.
It's mainly belonging to this segment. The consolidation?
Yeah. We have the turnover and the margins in the segments, and then comes the consolidation, which shows what is internal and what is external. From that's why I'm saying, we had a good result in the segment, but in total, the whole company results are lower due to the consolidation.
Okay.
Of internal margin.
Okay, thanks. Again, your financial result is burdened by cost of interest swaps. Which market development in the first quarter was responsible for this, and what effect can we expect for the next quarter?
Just right now, related to the swaps, we talk about EUR 3.7 million, which are related due to the fact that we have decreasing interest rates. To secure increasing interest rate, we do the swaps. When we sell the project, it comes up. If we take it and held it on board, we have to consider it. Just right now in this quarter, it had been EUR -1.5 million due to the fact that we have decreasing interest rates in the market.
Okay.
Now you can expect what we will have in the next quarter. If you know that here, you can say, okay, then we have an amount of EUR 1 million or EUR 2 million . In the moment, I'm not sure that we have further decreasing interest rates, but that is something we will see. Due to the fact what is happening in the financial market, it may happen. Yeah.
Okay. You didn't sell projects in the first quarter, but nevertheless, you reported an EBITDA of EUR 6.4 million and an EBIT of EUR 2.3 million. You mentioned it that these are very strong results. Therefore, your guidance seems to be very conservative. Do you think we can see your range as a minimum for this year now?
I have heard such questions several times, as you can imagine. We don't know what is really happening in this little bit insecure environment. I think it would be wrong to make a statement like this to EBIT and EBITDA. We're expecting sales in different countries. That means we are depending on the development there. Therefore, we stick with this guidance, and we wouldn't say something to the weight on the lower end or higher end.
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. Congratulations to the good Q1 results. In the report and in your presentation, you mentioned the preparation for approval application for three wind farms are concluded. Are these three German projects, and could you tell us how many megawatts these three projects have altogether?
Yes, they are German projects. That I can confirm. The amount is, you can see it on page four, I think, in the project. One moment please. No, it's not written here. You are right. When I see to the project pipeline, I think it's around 20 MW, 25 MW, if I have in mind, yeah.
25 MW, roughly?
Yeah.
All right. That's great. Does that mean that you have the opportunity to participate in the June tender with these three projects?
No, we can't confirm that due to the fact that we have to consider. We prepared these approvals, final applications. You have to see that we don't have the final permission in our hands. Just right now, we are in discussions. We think that the next projects we want to go in the tenders is something in the range of July or August. Then we think the first projects we can put into the tender due to the fact that we have to finalize the permission in itself. We have a permission, but we are not safe with some of them and due to the fact that we have to consider the long-term response time of the commission authority. I wouldn't say that we are ready in June. I think we prepare ourselves for July, August, in this respect, and then we will see.
But with 25 MW in July, August, this would still be a very good result of your project development work. You have already received 14 MW in awards this year, and participating with another 25 MW in middle of the year shows that despite this very, very difficult German market, with these very slow approval processes, you get ahead quite well.
Yeah, we see that the permission status is rather low in the moment. In February and March, we saw that around, according our estimation, around 50 MW each month had been permitted in Germany. This is rather low. As you can see, we have a good pipeline in Germany and we're still working hard on this to get them step by step into the permission status.
Yeah, agreed. In your report, you mentioned that you are winding up the business in Bulgaria and Hungary. You mentioned the cost savings. Could you repeat that figure because I didn't get it?
Yeah. It's EUR 40,000-EUR 50,000 per year.
EUR 40,000-EUR 50,000. Do you expect winding up costs, so one-off costs you have to book?
No. We are not expecting that further costs will occur.
Okay. Perfect. You just save money. Fine. In the service segment, you rightly mentioned that if you look at total output, you have increased your business. When I look at purely external sales, that was a bit weaker than in the quarter of last year. You already elaborated on a bit more difficult business in some areas. Is that the reason why the internal sales are a bit lower?
Yes, exactly. We have one effect because of the training courses. You see we get orders for ropes, rope trainings, for trainings for the elevators of a wind farm and wind turbines. Everybody now, as I said before, shifted these kind of orders for two months, and now we start again. Since last week, we have an increasing order income in this respect, and that's why we have a slightly shift of the orders. These are trainings and the orders we have related to the testing of blades and elevators are tested, which has to be done. Therefore, we don't think that we will still get all orders during the year.
All right. Understood. Perfect. That's it from my side. I thank you very much for answering my questions.
Thank you.
There are currently no further questions. As a reminder, if you would like to ask a question, please press zero and one on your telephone keypad now. The next question is from Laura Lopez at Baader Helvea. Your line is now open. Please go ahead.
Thank you very much. Good morning. I have a couple of questions. Your material costs are rather low in the first quarter. I can imagine this is also part of some delays in the construction market. Can you maybe also elaborate a little bit how the supply chain is developing? I think in the full year conference call, that was also mentioned as a risk. It's not only the permits, but also the general supply chain being pushed back a little bit. Maybe how is that developing? Then maybe coming back to Bulgaria and Hungary, you did mention the unfavorable market conditions in those markets. Did this actually accelerated with the current COVID situation, and do you see a risk for other regions where you might be active at the moment for something like that as well to happen?
Okay. First of all, the delivery situation. Mainly our projects we planned will start construction in the third and fourth quarter this year. That's why we are not that much affected on delivery issues which are happening just right now. In Poland and Sweden, we have already the wind turbines in place, therefore, we do the construction management there only. We are not affected by any delivery shifts. Therefore, there is no risk for us. We don't see a big delivery shift in the moment.
The delivery in the upcoming months, in the next year, as I said before, we start construction of a lot of projects in the third, fourth quarter, and this looks as usual. We see that there are a lot of warnings from manufacturers that they say, "Okay, we don't have an overview about the situation of deliveries out of China, and it might cause delays." Just right now, as I said before, we are not affected at the moment. For the next year, when you see it in different markets, that differs a little bit. In the moment we hear the warnings and we consider them in our plans and delivery plan and construction plans. We don't have just right now something on the desk in this respect. Related to corona crisis, Bulgaria, Hungary. No, it has nothing to do with corona crisis.
It has something to do what the government wants in respect to renewable and climate change and renewable energy increase. Since years, they do nothing to support this. Now we don't want to spend more costs on this. We don't have trust that this government will change anything. On the other side, corona, we are in 12 markets just right now, and we see that the action differs. Just right now, since Monday, our office in France runs again, not anymore it's home office. Our office in U.S. is still affected in this respect that they do home office. In Poland, they do home office and want to start very soon. It differs from country to country. In Turkey, it's home office, and they will stay in home office for minimum two weeks.
It differs from country to country, but we are mainly driven by, we can work home and can do a good home office. We have the instrument, the tools and everything in our hands, and we see that we are in good shape to do this business as well in home office for a recent time.
Great. Thank you.
Thank you.
There are currently no further questions, so I hand back to the speaker for closing remarks.
Thank you very much for your interest, and we go ahead with our business.