Welcome to today's presentation, where we have the pleasure to present MPC Energy Solutions. Preliminary results 2025 is of course the subject of today, because of all this, the divestiture and so on, I think that will also be a little bit of your focal point and how far you are in that process. I know that's something that is driving the share a lot, I think we will get into that. As always, we are joined by Stefan Meichsner, CFO and interim CEO. I think, is that still your title? You can present yourself.
I don't know, Michael. I don't know.
Oh, good. Good, good. Then in a box down below, you can ask questions. We will run the presentation through and take the questions in the end. For now, I'll hand the call over to you, Stefan.
Thank you, Michael. Good morning, everyone. Welcome to the webcast. My name, as Michael said, is Stefan, and officially my title is Managing Director and Chief Financial Officer of MPC Energy Solutions. I go with that. That's also what my signature says. Happy to share our preliminary operating results with you today. Before we begin, just a brief note, as always, I will be making some forward-looking statements here, might be subject to change and uncertainty. Please refer to this disclaimer and also to disclaimers that we have in our other reports. What will we be talking about today? As Michael said, briefly on the preliminary results for 2025, looking at our key metrics, how did we actually do in the past financial year?
Then I will also provide a brief update of what we call Project Merlin. As many of you may recall, in November last year, we signed an agreement to sell two of our core projects. This sales process and effort has been dubbed Project Merlin, and I will provide an update on where we stand and why we... when we believe the transaction will ultimately close. The numbers I'm going to show are preliminary. That's what the title says, and they're also still unaudited, so I'm just saying that they could also change during the audit. Usually, historically speaking, any changes were quite immaterial. With that, let's take a look at the numbers.
As Michael referred to, we sold quite a few projects in 2024 and also 2025, especially. That makes a direct comparison between our core metrics year-over-year a little less helpful. A project that may have been fully operational in 2024, wasn't in 2025, or has only contributed very little. I will very much focus on what you see here on the right on each graph, which is the like-for-like comparison, where we exclude the numbers of the projects that we sold entirely, and we just focus on the projects that were operational fully for full-time in 2024 and 2025. With that, let's look at the key metrics. Energy output. We have experienced quite poor weather conditions, actually, across the region last year, especially in El Salvador.
Irrigation levels were, in many months, 10%, below the expected average. We were able to counter that mostly with really great technical availability and performance of our plants. What is also helpful, we had fewer grid-side shutdowns, instructed or ordered by the grid operators, for which in many countries we're not being compensated. On a like-for-like basis, we were actually able to expand our energy output by 3% to 97 GWh . That, as I said, despite poor weather conditions. In a normal year, this would easily have crossed the 100 GWh mark. On the revenue side, of course, higher generation usually translates into higher revenue, and that is what we see here.
In some cases, our revenue per megawatt hour, so what we sell the energy at in certain countries, is linked to spot market prices, and we sell at a discount. Luckily, these tariffs were really quite stable. We had a lot of volatility in the past, especially in 2022, 2023, when the Ukraine-Russia War broke out, and the world truly changed on the financial side and on the energy supply side. At the moment, things are really quite stable, and we managed this rather well. Overall, on a like-for-like basis, we were able to expand our revenues to $10.6 million, which is also a 3% increase. Then looking at the operating profit, and especially the operating profit margin related to that is really the core focus.
As we've said many times, we wanted to make sure that the projects that we have perform at the level that they should for these types of projects, meaning that they should be able to get to 75% operating margin, if things go well. Since they are performing well technically, the top line is all right, we really had to focus on bringing costs down and making sure that we get to these profit levels, that is really the key takeaway. In 2025, we did that. On a like-for-like basis, the operating profit that our projects generated jumped 17%, correspondingly, the margin went up to 76% from 67% the year before. That is really what we spent most of our time on to make sure that costs come down and that we finally get to profit levels that we should see.
I'm very proud of the team and what they have done. It was a relatively fine year for us, but especially this margin expansion, that is, operationally speaking, what was most important. I'm proud that we achieved this, and of course, now we're aiming to simply maintain or slightly expand that level. Overall, very good results that we achieved here in 2025. On the corporate side, we also continue to bring down our overhead costs. This is a process that we started in mid, late 2023. The cut between 2023 and 2024 was very substantial, and now we just managed to cut another 11% off of that. Of course, in part, this is driven by the mere fact that we are becoming a smaller company.
