Good morning, everyone, also from my side. Thank you for joining us today in this conference call on the results of of our company procedure for years. As usual, our slides that I will use can be found on our Investor Relations. And you can see we have tentative successes. We put projects into operation.
We started construction. In this respect, we're still working efficient even in corona times. If we look to the financial highlights, we can see we are fully on target worldwide quarter last year we had ever in the last 10 years. So that means if you look to the aviation work at approximately 38 percent. The guidance, we turn to 2022.
That has been taken into consideration in our guidance.
We
on next slide, we can see our own power generation. Most of the German projects, we will bring, which we will construct this year. And then view on the projects, which is not possible in the moment in this respect, but we think in that we're that works. We decided to step out of the Bulgaria and Hungary business due to the fact that peak in Germany, we have had to add it in the first phases. We still working on a bigger, much bigger pipeline, and we think in the next coming quarters, we will see a higher megawatt amount here in the first half.
We have positive operating results. The earnings driven by mainly by the general contractor and project development services for our wind farms and services provided to external wind farms from power generation and service and investments related to the expansion of power generations. So I already spoke about this. We are on a high level in EBITDA. We are the financial results are impacted by the valuation of interest rates minus €1,500,000 This is something related to our 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. And 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 SEK 4 point 8,000,000 with minus 7%. In services, we have we are on the same level as last year at SEK 1 point 1,000,000. In electricity generation, we had an increase of an EBITDA of 71 percent to EUR 7,100,000.
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 SEK 123,200,000.
We have a very solid equity ratio of 38%. The liability to banks are in an amount of SEK 133,800,000, which are mainly project financing, nonrecourse for project financing driven. And due to the fact that we have now 2 IFRS 16 leasing, we have now liabilities from leasing contracts, which leads to EUR 43,000,000 out of this. And in the current liabilities, we are in a range of EUR 20 €100,000 in this respect. All of or most of this, again, are project financing, nonrecourse project financing liabilities.
In scale up, we are still on track. We have we changed the wording in 2020 and further because we wrote instead of starting finalizing wind farm portfolio 2020, we now write start of extension 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 megawatts in own power generation portfolio in operation. Outlook for the financial year 2020.
First of all, the Annual General Meeting takes place on May 20, so next week, at the Virtual General Meeting due to corona crisis. So next week at this time, we will start with the AGM. So we are still having a high number of May order under construction. We're working on our pipeline and try to increase that. And if you look to the Phase III, so for the projects which are in the permitting stages, it takes us to be on a high level.
We still invest in our own portfolio and in our scale up strategy. And we still stick in the moment because we don't have other information due to the fact that we are considering 3 months prolongation and shifts in time and delivery times, we still stick with EBITDA of 15 to 20 megawatts 1,000,000, sorry, and EBIT of 5,000,000 to 10,000,000 Thank you very much. Now we start with Q and A.
And the first question is from Jan Bauer, Wabburg Research. Your line is now open. Please go ahead.
Hello, and thanks for the presentation. So I got first question is regarding the Polish project rights. So you still have like 19 megawatts in Phase 2. Have you any update on that, whether you may sell it this year as a project ride or keep it in the company?
In a moment, we are negotiating the wind turbine contract or finalized negotiation wind turbine for the first project. And we our target is to start with the construction with the first project, maybe with the second project this year. And we are in the same sale process of the first project. And we hope that we it's a target to get the 2nd project sold this year as well.
Okay. So 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?
Yes. We still see that this is always negotiation sometimes to do with personal contact. And this is really always a constraint, what we can see just right now. And we would but just right now, we are still in we started negotiations and it runs well for the first project.
For GOtvIN 3, you're still expecting a payment. So if you have any update on that?
Yes. So what we saw just recently, yesterday, there was a decision of the ministers of of the extent, the business and the build out of offshore in Germany from 15 to 20 megawatts. We will see if this becomes a law, then it is a support for our project in Atlantis 1. And we think furthermore that on the other side, where we still have EUR 5,000,000 to expect, we'll see what that means. It's more or less something for next year.
