Good afternoon everyone. I'm glad that you're joining me today for an update on our company's performance in the third quarter of 2024 and year to date. As always, I'm happy to take your questions after my prepared remarks and if you would like to pose a question, please use the Q and A function that is embedded in the webcast platform. You will find it below the slide feed. Before I begin, a quick reminder that I will be making forward-looking statements in this call and our disclaimer about forward-looking statements displayed now on the screen in front of you applies. You can also check the respective slide in the webcast presentation that we uploaded to our website and the disclaimer can also be found in the Q3 report which we published this morning. The report is of course also available on our website.
Before I dive into the detailed financial performance that we've recorded year to date, a brief update or reminder of what our company is about and what we do for those that are joining us for the first time. MPC Energy Solutions was founded a little over four years ago. We went public on the Oslo Stock Exchange in early 2021 and our business is to operate power plants and to sell the energy we produce in these power plants to our clients. We are a full cycle independent power producer. That means we not only operate the plants long term, but we also develop them in the early stages. We build them and then we operate them either alone or together with our partners.
We're exclusively focused on renewable energy, mostly solar, photovoltaics, but also wind, onshore and in the future we expect that we will combine these technologies together with co-located storage systems or even invest in storage systems that are operated standalone. The focus region that we operate in is Central America and to a smaller extent the Caribbean, meaning all the way up from Mexico down to Colombia and into the Eastern Caribbean in countries like the Dominican Republic and Puerto Rico. Since the IPO we've put five projects in operations across these different countries, combining for a total installed capacity of 80 megawatts.
Earlier this year we started construction on our biggest project to date, a solar PV plant located in Guatemala. Once completed by the middle of next year, it will nearly double our capacity, double our revenue, double our operating profits, and thereby have a very big impact on the financials and overall size of our company. There are some additional slides on our business and especially our relationship to MPC Capital, one of our largest shareholders or the largest shareholder. This kind of information was requested by some investors. I will not go into the details here during the call today. If you check the webcast presentation, you will find the details that you need.
Now, looking back at Q3 and year to date, we very much continue to tell the story that we already mapped out in the first and the second quarter of this year and iterated upon during our webcast at the time. The energy output is up, the revenue is up, the operating profits are also up significantly year over year, and this happened to such an extent that at the end of September of 2024, we had already surpassed the full year numbers of 2023, so it's a substantially positive development, and you pair that with the cost cutting that we implemented, lowering overhead by 30% year over year, so compared to 2023, that gives us the chance to really step by step inch closer to also reporting positive operating profits on group level.
And, adjusted for impairment charges that we took this quarter, this is actually happening right now already, and this should further improve towards the end of the year. I will go into the details of these numbers as we walk through the presentation, but I think it's no surprise that the scalability that is inherent in our business drives up the numbers not only on a proportionate level, but also on a consolidated basis. It is also noteworthy, and we projected this in the last webcast for the half year numbers that we saw. Improved operating margins in Colombia. After reporting disappointing numbers in the first half of the year, we significantly improved the operating margin from our project Los Girasoles in Colombia. You will see this as I go into the project details, and I'm also happy to report that the farm down activities.
So the project sales activities that we're undertaking in Colombia are taking very good shape for a project in our development backlog. We have now signed a binding sales agreement which we expect to be concluded by the end of this year. And for the two operating assets that are much larger, and of course the deal size would be much larger, we have signed non-binding agreements and the exclusive buyer is now undergoing due diligence. And we hope that we can also make progress here, maintain the valuation that we've seen in the non-binding offer and ultimately move towards closing a transaction as early as January or February of 2025. Unfortunately, it was this time not all good news. We reported previously that our CHP plant in Puerto Rico has seen very little energy demand from the off-taker.
Unfortunately, the situation has not improved. Quite the opposite. It has deteriorated very, very quickly in recent weeks. We are now also of the view, the clear view, that the situation will not improve anytime soon. As we've said before, we have always planned to exit the technology and also the market. Now we see ourselves to be forced to move much more quickly and unfortunately we will not be able to get close to the valuation of any sale that we had previously hoped for. We have not signed any binding sales agreements yet, no binding documentation, so I have to be a little bit light on the details, but I believe that we can announce a deal here fairly soon.
