Good morning, everyone, also from my side. Thank you for joining us today in this conference call on the first nine months of the financial year of 2019. Before I start with the presentation, I would like to share with you an outline of the presentation and the procedure of today's call. I will start with an overview of the operational and strategic highlights of the first nine months, followed by an in-depth analysis of the nine months figures. After that, I will comment on our outlook for the remainder of the year before I will conclude my presentation with a brief update on the process of the ongoing voluntary public takeover offer by Morgan Stanley Infrastructure Partners for PNE AG. 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 in our company procedure for years. As usual, our slides that I will use can be found on our investor relations site website. Having said this, I would like to start with page three, where we have the highlights of the first nine months of this year. We see this is mainly driven by the sale of international projects. We see with 404 MW, which have been put into operation or started construction, we are on a very high level. You see 2018 with 130 MW is a very high level, mainly driven by the international projects. The biggest one is Jasna with 132 MW in Poland and Målarberget in Sweden with 113 MW, where we are working in the construction phase right now.
You see in the third quarter, the results, we didn't expect very good results because we are ongoing construction in these projects. Just right now, we have 331.7 MW under construction. Additionally, we sold one project where we would like an operation project, Papenrode, with 20.3 MW. We acquired this project due to the fact that we would like to make repowering in the next three to four years. In Germany, we have been successful in 10 with 37.5 MW, which is in these times where the permitting procedures are in delay in Germany, all over the market, you have heard it already or read it already, that we are on a very low level in terms of permissions, whereby for it is very clear that this is often not a no-go, it's a delay. We don't see any big impact on our pipeline in this country.
Our wind portfolio we work on as well. 95.7 MW Are in operation or under construction. Still, we are working on our scale-up project, where we talk about implementation of all the things we pointed out in our strategy approach until 2023. In Germany, we expand our PV business. Just right now, we have on early stage 170 megawatts in Germany roundabout and 170 megawatts in Romania. We would like to expand this business in other countries as well, like United States and Italy and France. In service businesses, we internationalize our business and strengthen with new projects and acquisitions of our business. Therefore, this all together leads to the financial results we see on page four, which is the total output, which had been increased to EUR 98.7 million, which is +71% in opposite to the last year.
The result of +81% of the EBITDA and +166% on EBIT, which are really improved results. The EBIT is at EUR 9.9 million, and we are on a still high level of a gross cash position, which is EUR 143.1 million, which still supports all activities we wanted to achieve. This all leads to a point, this I would like to say in the beginning, we still confirm the guidance of the fiscal year 2019, which we set, which is in EBITDA from EUR 25 million-EUR 30 million and then EBIT to EUR 15 million-EUR 20 million. If we look more into the details of the pipeline with onshore, we see that a lot of activities have happened in international businesses. In France, we finished a project. In Sweden, the project had been sold, Målarberget, which is, by the way, one of the biggest projects sold in this year in the Nordic countries.
In Poland, this project, Jastrzebie, with 162 MW, is the biggest project in Poland. We are just right now working on with 70 km of high voltage line and bigger substation. This shows what we can deliver. As well, we work on a project in Balice in Poland. In Panama, we stepped in, we acquired a pipeline, five projects, and in the U.S., we sold one project, Burleigh, which was mainly driven by the grid connection we sold, and this was a pure sale of project development in a mid stage. Remarkable is that we have an own power generation portfolio now at a level of 111.3 MW. This includes the wind farm portfolio projects, eventually 495 MW in operation, other wind farms, and this repowering project, Papenrode, and our biomass project, Silbitz.
Our pipeline is still at a level of 5 GW. If you look to the numbers of phase 3, which shows in which projects we are in a permitting procedure, we see that we have in Germany 302 MW and in France 232 MW, which is a high level of 534 MW in these countries. We hope that in Germany, in the short run, we get permissions out of this 302 MW. In the wind farm portfolio 2020, this continues, as I said, already 95.7 MW. The portfolio consists and 70.13 MW are in operation. Here we have to understand, Neuenwalde and Kittlitz projects of around 24.4 MW are under construction and will be ready end of November, beginning of December. We are in the last stage of construction.