We're selling projects, so there are certain staff that we no longer employ. There are certain, let's say, advisory structures that we no longer need to have in place, so that helps us bring down costs, but it was also a real true effort. The cost reduction of 11% is impressive. It's not quite as much as we had hoped for. Because of our sales side activities, we had some, let's say, M&A-related advisory fees that we could not charge directly, you know, to the investment asset or deduct from it. At the end of the day, we expend these. Otherwise, we would have ended up with slightly lower overhead costs. That is not a problem, because looking ahead, 2026, the overall overhead budget that we have refined for our company is $2.3 million.
We should see another 25%-30% decrease year-over-year because of the smaller setup that we have and the smaller portfolio that we have going forward. That is something that we can look forward to. Also, very positively, free cash position. The cash we have that we define on being available to spend on overhead, to potentially invest in new projects, but also to distribute, increased following the sales, the divestments that we made to $9 million at year-end, which is actually at the higher end of the projected range that we gave, and with the lower overhead for 2026, and with basically no commitments on the project side that we need to address at this time. We have really great flexibility.
We can continue to working on closing the sell-side transaction, and then ultimately, we can do what we said we would do, turn around and define a way how much we can distribute to shareholders in 2026, which is very, very much on top of our agenda. Just to wrap up the preliminary financial parameters, total assets year-over-year have changed very slightly. The project debt that we have, and the consolidated cash are in a good relation. Overall, the equity ratio is at a solid level, I think a level very common in the industry. There's really not much to report here. We have seen a very stable development on that side, on the balance sheet side in 2025 as well. Which brings me to what Michael also mentioned during his introduction.
We have a project we call Project Merlin. Just a brief reminder, in November of last year, we signed an agreement with an investor from... that is based in Panama, to sell our two core projects. One project is in El Salvador, which has been operational since 2023. We actually developed that project ourselves. We built it ourselves. It has been a project that has done relatively well compared to others since. We have our project in Guatemala, 66 MW peak solar PV plant. We also developed that in-house. We built it. It has actually been built. Construction was completed already in mid-2025. Since then, we have been working on securing the permits we need to start testing and then ultimately commissioning the plant.
The frustrating thing here being that the process is extremely slow. We are actually being met with new demands and new regulations as we go through this process. This has caused a delay. In December last year, we presented the transaction to our shareholders. We proposed to sell the projects. What do you say? They anonymously approved the transaction. That hurdle has already been taken. Now we just continue to work on the conditions we need to meet to achieve closing. Most importantly, of course, if the power plant in Guatemala actually starts operation. We now have two of the three permits we need. We're working hard on the third one.
The application is underway, but as I said before, it's a very unpredictable timeline that we have, dealing with a lot of different authorities, a lot of different oversight bodies, who in some cases, I believe, are also pushing things away to different regulatory authorities, and then they need to find a way, okay, who's actually in charge? We're managing it, not the first time. I think we're actually making good progress, and that's why we still expect this transaction to close in the 2nd quarter of 2026, shortly towards the end of that 2nd quarter, 2026. The total proceeds we expect from the sale are around $27 million, so it's quite substantial.
You add that to our free cash, and you will see that we will, at one point in the middle of the year, have more than $35 million available, especially given the low overhead spend and commitment, so we should be in a fairly comfortable position. During the upcoming Annual General Meeting, which will be held in mid-May, we will put the resolutions on the table that we need to the shareholders to pass, and hopefully they will, that allow us to make distributions in the future in a tax-efficient manner.
These won't be dividends. We're targeting capital reductions, so just returning capital to shareholders. Once these resolutions have hopefully been passed by the shareholders, there is a brief waiting period in the Netherlands of around two months, and then we can start distributions.
That's very much what we have in mind. We want to make sure that the transaction closes, we want to distribute the proceeds, and for the remaining portfolio, we will continue, hopefully, good operational results, and then ultimately see what we do with these projects as well. Michael, actually, that already concludes the prepared remarks.
Yeah.
Short and sweet.
Perfect. Let's jump into some questions. Are you in the sales process of the remaining projects you have left on your books? I guess the one in Mexico is the big one, right? Are you in a sales process, thinking about it? I don't know whether you wanna disclose anything here, Stefan.
No, I think it's very apparent. The two remaining projects, if you combine them, the revenue that they can generate together is around $5 million. At a margin, because the Colombian project doesn't have a very high margin of, let's say, 65% in total. You compare that to the overhead, you compare that to the financing costs, you will note very easily that these two projects alone cannot carry our company as it is today. Of course it makes sense to seek a divestment of these as well. This is very much the mandate that we have from our shareholders to downsize and to maximize distributions. Colombia and Mexico are also very challenging markets, so this will not happen tomorrow. We're looking at it, we're working on it.
