Hi everyone and welcome to Cloudberry Clean Energy's fourth quarter 2024 presentation. My name is Anders Lenborg and I'm joined by our CFO Ole-Kristofer Bragnes and we will go through a presentation and please use the Q & A button to post your questions and we will after presentation try to answer as many as possible. But before we get there I will take you through the highlights and an introduction to Cloudberry before Ole-Kristofer takes you through the key financials and we will also finish with some comments on the market and price curve going forward.
The highlights for last quarter, I think.
The main.
The main highlights is connected to our increase in production. We have managed to increase our production portfolio with more than 160 GWh in production in Denmark, but we have also increased our development portfolio, our backlog with exclusive projects both in Norway but also in Sweden with 200 MW and also in Denmark where we have now a development team and an asset management team in place. Interesting portfolio of.
Wind and solar and storage projects.
Here on the right- hand side you can see our increase in production over the last years and also the increase of installed capacity.
Ole-Kristofer will take you through the numbers more in detail afterwards. But before we get there, let me give you a short introduction to Cloudberry. We have built a renewable platform independent power producer in the Nordics. We have focused on the Nordic markets and we have also built a platform where we can take the project from early phase greenfield projects to the brownfield production asset and also manage our assets. So we are following the full life cycle of our renewable projects. We have focused on proven technologies. So in our energy mix we have hydropower, wind power and we have also now solar and storage projects. And this project portfolio where we do have over 30 exclusive projects, we are working on getting them into permitting phase and ready to build and also to have a large production portfolio.
Over the last years we have managed to build a production portfolio of more than one TWh or more than 1000 GWh. That's currently giving the company long-term cash flow, and we have focused on certain price areas. In the Nordics we have focused on the seven price areas where you have interconnectors. Historically we have focused on where we saw the demand coming and also where we had the interconnectors connecting them to the continent and the UK. Over the last years we have also started to focus more on where we see the new industries coming, where we see the demand from the data centers. We see the new demand from Power-to-X projects, storage, battery facilities and so forth. We will continue doing more of this. I think the key takeaway from this slide is the flexibility.
We have a flexibility now to focus on where we see the best returns. It could be wind, it could be solar storage in different countries and different price areas. So the flexibility is something that we're going to continue to focus on also in the future.
Getting a bit more into the details, this is the production portfolio. This is the assets that we have in production. We have had great access to new projects and we have been able to move the project into production. With this production portfolio we have also managed to diversify it on different technologies. We have a very stable production profile throughout the year. Wind is producing better in the winter, hydro producing better in the summer, and now also adding battery and storage projects, hybrid projects. We will even have a more stable production profile throughout the year. This is the production portfolio. At the same time as we have built this, we have also built a development portfolio. Here you see our backlog and permitted projects.
This is our bank where we can take new projects, move them forward and get them into production. Or as you see here on the right- hand side, we have managed also to divest or sell some of our assets to finance new projects. Over the three last years we have realized more than 500 million NOK in gains from internally developed projects. This you will also see going forward that we will focus on recycling.
Building a portfolio where we can see both that we will keep some of the projects, but we will also divest or sell some of the projects.
Here is some examples on.
How we build.
More value. I touched upon the Danish expansion. Important here is to also see how we use both our cash and our share to secure new production and new development assets. In this case we are also using the share on 50% premium printing shares to finance the transaction. On the hydro side, we see that we create a lot of value when we develop the hydropower plants and then sell them at two times book value when they are up and running. Nees Hede is our very interesting large project in Denmark where we will have a hybrid project where we will both have solar. We are working on the wind permitting as we speak and also a BESS project, making this a great mix. We have also managed to increase the project from 175 MW to 232 MW.
Holmen being one of the largest landowners in Sweden, we have touched upon before a super interesting cooperation with the large forest owner in Sweden. Dingle is a project that we will come back to. It's a battery storage project in SE3 where we have a grid connection of 100 MW and we have now developed a battery project together with Hafslund.