Nevertheless, we have to say, as I said before, delays in Germany and permitting process can lead to delays. We would like to announce this on the early stage. Additionally, we see that the delivery of wind turbines in Germany can lead to later delivery times. In this moment, for me, this is an issue because the manufacturers now deliver to foreign countries and shortened the level of delivery in Germany. This is where we enter the negotiation. The earnings accrued in the wind farm portfolio amount to approximately EUR 28 million now, and it has increased. The power generation is at EUR 8.1 million. It's a little bit lower than in the nine months numbers of last year, mainly driven by one sale project of Gerdau-Schwienau. At that time, it was a one-time effect.
We have to consider, would we have been in the last year at around EUR 5 million for this. We are still on track with scale-up. We said we would like to have the first project pipeline in development. This year, we stepped into Panama, and we are the first new market. The first project in development. We are in much more projects in development, PV. We said we provide additional services. We acquired companies. We filed additional service and present them now to the market. Expansion of offshore development, we are working on in the U.S. and in other countries just right now to expand our business. Looking to the numbers, the operating results improved in the yearly comparison. As I said before, international project sales in Poland, milestone payments, and results from the power generation are the main drivers for this.
Remarkable is that the financial results, you see the last point, financial results burdened by higher interest expenses due to valuation of interest rate swaps, EUR 6.2 million. We have always to consider as soon as the projects related to the swaps are sold, the swaps will not longer be consolidated and a corresponding positive contribution to earnings will result. If we look to the business segments, in project development, increase of plus 70% roundabout and EBITDA plus 82%. In services, we have an increase of the output. Nevertheless, the decrease in EBITDA is mainly driven by the restructuring costs of the acquired companies. Electric generation, the decrease is to EUR 12 million, despite the increase of own generation portfolio. This is what I explained before. It's mainly driven by one sale before.
That's also impacted the EBITDA, and this year in the summertime, we had a lower wind year. Take into consideration the high liquidity. If you look to the balance sheet, we are in a good position. It's mainly an issue, which relates to the buildup of the portfolio. We have an equity change also mainly driven by the IFRS 16 consideration. Mainly, you see the non-current debt has increased and the liability is mainly driven by liabilities to banks related to non-recourse financing. As I said before, if we build up a portfolio, it is mainly the debt for the project financing. That's usual to increase the balance. Additionally, the increased sum of the balance sheet is again, outcome out of the IFRS 16 change.
Looking into the future, in the next quarter, as I said before, we will work further on the construction of the bigger projects. These kind of projects need a delivery time as our construction time, sometimes about one year because they're so big. We see that the project pipeline in Germany with 534 MW in phase three is full. We hope that we get, in the next couple of weeks, some of these permissions on our desk. When you see Germany, we hope that we get in the next couple of week two projects, Langstedt and Katzenstirn , with in a total of 26.1 MW, which we would like to go within the next tender. This depends on that we don't get a further delay in permission. We continue on build up our wind farm portfolio.
We are still in sales processes in projects in the U.K. and other countries, and we work on our Panama projects and the PV projects where we would like to go more internationally. We think we can go very fast into the next step of these early-stage projects. Additional services, we work very heavily on this to present some of them to the markets of these services and some consulting solutions as well. Again, we confirm the outlook of the financial year 2019 with an EBITDA of EUR 25 million-EUR 30 million and EBIT of EUR 15 million-EUR 20 million. Ladies and gentlemen, that brings me to the end of my presentation with the update on the process of the ongoing voluntary public takeover by Morgan Stanley Infrastructure Partners, short MSIP for PNE AG.
As you know, on October 10th, MSIP announced its intention to make a public takeover offer for PNE AG at a price of EUR 4 per share in cash. Following intensive talks, we, the board of management of PNE, with approval of the supervisory board, signed an investment agreement with Photon Management as the bidder. Photon is indirectly fully owned by MSIP. The offer price corresponds to an approximate 31% premium in relation to the unaffected share price on 26th August 2019 of EUR 3.5, the price before the publication of the ad hoc statement concerning the first confirmation of talks of PNE with MSIP. The offer values PNE with an equity value of approximately EUR 300 million. The offer will provide for a minimum acceptance threshold of 50% plus one share and further customary offer conditions. The acceptance threshold does not include the treasury shares of PNE.