Of course, we will focus on Mexican investors or investors located in Mexico for the Mexican asset, and investors located in Colombia for the Colombian asset, because we believe that is the natural way this will go. It's very difficult to, let's say, commit that this can be done in 2026, but we are certainly working on it.
Perfect. Is there anything in your pipeline portfolio that you can divest? You know, do you have some projects that you were, a couple of years ago, maybe thinking about investing into and have prepared and put it to, you know, to the investment decisions, but letting other people take over the... Is there anything left, or is most of that closed down?
Very little is left. We've already done a lot of work. Last year, we sold a development project in Colombia. We stopped quite a few developments. There's one development asset left. It's fairly early stage. It's a 30 MW plant in El Salvador. We will sell that project. The aim that we have. It's still an early-stage development. Whoever buys is taking on quite a lot of risk to get the project to where it needs to be. We want to make sure that we at least recover our historical development costs and that we retain some upside.
Should the project go into construction ultimately or achieve ready-to-build, we still want to participate in that development premium that is being generated, even though we're not doing the development work, and therefore, we don't have to spend the money. That is really the only true remaining development asset, and we're in active conversations with interested parties because we have decided we don't want to take that risk, we don't want to spend that money. Our mandate is to maximize distributions.
Yeah.
That's why we will certainly divest that project as well. It will be a deal where we get some money up front and then hopefully more money later on. Yeah.
There's a question, will costs go further down in 2026 after divestiture ? I think you already alluded to that, what cost base we should expect from the overhead.
Yeah
... and could it go further down after divest year, I guess, have you in the $2 point... Was it $3 million? You mentioned $2.2 million. Is there any advisor cost, you know, for closing the process?
Yeah, I mean, most advisory costs that are directly related to the sale, and if that sale happens, then we can, you know, model that together, and it's not being expensed, so it would just be deducted from the profit on the sale. In terms of bringing costs down further than the $2.3 million that we are projecting for this year, which is really not a lot, it's $200,000 a month, roughly. That's quite low for the setup that we still have.
Yeah, you're on, being on the stock market, I guess.
That is the point.
... there is cost. Yeah.
If you ask me whether we can bring down costs further beyond that, I think it's very closely tied to the question, should we remain a listed entity?
Yeah.
Because listing costs and the related audit fees, in particular, all the tax work we have to do globally to be in compliance with international regulations that we have to follow, that's the tricky part. If that was ultimately decided is no longer beneficial for us, because the projects have been sold or because someone says, "Hey, I like what I see remaining, but I really want this to be private.
Yeah
W e will have that conversation. Of course, that can be done. For now, the projected $2.3 million over for 2026 is really the bottom for us, until we make more divestments than the ones that we already have signed for. Yeah.
Sure. Actually, whether you can give further details on the pre-closing conditions. That's I think you went into it. What the conditions are, you met two out of three allowances to run this plant. How are you working with this? Do you have local advisors that know the jungle of, I guess, a local government down there? Just a feel on how... Is it simply just doing the hard work, getting an answer here and knowing you need to go and get the next answer until it gets? A little bit of a feel on this process.
Yeah
in the last few.
No, that's very fair. It's a little bit of both. Yes, we do have local advisors that help us get through this. The final permit needs to be issued by a local or regional grid authority. They have requested a detailed report about the technical setup and that we're fully compliant with also new regulations, which in some cases requires us to install new equipment that we were not aware of. That is happening in parallel. This report cannot just be written and filed by us, it has to be filed by a third-party expert. There's only, like, five or six of those that are allowed to do it in Guatemala. We have hired that person as an advisor. He's very diligent, which is good. Wants to make sure that the report he files is ultimately approved, and if you file a bad report, then you're just creating more trouble.
Yeah. Yeah.
This is how it works. Our team and the contractor we had to build the plant, everyone is just putting together all the information that that validator needs. He will prepare his report, file it with the authorities, then we will have to wait. At the end of the day, we're getting very close to finally getting this done because we've been working on this for so long. What I can say is there haven't been any further delays. We're still on track with what we have heard is the normal process for this final permit. That's really all you can say.
Yeah. Yeah, I understand. It was just to get a little bit on.
Yeah
... The feeling on how the process was evolving. How close do you think you will get to the current equity value after this process and cost to keep guarantees? You know, I know now you are.
