Dear ladies and gentlemen, welcome to the analyst conference call of PNE Wind AG. At our customer's request, this conference will be recorded. As a reminder, all participants will be in a listen-only mode. After the presentation, there will be an opportunity to ask questions. If any participant has difficulty hearing the conference, please press star key followed by zero on your telephone for operator assistance. May I now hand you over to Markus Lesser, CEO of PNE Wind AG, who will lead you through this conference. Please go ahead, sir.
Good morning. I would like to give you an overview about our operational highlights in 2017. First of all, and later on to the financial highlights, and give you a complete overview about 2017. In all areas, we had successes in the onshore business, in the offshore business, as well as in our wind farm portfolio sales. We filed a new strategy Scale up in November. Starting with the successes in onshore business, we completed or started construction of 233.6 megawatts of projects, and we did it national, but as well internationally, in the U.S., France and Sweden, and in Germany, of course. We had a successful tender in Turkey, about 70 megawatts. In offshore, we sold our project, Atlantis I, to Vattenfall. One project, Gode Wind 3, joined successful in the first German tender, which shows the project quality of PNE Wind.
The significant earnings and cash inflow we had about in the business of wind farm portfolio 2016. We could do a refinancing and got an out-payment of around EUR 21 million, and we sold the remaining 20% stake to Allianz for EUR 23 million. We could build up our new wind farm portfolio 2020, partly with our wind farm, Hohe See asset, which we could complete. It had been around 43 megawatts and is still in operation and in our ownership. Looking to the financial highlights in 2017, we see that we could exceed our initial forecast, and we gave an increased guidance of EUR 17 million to EUR 23 million. The EBIT of EUR 23.1 million was the final outcome, which really satisfied. The earnings had been driven by the project sales, as I mentioned before, especially the portfolio earn-out.
What you can see, because of this 142-megawatt portfolio sale, we could increase our EBIT and could get additional earn-outs, which we fought for, and we could get finally. That means that we could get a strong financial basis end of last year. We have a very high gross cash position of about EUR 194 million. We are net cash positive with EUR 14.1 million. This EUR 194 million gives us the complete basis for our strategy to take all measurements to be successful in that and to pay back our bond of EUR 100 million, which we have to do in June. The refinancing process is on track. The first phase with equity financing of around EUR 25 million is already secured with IKB Bank, and additional measurements and negotiations we are working on, and we think in the next couple of weeks, you will get news on that.
The dividend of EUR 0.04 per share are proposed. Yesterday we got the good news that the corporate rating of BBB will be with a positive outlook. Formerly, it was with a stable outlook. Last but not least, the guidance for the financial year 2018, we see an EBIT of EUR 10 million-EUR 16 million for this year and an EBITDA of EUR 20 million-EUR 26 million. This is remarkable if you think about that we also do investments to increase our business and follow up on our strategy. You see the onshore business in overview. We are still working on 4.7 GW. When you see the last year, the U.S. wind farm, Vivaldi, was sold. We sold the project rights to Better Energy. The commissioning is expected in 2018.
Additionally, a next international project we could sell to a German investment group, the Swedish wind farm, Laxåskogen, with 25 MW. Very remarkable, strong momentum in France with projects Sommette-Eaucourt , which was completed, Sommet Saint-Lars, which was sold to John Laing and is in preparation. The wind farm Longèves could be completed and was sold together with the project Riaucourt to Quaero Capital . We see also, as I mentioned already, that the wind farm Kührstedt-Alfstedt was completed. We started already with our 200 MW portfolio. The Turkish tender, we joined with our wind farm, Köseler, and we could get the pre-license, which was a big success in Turkey. By the way, only an information for these days, we joined recently the German tender, with the 14 MW, the part of a project. We have been successful as well.
In total, we have 69 MW of own wind farms currently in operation. Some of these wind farms are in preparation for repowering. In the offshore business, we could sell Atlantis I to Vattenfall. We got round about EUR 25 million, whereby around EUR 7 million had to be paid to the former owner, BARD. We expect further milestones in the future. The next tender in the next round, we will see, but we are in good hope that Vattenfall will join it. Gode Wind 3, as I mentioned already, we have been successful in the first tender. We are still a service provider for DONG Energy and for Vattenfall. The next milestone payments are expected. The next would be for Borkum Riffgrund 2, because the construction of Borkum Riffgrund started. The next then would be Gode Wind 3 and 4 with around EUR 20 million.
The constitutional complaint, because of the change of the WindSeeG, is still ongoing, nothing new on this in the moment. If we look to the financial highlights and the income statement, you see that we got our EBIT of EUR 23 million, which is the upper side of our guidance and was mainly driven by the portfolio deal and our successful sales of Atlantis I and the international projects. If you see, this means that we have a very positive net income of EUR 71 million at the end and an EPS of EUR 0.22 per share. Related to the balance sheet, as I mentioned before, the most remarkable point is that we are in a very good shape regarding our liquidity position. The cash position of EUR 194 million is remarkable. Additionally, will help us in paying back our bond and follow up on our strategy.