Over the course of our talks, we have gotten to know MSIP as a highly professional and long-term partner. Their strong support for our long-term business model and in particular for our strategy scale-up, as well as for our employees and existing business units, have convinced us. In the investment agreement, MSIP expressed a strong commitment to this strategy and support it also in financial terms. Together with us, the board of management, MSIP wants to continue to implement and even accelerate this strategy. Not least, we welcome the offered attractive premium for our shareholders. Subject to a thorough assessment of the final offer documents, we support the offer by MSIP. Ladies and gentlemen, please allow me some remarks regarding the sequences over the last months. Neither the board of management nor the supervisory board actively invited offers to shareholders.
MSIP has made an offer to the shareholders of PNE. Prior to this offer, MSIP approached us concerning a potential offer to our shareholders. Safeguarding the interest of both the company and in particular of the shareholders and further stakeholders, the board of management and the supervisory board entered into a dialogue with MSIP in order to negotiate for as advantageous takeover offer as possible. By doing so, both the board of management and the supervisory board met their duties towards the company, the shareholders of PNE, and further stakeholders to the fullest extent. On the 26th 2019, PNE confirmed talks with MSIP about a potential takeover in an ad hoc release. We also asked for external support in this process from experts specialized in takeover situations.
Within this frame, the board of management and the supervisory board set up an orderly process, which included confidential talks with further potential prospective investors. The board of management tested the interest in a takeover bid among private equity companies that were named in press articles following the ad hoc release. Over all these talks did not result in offers competing with the offer by MSIP. Subject to this final statement in accordance with Section 27 Takeover Act by the board of management and the supervisory board on the offer document, we consider the offered purchase price of EUR 4 per PNE share, to our best knowledge, as adequate. We have to stress that the initial indication by MSIP was EUR 3.50. Only throughout the talks with PNE, the possible offer price range was increased to EUR 3.50-EUR 3.80 at the time.
After providing further value-adding information to the investor, the offer was most recently increased to EUR 4 per PNE share. Furthermore, we base our preliminary consideration of the adequacy of the price on the already conducted, but not yet finalized, analysis regarding the preparation of a fairness opinion performed by our external advisor. We will provide our final assessment of the adequacy of the offered price after careful review of the offer document in our statement in accordance with Section 27 Takeover Act. Where are we now in the takeover process? Meanwhile, the offer document of MSIP has been cleared with the authorities and made public on the bidder's website, www.photon-offer.com. All information, in particular on the technical aspects tendering shares, can be found there.
According to the rules quoting again Section 27 Takeover Act, we and the supervisory board will submit our final statement by mid-November following the current careful review of the offer document. Until then, I will not comment on the offer beyond my remarks that I just shared with you. I hope you understand. Ladies and gentlemen, this concludes my presentation. Thanks for your attention. We are now open for questions.
We've received the first question. It is from Laura Lopez of Baader Helvea. Your line is now open. Please go ahead.
Hi, good morning. I have a couple of questions. From the around 41 MW of projects which are under construction but have not been sold yet, do you expect this to happen in the fourth quarter? Will this be the trigger for PNE to accomplish the guidance in the year, or do you see any more drivers in the fourth quarter? A second question will be on the service business. When we look at it year-over-year, the margins have actually deteriorated. What is the reason for this? Are the recent acquisitions loss-making and that's having a negative dilution effect on the margin, or it's actually just higher investments for your internationalization strategy? I will ask two other afterwards.
First of all, we have just right now three projects under construction, Kittlitz, Neuenwalde, which are the projects where we think they will be ready very soon. These are projects for the project portfolio, then we have one bigger project with 16.8 MW, Wölsickendor , where we started already our construction and where we think we will be ready until end of the year. This project will affect certainly the guidance because we have one bigger EBIT to expect from this project.
Okay.
Related to the service, yes, we had to flip some internal calculations and internal personnel. We are just right now to get these things sorted in service so that we have a final, very strong service group. That means also that the headcount and the changes related to this. The overall head costs and all this stuff is now, it has to be sorted. We started with this in February, as you remember. On the other side, there are some effects in this. On the other side, we have higher investments in exactly what you said before, in taking over companies, structuring, restructuring costs and this depreciation. The restructuring costs are mainly driven by this. This is not a big issue. We think that the numbers will increase in future.
Okay, very good. Maybe actually just one more. Can you maybe explain again that what you mentioned about also some risks or some issues with wind turbine manufacturers with the delivery times? Can you explain that again? Is that something about that they are delivering more to the international market?