Yes, it will be significantly below the remaining book value of the project, and we will take that anticipated impairment in Q4 of this year, and there's really nothing positive here, I can say, other than that we looked at every available option, we looked at deconstructing the asset, putting it somewhere else, selling energy to another off-taker, selling energy to the grid, even let's say, more legally driven options, and we came to the conclusion that selling the asset, even if it's below book value is the best move for us, it will yield the best result for us, and therefore ultimately it is the step that we decided to do, and at least it will boost our free cash position once the sale is concluded. It is important to underline that this is an isolated event.
What's happening in Puerto Rico in this particular project does not affect any other project in our portfolio, and it's also we don't see any similar or equal issues appearing in any of our other projects. This is really an isolated event. We were hoping for a better outcome, but this was out of our hands at one point, and now we're just trying to recover as much as we can. Another challenge is our investment in a project developer called Enernet Global. It's a company that we've been invested in since before the IPO, and we originally also had a development partnership with them in the Caribbean. That partnership was already discontinued a while ago. Unfortunately, Enernet Global is also facing some headwinds in its business and is now closing a new funding round.
We have decided not to participate and not to provide any additional funding in the future. But as a consequence we now have to accept a partial loss on our original investment and we therefore will take a non-cash impairment of around $1.7 million in the fourth quarter, sorry, of this year and then the remaining book value of our investment will be around $3 million. Given that this only happened this week, the effect is of course not yet included or not included in the Q3 financials that we published this morning. But it's still important to know that this is something that we already agree to, and we will take the impairment going forward. Now back to some more positive news, which are our operating results. So I already briefly said that across the board, the key metrics that we're tracking are up.
To be more precise, energy output is up nearly 40% year over year as of Q3, 2023. Proportionate project revenue [is up] more than 40%. We also continue to improve our operating margins, getting closer to the range where we want to be, and we more than doubled the proportionate project EBITDA this year compared to 2023, so this really continues the trend that we've already seen in previous quarters. Of course, for the most part, this growth is driven by simply having more projects in our portfolio that are operational compared to last year, but even on a like for like basis, we're seeing improvements. Energy output is up because of the good conditions that we see locally, but also because of some technical improvements that we made last year to some of our existing projects, and especially in El Salvador.
We're also being supported by the proper PPA price kicking in in the second year of operation and by higher energy tariffs in general in the country or in the entire region. While we're normally not exposed to spot market movements, in El Salvador in particular, we are, let's say, subject to a reference tariff, and that reference tariff is currently at a fairly high level. We expect it to remain that way, and we are benefiting from it this year. Looking a little bit deeper into the individual projects, of course, the project in Mexico, the project in El Salvador, they continue to contribute most of our revenues, energy output and operating profits, and they're also operating at margins that are in the range that we expect them to.
The Puerto Rico project has contributed positively this year, and of course, we will receive the revenue, any outstanding invoices as part of a divestment. And very important is that the Los Girasoles project in Colombia, after only reporting around 10% operating margin in the first two quarters of this year, we're now back at 36% as we recovered what we said we would recover, lost revenue due to a metering error. And we are also recognizing some trading results that we previously did not recognize. Also, the second Colombian project, Planeta Rica, which is a joint venture that we're invested in and which went online in December of last year, is performing in line with expectations and also in line with operating margins that we believe are feasible and solid in Colombia.
This leads to overall a proportionate revenue of $9.7 million and a proportionate EBITDA of $6.5 million. Both values up significantly, as I said, year over year. Another trend that continues is that we keep our overhead costs under control. In late 2023, we initiated a cost cutting program with a target to lower costs year over year by around $1.5-$2 million. We are currently on track, as we were before, to achieve this. As of September of this year. The reduction is the 30% that we're targeting when it comes to free cash. Q3, we saw a lot of tax payments and mostly prepayments that we had to do from our holding companies, but also using the free cash that we have to meet these payments in some of our projects.
And that's why the free cash position is lower than it was at the end of June 2024. But given the sales activities that we have ongoing in Puerto Rico, in Colombia, in Guatemala, of course, given the lower overhead that we now have, we are comfortable with the current cash position. We know that cash is coming in towards the end of the year. So the current $1.6 million in free cash, we expect this to climb up significantly in the range of anywhere between $5-$6 million, depending how quickly we can close the first transactions. If we move further and we walk away from the proportionate results and we get closer to the consolidated values, the story is the same. Revenues are up, project costs are down, which gives a significant boost to the EBITDA on a consolidated basis, nearly doubling the results from last year.