And related to Gotewind, it's something where we see and depending on the decision of Oersted when they start construction.
Okay. So in the Service business, you have like quite ambitious targets you want to reach in terms of EBIT generation in the next years. So can you give us a little bit more light on what's your target for this year only from the Service business?
Yes, related the Service Business 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. And this is affected a little bit. So it is in the range of maybe €500,000 EBIT, something like this. So but nevertheless, we see we are still on good path. In terms of EBIT, we are always affected by the investments we do.
And 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. And so therefore, I don't want to give any number on this.
Okay. So one last question. So you increased your staff on project development recently. So can you give us an idea? So you raised stuff to how to gain a higher project output in general?
Or what's the aim behind it?
Yes. We have different approaches. 1st of all, the markets, due to you see, due to our strategy, we have a wider product range. That means we need highly qualified person related to this. For example, we talk about additional power supply management.
This is absolutely we started with this for 3 years ago. We need special forces for that. And so you see, we have different new products, PV, for example. But then we are in new markets, Panama. So you see and we extend our business with hybrid, so PV, wind in combination with storage.
So that's where we need personal and we need highly trained and qualified project developers. So because of that, we have to extend our steps. And in especially in all markets, we see that there is a high competition to get highly trained staff. So therefore, we are happy that we are that people comes to us and want to support us. That's the bottleneck 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 Stephan, FMC Research. Your line is now open. Please go ahead.
Good morning all together. I have some further questions about your business development. In the Q1, you've achieved high margin in your project development business despite low external revenues. Maybe you can give us some details about your the profit ability in this segment?
Yes. It's always it depends on always if you do if you sell turnkey, if you do sell project rights, if you do construction management afterwards. If you sell projects, then project rights and afterwards, you construction management, you have different margins. And if we have payments, for example, if Babies is finalized, we get a fee for construction at the end. So 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 and opposite to project development fees and margins. And in this respect, we are depending all the time on when which payment is coming up and at which time we relate cost to that, yes? So this is 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, yes? So that's differs, yes.
Are there any contributions of internal generated profit? Or is this profit mainly external?
So the project development range is always external. So the project development range is always external. In most of the cases, external. So I have to say, internal is that what we relate to the project portfolio. So as you can as you know, if we would have sold it, we think about that we would have taken into consideration 37 1000000 as additional EBIT.
So this is not the case. And if you see our own portfolio, then we have an internal turnover.
And maybe you can give me an idea which part of this EUR 4,800,000 EBITDA is internal?
It's mainly driven in if you look to the consolidation overview, yes, then you see the consolidation amount. And this is where we deviate the internal margin, yes? So if you look at the segment
It's mainly belonging to this segment, the consolidation.
Yes. We have the turnover and the margins in the segments. And then comes the consolidation, which shows what is internal and what is external, yes. So from that, what I and that's why I'm saying so we had good results in the segment. But in total, the whole company results are lower due to the consolidation of internal margin.
Okay. Thanks.
Again, your financial results is burdened by cost of interest swaps. Which market development in the Q1 was responsible for this? And what effect can we expect for the next quarter?
So just right now, we are related to the swaps, we talk about SEK 3,700,000, which are related due to the fact that we have decreasing interest rates. And 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, it we have to consider it. And just right now, in this quarter, it had been EUR 1,500,000 due to the fact that we have decreasing interest rates in the market.
And so now you can expect what we will have in the next quarter. And if you know that you can say, okay, then we have an amount of €1,000,000 or €2,000,000 But in the moment, I'm not sure that we have further decreasing interest rates. But that is something we will see when due to the fact what is happening in the financial market, it may happen, yes. Okay.
You did sell projects in the Q1, but nevertheless, you reported an EBITDA of €6,400,000 and an EBIT of €2,300,000 You've 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. So 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 So we're expecting sales in different countries. So and that means we are depending on the development there. So therefore, we stick with this guidance, and we wouldn't say something in to the weight of on the lower end or higher end.