Yeah.
Recently, there were several announcements in Germany or by the government, I think around September, positive announcements, have you seen any slight progress in the approval process, or everything is exactly the same? Do you expect this to improve in the near future?
Related to this wind turbines, we have the situation that the manufacturers have a huge American market just right now, where they have to deliver related to the PTC tax issues. Now the big projects has to be delivered. Secondly, they lowered their delivery contingent for Germany. Therefore, with the Senvion, which is not anymore in the market, we see that there is a further step of lower delivery from wind turbines in Germany. Therefore, that is where now customers like to get wind turbines from other manufacturers, which are not planned. We are still in discussions and negotiations with manufacturers to secure them.
Related to approval situation in Germany, in politics, it's very clear that there is a structural problem in terms of permissions, mainly driven by changes in the law so that leads to one year longer times for studies, and this is now usually a one-time effect in this respect. Nevertheless, they want to change something in terms of permitting structure that should lead to lower slower, longer, shorter times for permissions and that these longer times will not occur anymore. We will see what is the outcome. Nevertheless, again, we have no projects in our pipeline where we see no-gos. These projects, this is always a matter of time. It's not a matter of go or not go.
Okay, perfect. Thank you very much.
Thank you.
Thank you. The next question is from Karsten von Blumenthal of First Berlin Equity Research. Please go ahead. Your line is now open.
Good morning, Markus. This is Karsten from First Berlin. Markus, you mentioned that the interest rate swaps resulted in a negative interest and similar expenses figure, and you said that this will be reversed when the project is completed. Do you expect a positive effect this year already, or will we see this next year?
No, this is mainly related to the project financing of our portfolio. When we sell projects, we then have no effect anymore. When we expect to sell them, then the reverse may happen, or will happen. Just right now, there is no effect to expect this year.
Understood. It is referring to your 2020 portfolio.
Exactly. Mainly driven by this because you want to secure the interest rates.
Of course.
A long time everybody thought the interest rates will increase, and now the interest rates went down. It's a balance effect, this is what we have to consider, which is when you sell the project, you have still the interest rate of your financing, there is no change to expect.
Yeah. Perfect. Understood. Then you mentioned that you bought the assets of the Papenrode project, 22.3 megawatt. So this is an old wind farm, which you would like to repower in coming years. The current capacity is 22.3 megawatt. Any idea what the repowered capacity could be? Is that roughly the same or could it be higher?
Yeah, first of all, it's not an old project, it's the best age, I would say. Secondly, we do a lot of measurements to improve the output of the already existing wind farm. If we do a repowering, then we think about as a range of megawatts we could take out of this. That depends on the permission structure. I will not say just right now how much megawatt it could be, because it depends all the time on the actual wind turbine in this year and that year when we would like to repower that.
Okay, for the time being, this project will then add to your electricity generation.
Exactly.
Okay, good. You mentioned your solar business and that your pipeline consists of roughly 170 MW in Germany and 170 MW in Romania. When do you think the first projects will be constructed out of that portfolio?
Yeah, we are at early stage in this kind of project and, but we think, we hope that in the next year, the first project, we can get something out. Nevertheless, the year after, we see a bigger amount of megawatts coming out of the PV business.
All right. Last question from my side. Your 2020 wind farm portfolio now has a capacity of 75.7 MW. For additional projects, you need approval, which, as we well know, is currently a very tedious, and frustrating procedure. From now, looking into the future, it looks to be rather challenging to achieve something like 200 MW at the end of 2020. What do you think could be a realistic total capacity for the portfolio, at the end of 2020?
Yeah, just right now, that is why I came up with this point in this moment, because we are one year and three months for the end of next year. The next projects we see are 26 MW, we would like to get in the next tender, which depends on that we get the next week. And, we think, we are still on a path that we think we come close to 200, but, to say how much it is, I cannot say. It depends all the time. We have 302 MW just right now in permission status, and a lot of them should have been permitted. And, depending on, then we have always the procedure for the tendering. Yeah. Therefore, I cannot say just right now, which will come up. But I think that is, you are absolutely right. I do not see the 200 MW really.
This is very challenging. Yeah. It becomes very challenging just right now. Due to delays in the permitting process and the delivery times of wind turbines, it's a real issue. You are absolutely right. I will come up with our prognosis in December, and then I will have a much better picture.