Overhead costs are lower. So we're once again posting a positive group EBITDA. And when you adjust the operating profit EBIT for the impairment charges that we deliberately took to reflect the write-offs on some of our discontinued projects and taking first impairments related to Puerto Rico, you can see that we're getting very, very close to a positive adjusted group EBIT as well on a consolidated basis. And this is ultimately what we targeted for this year. And we are currently on track to achieving this, especially if our portfolio continues to operate and deliver as well as it has year to date. Rounding this off with some other indicators, our equity ratio remains in the area of 15% as it was before. So we still have a lot less leverage on our balance sheet than other peer companies have.
This is a certain upside, but of course given financing conditions in certain markets and a generally higher interest rate environment still, this is something that is not a short-term fix, but something that we will pursue to improve, if you will, over time. The Adjusted EPS is negative, but an up increase, so positive development compared to last year and this adjustment means it has been corrected for FX gains and losses and for the impairment charges that we took. How does this affect our year-end outlook? We previously guided $12 million in proportionate revenues and $8.5 million in proportionate EBITDA and we will end up very close to that number, but of course, given the stopped production, the halted production in Puerto Rico and our divestment, we will no longer see any further contributions from that project.
Therefore, despite the excellent performance from the other plants that we operate, we will lower our guidance a little bit from previously $12 million and $8.5 million to now $11.5-$12 million revenue and $7.5-$8 million in proportionate EBITDA. Group overhead ending up 30% below the previous year. Naturally, given that the Puerto Rico project doesn't have such a substantial impact on our overall business, we are aiming for the higher end of both ranges towards year end. With that, my prepared remarks end and I'm more than happy to take your questions. I will give you a minute to post them in the question box embedded in the webcast platform. So far, thank you for your attention. Let's see that we move on to the Q&A session. Okay, the first question that I see here is the following.
Your free cash position has decreased. How much money do you expect to come in from different divestment activities you are currently pursuing and what is the timeline? Okay, so let me once again state that I'm not concerned about the level of our free cash. It's lower than in previous quarters, as I said, mainly because we paid more than $1.5 million in taxes in Q3 on our holding entity level. But our overhead is low, around $300,000 on average per month. So we have no further commitments with regards to project investments and that gives us time. Now, the overall number of the potential sales that we are currently looking at is around $25 million. And this only includes the Colombian assets and the sale, the forced sale if you will, of the asset in Puerto Rico. So Guatemala is not included.
Mexico is not included. El Salvador is not included. The rest of our pipeline is not included. That should give you an indication of how. Of what? I constantly urge that there's way more money, way more value in this company than what is reflected in our market cap. If things go as planned, you ask about the timeline. The sale of Puerto Rico and the sale of the development project in Colombia should be concluded this year. And that means we should see over $4 million flowing back to us this year from these sales. The due diligence for the larger projects in Colombia will of course take more time. And once again, we've not signed any binding agreements. It's certainly doable to sell these assets latest in Q3 of next year and that should be our target.
On top of that, we're also expecting some cash back from our project in El Salvador of around $300,000 this year. So when it comes to our free cash position, we will see an upside by the end of the year, an uptick, and then with the sales of the Colombian assets that we are proposing in the first half of next year, we should be fine. The next question. Can you elaborate on the impairment you expect from the sale in Puerto Rico, the sales price that you're expecting and the other impairments? Okay, yes. So again, we haven't signed anything binding. I don't want to be too precise, but I will do what I can. Let's start with Puerto Rico. We have now taken some impairments this quarter. The remaining book value of the asset is around $8.3 million.
The magnitude of the non-cash impairment that we will take on this sale is of course related to the purchase price. I would expect that we will recover around half of the current book value. That means the write-off will be substantial. But all things considered, I maintain that this is by far the best option. We are far away from recording a complete loss, which was a possibility given the development that we've seen. We've done everything to prevent that. If we end up with a sales price of $4-$4.5 million, I think given the circumstances, we have done our best and at least increased our free cash position substantially and gotten rid of an asset that has been problematic ever since it started operations and has weighed us down and taken attention away from us. The other impairments.
We took a write-off on projects that we discontinued where we wrote off the historic development costs in Colombia and Jamaica. We might still sell these projects to other developers or investors who want to take a shot at it, especially in Jamaica, but we're taking the step to really take out the value of projects that we're no longer pursuing. Any sales proceeds in the future would be upsides to that. On the other hand, I mean, some of the projects, especially the one in El Salvador, especially the one in Guatemala, they are worth much more and we know this than what is reflected in our books, so there's upside there, a silent reserve, if you will. That needs to be kept in mind as you look at the different impairments that we're undertaking.