Okay. Thank you very much.
Thank you.
And the next question is from Paasen 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 3 wind farms are concluded. Are these 3 German projects? And could you tell us how many megawatts these 3 projects have altogether?
Yes, they are German projects. I can confirm. And the amount, as you can see it on Page 4, I think, in the project. No, it's not written here. You're right.
So it's when I see to the project pipeline, I think it's around 20, 25 megawatts, as I have in mind.
25 megawatts roughly. Yes. All right. That's great. Does that mean that you have the opportunity to participate in the June tender with these 3 projects?
No. We can't confirm that due to the fact that we have to consider. So we prepared these approvals, yes, final applications. And we and you have to see that we don't have the final permission in our hands. Just right now, we have we are in discussions.
We think that the next projects we want to go into tenders is something in the range of July or August. And then we think this 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. So I would 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 Megawatt in July August, this would still be a very good result of your project development work. I mean, you have already received 14 megawatts in awards this year and participating with another 25 mid of the year shows that despite this very, very difficult German market with these very slow approval processes, you get to hand quite well.
Yes. We see that the permission status is rather low in the moment, yes. So in February March, we saw that around according our estimation, around 50 megawatts each month had been permitted in Germany. So this is rather low. So and what we as you can see, we have a good pipeline in Germany.
We're still working hard on this to get step by step into the provision status.
Yes, agreed. In your report, you mentioned that you are winding up the business in Bulgaria and Hungary. And you mentioned the cost savings. Could you repeat that figure? Because I didn't get it.
Yes. That's €40,000 to €50,000 per year.
€40,000 to €50,000. And do you expect winding up costs, so one off costs you have to book? And do you
No, no, no. That's we are not expecting to that further cost will occur.
Okay. Perfect. Then you just save money fine. In the Services segment, you rightly mentioned that if you look at total output, you have increased your business. But when I look at purely external sales, that was a bit weaker than in the quarter of last year.
And you already elaborated on a bit more difficult business in some areas. So is that the reason why the external internal sales are a bit lower?
Yes, exactly. So we have one effect because of the training courses and because of you see, we get orders for rope trainings, for trainings for the elevators of a wind farm and wind turbines and so on. And so everybody now, as I said before, now shifted this kind of orders for 2 months, and now we start again. Since last week, we have the increasing order income in this respect, and that's why we have a slightly shift of the orders. And these are trainings and the orders we have related to the testing of blades and elevators are tested, which has to be done.
So therefore, we don't see that we can we 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. And the next question is from Laura Lopez, Alevia. 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 Q1. 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. So maybe how is that developing? And 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 plan will start construction in the 3rd Q4 this year. So 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 delivered turbines in place. So therefore, we do the construction management there only.
We are not affected by any delivery shifts. So therefore, there is no risk for us. But we don't see a big delivery shift in the moment. The delivery of in upcoming months and the next year, As I said before, we start construction of a lot of projects at the in the 3rd, Q4. And this looks as usual.
But 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. But just right now, as I said before, we are not affected at the moment. And for the next year, we see this when you see it in different markets, that differs a little bit. But in the moment, we hear the warnings, and we consider them in our plans and delivery plan and construction plans, but we don't have just write down something on a desk in this respect. Related to corona crisis, Bulgaria, Hungary, no, it has nothing to do with corona crisis.
It has something to do with what the governmental wants in respect to renewable and climate change and renewable energy increase. And since years, they do nothing to support this. And now we have we don't want to spend more costs on this. We don't have trust that these kind of this government will change anything. So and on the other side, corona, we are in 12 markets just right now, and we see that the action differs.
And but just right now, since Monday, our office in France runs again, not anymore. It's Home Office Day. So and our office in United States is still affected in this respect that they do home office. In Poland, they do home office and want to start very soon. So it differs from country to country.
In Turkey, it's home office, and they will stay in home office for minimum 2 weeks. And so 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.
Yes, then thank you very much for your interest. And we go ahead with our business. Thank