Going forward, I think our strategy is working. You will see more of the same. We are very well positioned in the Nordics. We have a network, we have all the contacts. We will put profitability over growth. We will do recycling to finance new projects. So you will see more of that coming. But it's super important for us to stay fully financed and to have a solid balance sheet to do the things that we do. We have a 90% merchant exposure, so this is important for us to have cash and to have the ability to also draw more on the facility that we have with the banks. On the right- hand side here you see a little more in detail where we focus and what kind of technology we're focusing on in the different areas.
On the ESG side, we have had no incidents over the last quarter and we have also managed to increase our avoided emissions with new project coming into production. So I think with that introduction, I will give the word to Ole-Kristofer and he will take you through the numbers in detail.
Thank you.
Thank you so much, Anders.
My name is Ole-Kristofer Bragnes. I'm the CFO of Cloudberry and happy to take you through the financial results of this quarter and the financial history of Cloudberry up to date. Starting out here, we see the development of our balance sheet. Cloudberry relisted in 2020 and as you see in the portfolio development, like Anders said, with the production increasing, you also see in our balance sheet increasing accretively from 2020 up until we report now in 2024. We raised approximately above 300 million in equity, 303 million NOK in equity over this period at increasing prices, then doing accretive expansions and also now raising almost above 500 million NOK at 17 kroner per share or the 50% premium to finance our new expansion. We have grown this accretively but also of course having focused on capital discipline.
You see our assets are grown in relation to debt. We've been strongly financed, we're able to stay merchant for power price over this period of time. We also see that in the numbers it has developed in the P&L.
Looking at our 2024 financials, zooming in on our balance sheet, we see.
We have growth in our assets and equity. We are happy to report an equity ratio of 6%-8% having a strong balance sheet as we progress into 2025 with a strong cash position of almost NOK 900 million and consolidated or above $900 million. When you take into our associated companies in our proportionate cash position, our debt is still conserved in relation to our total asset size. We have continuously hedged our debt exposure throughout.
As we have drawn it. So we have 80% of our proportionate interest bearing debt fixed at long term agreements at an all in rate at below 4%, which we are very happy to see. As Anders mentioned, we have the debt facility in place of NOK 2.2 billion with the local savings bank where we have a great relationship. We have almost 600 or approximately 600 million of.
Available in the debt facility that we can't draw on. And we will draw some on the transaction that we have just done. But we'll see this on the next slide here where we jump into. Sorry.
Then when we jump into the liquidity and commitments overview. So we start out with slightly north of NOK 900 million in cash. We have our CapEx that we have commitments on of the remaining CapEx amounts of Sundby and Munkhyttan, which are the two wind farms that we have now completed.
Of course, the net liquidity effect from the Skovgaard acquisition, which Anders touched upon. The 160 GWh increase in production in Denmark and also Norway. In addition to increasing our development capabilities and asset management, that is predominantly financed through an equity raise, but also through a small portion of the cash balance. We also have finance Kvemma.
100% in equity, so we'll draw the debt on that about approximately 50% of our CapEx, and that leaves us with north of NOK 800 million of liquidity which we'll use to be able to grow our platform. As mentioned, we still have available room in our debt facility and will draw approximately NOK 400 million of the NOK 500 we have available after drawing the facility debt. We have an accordion in place of around NOK 300 million which we can increase the debt facility with, and we also have a very strong relationship with the banks in order to investigate how we should think about the facility or if we should decrease that further.
Moving into the P&L side, we see the same story as we've done on the balance sheet. Starting in 2020 up until 2024, we have significantly increased our production volumes, which is one of the main drivers for our profitability. Selling the power mostly at merchant exposure.
At the same time, we also done accretive capital recycling, which is a very.
Important driver for the profitability in Cloudberry and of course something that you will see us continue doing. We have in 2022 we did the internal sale of Hån showing the value creation of development segment where you see the difference in consolidated proportionate EBITDA being explained by that in 2023 we did an external sale of the hydro assets which was significant results and now in 2024 we have the internal sale of Sundby Munkhyttan which we'll touch upon here in a second showcasing the value in our development segment but also done on a creative sale on our hydro side where we did an asset swap selling in northern price regions and increasing our hydro exposure in the southern regions while also increasing our liquidity and showcasing the asset values. So all in all great growth in profitability from time of listing up until today.
Looking then at just the Q4 results, there's a few items here to note. The first one is of course we have a strong growth in profitability quarter on quarter on the back of the value creation in the project segment but also power related revenues increasing.