Yeah
... asked to guess a little bit on your equity value versus the future and after closing and divestiture of the remaining projects and so on. I know this need to be your estimate, so I don't know whether you wanna go that.
Look, this is a good question. At the end of the day, we value stuff at fair value every year at least. With the report that we will be putting out, with the equity that we have, even the preliminary results, it's around $42 million. That is our equity position as a group-
Yeah
... as of today. This is basically the net asset value that we believe everything we own has, and we want to get very close to that, which would be nearly, I don't know, NOK 20 per share. There's two questions that I cannot answer, and that would, you know, ultimately just determine how close we can get to that value, and that is, how long will it take us to get money in exchange for the remaining assets?
Yeah.
Because the longer it takes, the more overhead we have to spend, and that number goes down. The second thing is, we know what we believe the fair value of these assets is, but we don't know whether the market in the region sees it the same way. When I say the book value of my project in Colombia, for example, is $10 million, whether someone will pay me $10 million, or $9 million, or $9.5 million, or maybe $11 million...
Yeah
... that is still to be determined, and that depends on a lot of factors, and it's very individual to the respective investors. That's why the aim is to get close to it. To get close to it, we need to be relatively fast, but we also cannot sell below what we believe is a fair value. Ultimately, yes, that's where... This is where we want to go, and the risk is the timing, and the risk is the pricing, and that is-
It's also generating cash, but I do understand it goes into some overhead, you know?
Yeah.
I guess that's a balance.
Yeah
... you need to take.
Yeah.
Just to go up in the helicopter to understand, you know, when you are facing such, "Why, why don't you give me the permits?" There's actually a need for this energy in Guatemala. That is correct, right? They are under what do we call it? They don't have enough energy in this country, you know, so there should be if you understand, a willingness to maybe when the red tape is over, to really get a wish to get this hooked on the energy system. Is that correctly understood? I guess.
That.
I've said in the past at least that.
No, it is correctly understood, and, you know, all respect to Guatemala, they have done this already very successfully. They do have large-scale power plants that they brought to the power grid. There's other plants being built, actually right next to ours that is facing the same issues because, as you can imagine, this is relatively new for a power system that is maybe not yet as reliable in all cases as it should be. When you bring large-scale solar plants, you connect it to the grid, you need to understand what is happening. It's perfectly fine that they're being diligent, and they're taking their time to make sure that it's properly done. They're not trying to prevent the expansion of renewable energy.
The opposite is true, I think they just want to make it the right way, and I'm sure if we look back 20, 30 years to Europe, we might have experienced similar things, because it was still brand new. I would say let's cut them some slack, give them the leeway to do this right. We know we will ultimately get there. Of course, it's frustrating because you want to deliver also for the shareholders, at the end of the day, there's no active attempt to prevent what we're doing. It's just that it's happening so much in the country. There's so many new plants being built.
Yeah
that they just need to figure out what is the right way, because Guatemala is also not an isolated grid. They're connected to other power grids in the region. I think that that is probably the explanation why this is taking time and why the authorities still need to figure out how to address certain things.
The final question, then I will let you off the hook, Stefan. Understanding the difference between, you know, consolidated cash and your cash, free reserve.
Yeah.
I think there's some $5 million that has some kind of reservation on it or are staying in some of your subsidiaries. Just, you know, I think cash is what we're looking at your company, so just to understand that one.
Yeah. When we look at the consolidated cash, that is the cash that we have in the entire company.
Yeah.
Some of that is, of course, within the project entities. It's being used there, and we don't have access to it, and we cannot just take it out and give it to our shareholders. That difference between what we have as a holding group that we can at any time.
Yeah
... Certain caution, applicable here, take and spend on overhead or give to our shareholders, that is the free cash.
Yeah.
The stuff that is in Mexico, Guatemala, El Salvador, that we cannot simply take out because it's needed there, that's the difference to the consolidated cash.
Yeah, that's just for running costs like.
Yeah.
A loan commitment, but in reality, it's yours, right? You know, if the project-
It is ours.
Yeah.
It's just not readily available and it would be unfair to say we have $14 million in cash, when the truth is that's true, that's cash but i don't have immediate liberty to spend all of it as I see fit in a way. Yeah.
Perfect, Stefan. That was, I think the final question from me and the audience. Thank you for taking us through your preliminary results and an update on the Merlin projects. May everybody have a nice day and a nice weekend when you come to it.
Thank you, Michael. Bye-bye.