Question here on the Guatemala project: what is the status of construction and your co-investor search? Okay, so I received the last progress update last week. We stood at 50% construction completion. At the time all the material is on site, the substructures have been installed and module installation is about to begin. And with that our timetable remains unchanged. We're still in line with what we communicated before which said that we will connect by the middle of next year. We're currently also still in budget and the same goes for the previously communicated timeline for the potential deal that's also unchanged. Due diligence is underway and we will communicate more on that when we have a clearer view. The next question is what is the sustainable energy price for El Salvador plant?
Okay, so I suspect this to mean what is the price level per megawatt hour, for example, that we can retain? Currently we are at around $130 per megawatt hour by, you know, set as a reference tariff, we are trading at a discount of roughly 16% to that. And I would say for the foreseeable future that is the price level that I would expect as this is driven by a lack of water reserves in the region that is very much determined or where the price is very much determined by the availability or lack of water in the hydropower plant reserves. But I would always say that it will always be around for us. Anywhere between $105 and $110 per megawatt hours is what we're planning with. And we have currently no indication that this should go lower.
And I hope that that answers the question. I already commented on the question that is also posed here. And then there's a question, do you have to invest a further part of your free cash for the San Patricio project? The answer is no. The project is fully funded. We invested $8.5 million in equity. The bank is providing around $30 million in debt and we are at a stage where the equity portion has been invested now in construction activities and anything further will be paid for by the bank.
Of course, if there are any unforeseen delays or cost overruns, which is unlikely given the good progress that we're making and the turnkey fixed price contract that we have, I don't believe that we will need to make any further investments into that project and that it can be connected without requiring any additional capital. One more question is what I see here for now. So do you see possibilities to improve the performance or numbers of your operating projects going forward? In some cases, certainly we are constantly looking for improvements. Of course, once a project is operational, there's only so many things you can do. A solid maintenance regime is of course very important. And also making slight technical improvements where we can.
For example, in Colombia, for both projects, the tracker systems that help, you know, increase output for the plants has not yet been fully commissioned. So that's ongoing and that is an improvement that we will make. We can always seek to optimize the operating costs and cut expenses. The greatest lever, I would say, is always the financing. Most of our projects already have very reasonable or even attractive financing arrangements in place. In Mexico we have a fixed price arrangement of below 5% interest rate per year. We cannot beat that in the current environment, but with further operational track record, and let's take El Salvador for an example, where we pay a margin of almost 5% on top of SOFR, which is a variable rate. Either SOFR comes down and this is optimized.
But I think with a good operational record we can also tighten the spread that we're paying here, especially if you compare to the conditions we're getting in Mexico or Guatemala. So there's definitely some upside here and we will look into translating that upside and generating savings on the financing side and thereby increasing our cash flow. Because our focus is always on maximizing the cash back from our projects. And if we can improve the financing condition, that will certainly be the biggest lever that we have to make that happen. Another question, when you refer to potential farm downs in Colombia, are you considering the sale of both assets with a complete exit from Colombia? And if both assets are sold, would you then no longer pursue farm downs of San Patricio?
Okay, so yes, a complete exit from Colombia is ultimately what we have in mind from the development backlog that we still had. We're now selling one project, we're discontinuing the two others, meaning we have two operational assets. We have received offers for both of these assets and we intend to sell both of them, provided that the valuation that we have received as an indication in the non-binding offers does not change. Now, as to whether the cash that we might receive from these projects would then put off any co-investor search in Guatemala. From a liquidity perspective, which was never the main driver for selling down Guatemala, it's certainly something that could be discussed. I think we also always argued that we want to sell assets early on to secure the development premium and thereby also underline our business case.
And at the end of the day a decision will be made once we have a binding offer on the table, and this will be put to a vote on the board, and then we will weigh the pros and cons. At the moment, we are in discussions to selling, and therefore, our motivation hasn't changed. All right. Giving it maybe a few more seconds here for other questions to come in. Otherwise, I think I've covered them all. All right. Terrific. So I want to thank you for taking the time. This presentation, the recording later on, the transcript and also the Q3 report we published, as I said, are available on our website. Thank you for participating. Thanks to HC Andersen for making this webcast possible. And I guess I speak to you again when the year is out and we come back with the full year results.
Thank you very much and have a lovely rest of the day.