You'll see that very clear in the proportionate key figures where you also see the 113 million NOK in gain from the internal sale of Munkhyttan and Sundby at third party valuation. When these assets are completed we're then realizing the development again which is approximately slightly about 2 million NOK per megawatt or then the 130 million in gain and that's the main explanation about the difference between proportionate figure and consolidated figures where this has been eliminated and we've spent more time on that in the Q4 2023 results.
But looking at the consolidated key figures on the left-hand side here, the increase from the negative EBITDA to the positive 58 is mainly explained by the actions that happened in Q4 2023 where we wrote down all our offshore activities, we stopped that and that predominantly that's a Stenkalles project and also non-cash deferred tax expense and Odal which relates to the recognition of impairment. So that's the reason why that's in the negatives and explains some of the difference on the jump from Q4 2023 to Q4 2024 and also explains the drop in revenue from the same period of time in Q4 2023 that relates to the impairment but more on that in the Q4 2023 report if of interest.
Moving on in our segment financials.
We're moving on to the segmented financials. We start out with the.
Project segment. You can read more about all the segments reporting in our report, but just to highlight some of the actions here, the main one in the project segment is of course driving the project forward in order to realize the value created in them. And you'll only see them in the financials when we do either an internal and external sales. We talked about this in the previous quarters and now for this quarter we showcase this through the internal sale of Munkhyttan and Sundby. Yes, this is an internal sale but we have engaged a third party valuation expert on this and that's the enterprise value. We sell these at yielding a gain of 130 million NOK or 2 million NOK per megawatt for this quarter. And relating back to the slide I just showed, this is not the first time we've done this.
We have highlighted over NOK 500 million in gain in the project segment. But of course when there's no realizations there you'll see only the cost and development expenditures going forward. But this will be lumpy by nature and the clear value drivers here are progressing the project forward and moving them either towards the priority permit or permit to COD or either in internal or external sale as they produce.
We have also over the quarter increased our Nees Hede project, a clear value driver, but also increased the backlog and have now increased it.
From last Q3 to 2024 with 200 MW of new project in SE3 and it clearly shows our growing brand presence in the region, especially in SE3 but now also in Denmark where we will have a strong presence with a partnership with Skovgaard. The asset management segment. Again touching upon the synergies we'll see.
Through acquiring the technically oriented asset management team from Skovgaard. These are clearly compatible to the team we have here in Norway and we'll be excited to see how that progress in the future. Our corporate segment. Just good to note there that we have a flat development of Q4 2023 to Q4 2024. But the Q4 2024 or this quarter's financial is affected by one-off expense of negative NOK 6 million in transaction costs. So eliminating that one will see more of a flat cost base in relation to Q3 2024.
Jumping into the commercial segment which we didn't touch upon on the last one. This is where we have our power sales or.
Any value creation that's done in producing assets. Starting out on the right- hand side here on the LTM figures, we talked about this in the previous quarters, but just to highlight it again, we did a sale of a hydro assets in 2023 and 2024, albeit the 2023 was a larger transaction in terms of nominal terms. That was NOK 258 million, again two times the book value of the assets we sold, compared to the gain now we had in Q2 2024 of NOK 109 million, but 2.3 times book value of the assets sold. Eliminating this will have a strong we have a growth.
Year-on-year in our commercial segment, diving just into the quarter, we have increased our production from 157 to 213. That is predominantly through our wind increasing. With Odal now ramping up in production, we're happy to see that we have 30 turbines that has passed return to service at year-end and production will continue to undergo a ramp up as we throughout 2025 as final repairs and inspection have been completed. We do over the quarter realize a net power price of NOK 0.59 per kilowatt hour, slightly lower than what we had last year. This is of course driven by the macro environment at this quarter and when you compare this to the Nordic system price, which is the theoretical average of the power price in the Nordic region of NOK 0.36 per kilowatt hour.
So this clearly showcases our favorable portfolio composition where we are located in the southern price areas as Anders talked about in the beginning of his presentation close to the interconnectors.
Yes, and the drop in revenue and EBITDA quarter on quarter is then of course explained by the lower realized prices but then again increased production volumes.