All right. Thank you very much for taking my questions.
Thank you.
Thank you.
The next question is from Holger Steffen of SMC Research. Please go ahead. Your line is now open.
Good morning, Holger Steffen speaking. I have an additional question about the development of the wind farm portfolio. Regarding the delays, is it possible that you will shift the sales process to the year 2021, or do you will sell a smaller portfolio next year? Is it preferred?
Yeah, in any case, as I said before, it's always an issue of delay, and these two options are there. I would like to come back to you on the next quarterly message, and we'll give you an outlook on this. Just right now, we are still in good hope that we get some permissions. We don't know how much, but you see the potential of 300 MW. This is huge, and we hope that some of these projects will come, and then we know much more at the end of the year where we are.
Okay. In former time, you planned to possibly add some France projects to the wind farm portfolio. Is this still an option?
Sorry, what did you say?
France projects for the wind farm portfolio.
No, we are working with our own portfolio and with our own projects. Projects, it may be that we sell the projects even when they are under construction, as we did in the last time. Projects, it might happen that we can negotiate that with projects which have permissions or in the tender were part of such a project pipeline as well. We sold already projects packaged in France, where we have had only project rights, and after permission, then we get our milestones. You can make this combination. This is possible. It depends all on that, what we think, when the permission will occur, when we get it. We can make our plan. Just right now, we are in a good hope, but we see that this target is very challenging.
In any case, to get it constructed, 200 MW, this is not really what we see.
Okay. In your report for the first nine months, you gave us only a few information about the development of your pipeline in France. Maybe can you give us an outlook when the next project in France could be ready for sale?
For sale, yeah. We already sold projects in France. This year we got our milestone payments to La Perrière, which was one project with project France. Further projects are, we have the packages where we get milestones payment. When we get the next projects in France, this depends, again, on the permission process, where we have usually one year to extend, because around about 90% of the projects in France will be sued and land in the front of court. Usually, if you made it proper work, you get right and you can go ahead with the construction. Just right now, I can't give you the number in that, because out of these 230 megawatts, there are some projects where we think they will come up in a short time.
Then just right now, we would like to have a portfolio, for example, for German projects, and we don't intend in the moment that we put French projects in that. That is exactly the issue, what we would like to discuss when we have more overview about the permission status in these countries.
Okay. The U.S. project, Chilocco, should be ready for sale this year. Maybe could you give us an update about the process?
Yeah, Chilocco, we have the situation that we restructured the project. Even if it is now at 166 MW, this is a higher output to expect there to lower the LCOE and being competitive with the prices on the energy market there. We hired a new advisor for sales, and we are just in the process, again, I have to say, to proceed. Additionally, there's some issues around the grid connection, and I have to consider this as well. Grid connection where the local utility is working on extension of the transformer stations, and such issues will affect the sales status as well. This is something which is just right now in consideration in the discussion.
Okay. You can't say if you will manage to sell the project this year?
I'm not sure if it gets sold this year, but nevertheless, that changes nothing on the guidance.
Okay. In your report, you've mentioned four projects which were successful in the German tender this year. I think I found five projects, Kleinwölfersheim, Schlenzer, Neuenwalde, Bösickendorf, and Gebstedt. Can you explain me my mistake?
Schlenzer I have not here on my list. I think Schlenzer was in last year, but I'm not sure to be honest. On my list, Schlenzer was at the end of last year, but I'm not sure to be honest.
Oh, okay.
The rest is fine. The rest is right.
Okay. Can you give us some more details about the project Gebstedt in Germany, which were successful in September, I think?
This is Villstedt 8.8 MW. This is a project where we're working just right now on this project to start construction. Exactly. Next year, it will be a part of the portfolio in the future. Next year, we will start construction.
I didn't understand the megawatts figure.
8.8 MW for Villstedt it was called.
Okay. My last question, perhaps, some information about Kleinwöllersheim, which won a tender in February. I didn't see an update to this project.
This project is a project which has some difficulties in the permitting requirements. We have to solve some of these issues, and there we are working heavily on, but we think this is a project for next year as well, where we would like to step through.
Okay, perfect. Thank you.
Thank you. At the moment, there are no further questions, so I would hand back to you.
Yeah. Thank you very much to attend this call, and I wish you a good day.