Last year, we had been on a level of EUR 147 million. Looking to the liabilities, there we can see the bond in end of May 2018, we have to repay that. It's now in current liabilities. Formerly, it was in non-current debt. On the other side, we see liability to banks, which are mainly non-recourse project financing liabilities related to our projects which are under construction or, like Kührstedt, already in operation. There are some changes in the market and some changes we will follow up. As I already showed on the capital market date last year in November, we want to be and develop ourselves in a clean energy solution providers due to some reasons. One reason is we want to be not that volatile anymore with our earnings. Secondly, we want to increase our EBIT up to 50% until 2023.
We could see that the market changes, so that's why we are looking more and more in the direction of additional technologies, so PV, storage, power-to-gas, so that we have the full value chain and could present to the market all what the market needs. Secondly, we want to look how we can improve that what we get out when we produce renewable energy. If it is gas, heat, or whatever, or pure energy, we would like to have an overview, and that's why we follow up that carefully with our smart energy supply management. We will have a look to emerging markets because the need is very high in these kinds of markets for solutions of their energy needs. Last but not least, we would like to give solutions in terms of consulting business.
We would like to present the market financial solutions, as well as services, as well as repowering projects. This is something where we would like to invest also, maybe if we find a target to purchase. The program around this we call Scale Up. We have a plan and milestones, and the 2017 milestones have been to start the phase looking for the right people, follow up on a team. We implemented an office in Hamburg. That was one target. We wanted to finalize the first project for the 200-megawatt portfolio. This year, 2018, we would like to have the first project and services available, and would like to have the first revenues around it. If you look to the outlook related to onshore wind power, we see that we have the wind farm Gerdau-Schwienau, which is in the moment in operation.
We went successfully through the tender, and this is something we would like to do some repowering measurements. We continue to build up the wind farm portfolio 2020, and we furthermore working on projects like Chilocco in the United States with around 200 megawatts, where we would like to finalize the sales process. Additionally, we saw and see that some French projects are coming up very soon. Furthermore, we are looking for new markets in Asia or Latin America in the onshore business. In offshore wind power, we doing our job as consultants, as well as we explore new markets. Around 5 gigawatts, we did unsolicited bids in the eastern coast of the United States, and we're working on these kinds of projects. We would furthermore pull up on our strategy. We are looking to get new products on board.
We want to finalize refinancing, and we looking for opportunities for inorganic growth and corporations. The outlook for the year 2018, around EUR 10 million-EUR 16 million EBIT and EBITDA EUR 20 million-EUR 26 million, as I mentioned before. Thank you very much, and I'm prepared now for questions.
Dear ladies and gentlemen, we will now begin our question and answer session. If you have a question for a speaker, please dial 01 on your telephone keypad now to enter the queue. Once your name has been announced, you can ask a question. If you find your question is answered before it is your turn to speak, you can dial zero two to cancel your question. If you are using speaker equipment today, please lift the handset before making a selection. One moment please for the first question. The first question is from Karsten von Blumenthal. Your line is now open.
Good morning, Markus. Congratulations to the very good year, much better than I initially expected. Currently, the French market is very attractive, and I have seen from your project pipeline that your phase 3 projects in France are a bit higher than in Germany, so you are very well situated there. My question is, in two years' time, do you see your French pipeline being even higher than today? That would be my first question.
Yeah, I can answer this first question with a clear yes.
Perfect. Is that enormous increase in overall project pipeline, or where do you see it in two years' time?
It's our target to increase our project pipeline in any case. It's always the same in very competitive countries like Germany, France, and others. You have to look for quality projects and not to take projects only because they are projects on board. Therefore, it's very clearly our strategy to increase it.
All right. In your report, you mentioned that in Poland, you see chances of PPAs without subsidies. That is a new, very positive development. Perhaps you could elaborate on that. I recently read that Poland wants to go offshore. Do you also see opportunities in the Polish offshore market for your company?
First of all, because we looked very carefully to Poland and to the offshore and onshore Poland business. We see that in the onshore business, there are offers in the market for PPAs. Therefore, it's something which is very substantial. Secondly, in the offshore business, we look carefully to that and we saw that the cooperation and partners which are there, around three or four projects, which are related to grid connection in the north. For us, it was not a market where we would like to step in.
All right. Regarding the onshore Polish business, do you see any chances of selling your projects this year on a pure PPA basis?
We try to.
Okay. Good luck with that.
Let's say it like that.
In the report, you mentioned. Yeah, sorry.