I'll leave the floor to you, Anders, to follow up with market summary and closing remarks.
Thank you, Ole-Kristofer Bragnes, and thank you for taking us through the numbers.
Just a short comment on the market and power price curves. As you know we don't use any internal resources on the power price. We have two different power price curves that we use in our work here in Cloudberry. One of them you see here; it's the Volue Nordic system price estimate and as Ole-Kristofer just mentioned, we have delivered.
Above the.
System price due to the composition of our portfolio of producing assets. That is spot exposed, but we have also a small 10% with PPAs in the mix. So we will continue to look for offtake agreements on attractive levels and maybe increase the fixed price a little bit up over the year if we see the prices are on a level that we think it's accretive for us. But here we have delivered last quarter about 60% above the system price, which we are very happy with. And that is also the part of the historic picture on Cloudberry. We are delivering power prices above the system price. So to sum it up, we are.
Perfectly positioned for the renewable energy transition. We have a fully developed platform where we can take projects from early phase into production with proven technology. We have a network and we have a lot of exciting opportunities where we see that we have positioned us in the right price areas when it comes to the new industry, when it comes to data centers and increased demand for renewable power, and we also see that the power price and other.
Price initiatives are going to contribute to a positive development also in the future. With that, I'm saying thank you for following us through the presentation, and we will now try to answer some of the questions that have been coming in during the presentation.
I can start. There's just a few more technical questions. I guess the first one is related to the purchase price for Odin and how that relates to our first acquisition.
When we talk about the acquisition we've just done that has been conducted as we told in the press release, the valuation there has been done by a third party specialist as well, so in nominal terms the purchase price is lower than when we acquired it the last time and the valuation that has been done now is based upon updated discount rates and power price curves and so forth, but in nominal terms a lower rate. We're also getting some questions about the discount rate from the Sundby Munkhyttan . I can't unfortunately talk about what the rates they have done as this is done by a third party, but it is based on their best knowledge in relation to.
Comparable transactions and also what they see in the market and risk-free rates and so forth at the relevant market, so calculated through a typical CAPM WACC model. Those were the two more technical questions I had. Did you have one for you as well, Anders?
Yes, thank you Severin. Just one more question that I would like to address. The question is concerning the Odal Vind wind farm and yes, we have a great dialogue with Siemens Gamesa on the guarantee work. So it is continuing now after the winter break. We will continue to work on getting all the turbines in production before the summer. It will be according to Siemens Gamesa, 33 out of 34 will be ready to service during February and it will take some more months to get the last turbine in production. We also have a dialogue on the guarantee issues and repair issues with Siemens Gamesa. And as you remember, we have already received a compensation last year, summer 2024. So we will soon.
I hope to be able to give you an update on the total situation, both on the repair and the guarantee issues and the continued cooperation with Siemens Gamesa, but it's work in progress and I think we will get back to this in more detail next quarter.
One more.
Thank you.
Just one more question that I received.
And that relates to why, or if you can give some more color on why Skovgaard paid 17 NOK per share and why that is such a big premium. And that kind of goes back to the beginning of this transaction and how the relationship with Skovgaard had developed. We initially acquired the wind assets from Skovgaard, but we know them for many years back and talked about how we should think of more of a combined IPP. So we started out there, but started just acquiring 80% of its producing assets. And after that we see that the culture aligned very well with Skovgaard. We see that we think very similar about the energy transition, how that moves forward. So the discussion started up again that we should combine or all our call it producing power assets into Cloudberry and he is focused more toward Power-to-X.
The foundation of that discussion was based upon that his assets shouldn't be valued anything else than what we are now or we would have to value his assets the same way we would value our assets. That doesn't relate to the share price at present. You see that through the transaction multiples and where assets are currently being sold, as we saw just this summer of our hydro assets. We started mapping out that discussion that his assets should be valued the same as ours.
In the end we ended up hiring an external auditor who did the valuation on both sides on the same funding principles and through negotiation that ended up with NOK 17 per share on Cloudberry side and the values that we reported for the acquisition on Skovgaard side. So that was.
Just a short answer. That was the basis for discussion that we need to value our producing assets the same way.
For that I don't think we'll have any more questions. Thank you everyone for participating and we'll talk soon.