It must make sense. Only to make sure that we understand also, I think there's a pressure from the European Commission, and government related to the winter package, to Poland. If you look to the market in itself, you have the most potential of all markets because they have 90% coal energy production or coal-related energy production. Therefore, there we see advantage to step in this business.
All right. I hope the Polish government will be with you there. You mentioned in the report the Wangerland project with 34 megawatts, where you will offer comprehensive services. Is that your own project or is it a project from someone else? Could you elaborate on these comprehensive services?
Yeah. If you have wind farms, which are made by private persons, it was the first time that we did something like that we did a kind of consulting business. This is a business which we also want to work on as a kind of our services business. In this case, we negotiated contracts and worked on the construction services. It was the first try to do this, and we have been successful, and it's another way to work on projects.
That is not your own project. You did it for someone else and.
Yes, exactly.
Okay. Sounds good. My last question would be, as far as I understand, you hardly paid any taxes in 2017, despite your substantial EBT, profit before taxes. Could you roughly explain why?
Sorry, can you repeat the question for a moment? I couldn't hear.
You hardly paid any taxes.
Yeah
last year. Why was that?
Yeah. I think this is the structure of the deals. Usually, it was mainly driven by the portfolio sale earn-out. For example, in the earn-out, we pay the usual fee, and this was the outcome. The second thing was that we usually sell shares. Yeah, we have shares.
Which have an attractive tax situation.
Yeah. I understand. Okay. Great. Yeah. Thank you very much for taking my questions, Markus.
Yeah. Thank you.
The next question is from Holger Steffen, SMC Research. Your line is now open.
Good morning. I have only a few additional questions. Maybe we take a look on your onshore pipeline. You have mentioned two projects at stage 4 in Germany and France with 10 MW. Could you tell us something about these projects and in general about possible project sales in 2018, which are included in your guidance?
We have one project in France. This is a 10 MW project. This is our project, Saint Martin l'Ars, which is under construction. In Germany, we have a project which is done by our WKN, which is under construction as well. The future business we see, and you will see the increased phase 3 level, that we prepare ourselves, as I already said to Karsten, that we want to increase our French portfolio, where we see that the tender conditions in the moment are better than in Germany. Nevertheless, also in Germany, we see that the price level of the tariff increased in the last tender, and this is exactly the point where we waited for, where it gives us the opportunity to step in with further projects. We will step in with further projects in the next tenders in Germany this year, and we will start construction.
Okay. The level of EUR 47 per MWh, you are fine with it, or?
Yeah. We have to consider that the tariff of EUR 0.047 is a tariff for 100% wind yield project. That means project with less wind get a more attractive tariff. The main projects are somewhere between 70%-85%, and then you are somewhere between EUR 0.05 and EUR 0.055. This is an attractive amount, due to the fact that, on all levels, the prices went down, and that we get new machines and machine types in the future.
Mm-hmm. Okay. Thank you. You have already mentioned that you want to finish Chilocco sale process near time. Can you give us some details which work is still to do?
We are in the middle of the process due to the fact that Trump made a tax decision which changed the tax situation in the U.S. We had to step back and try again with the investors, and rework this project in terms of the sales process. This is why we are not in a-- I cannot tell you now that we have finished our sale. But we are very far in the progress.
You have included this sale in your guidance for 2018?
Yes.
In your annual report, you have mentioned possible offshore projects in the U.S.A. You intend to rent five areas in the first step. Maybe you can give us some details about further steps and the possible timeline of U.S. offshore business.
First of all, I have to say, these are unsolicited bids. These kind of bids means that we are in a pre-qualification situation, and that we have to tender on the project areas end of the year. We expect that this tender will start. We prepare ourselves and have a deep look to the projects, and we will see if the final outcome is like that we think that these kind of projects are interesting for us. The final decision will be made, I think, in the first quarter.
Okay. Maybe we switch to Turkey. You've bought back the share of STEAG in the Turkish projects. Maybe you can give us some background information about this transaction.
Yeah. There had been some uncertainties related to the situation, if STEAG want to bid or not to bid. We clarified the situation, in that case, so we purchased these projects back. We went into the bid. That's the whole background of the project.
You will still work together with STEAG in other projects?
Yeah, we are still in a good mood and in a cooperation partnership, but at the moment we have no projects together.
Okay. My last question. Actually, you run a wind farm portfolio of 69 megawatts. Which production and which revenue do you expect in 2018 and have included this in your guidance?
In 2018. In the moment I can't give you the complete number. Take a look to the numbers we had last year. In 2017, we are around EUR eight million. I think this will increase. At the moment I can't say more.
Okay. Thank you very much.
As a reminder, if you would like to ask a question, please press zero one on your telephone keypad now. At the moment, there are no further questions.
Okay. Thank you and goodbye.
Ladies and gentlemen, thank you for your attendance. This call has been concluded. You may disconnect.