Welcome to today's event, where we have the pleasure to present MPC Energy Solutions. Today's topic, your Q4 results look pretty strong on the projects, but also with some impairments. I think we will dig deeper into what is driving that. Welcome to you, CFO and interim CEO, Stefan Meichsner, who will take us through the presentation and answer questions in the end. Always remember, you are very encouraged to ask questions in the box down below. Do it in Danish. I will try and translate to the best of my ability. Of course, we do this in English. Stefan, I will hand the word over to you now to take us through your presentation.
Thank you so much, Michael. It's good to be back. Good to talk again. The agenda looks very short, but there's a lot of information to share with the listeners and viewers. Before I begin with that, I would like to just remind everyone who's maybe joining for the first time, not so familiar with our business, who we are. MPC Energy Solutions is a company that was founded four years ago. We are listed on the Oslo Stock Exchange since we started this business. Our business is that of an independent power producer in the renewable energy industry. That means we develop projects, we build projects, we operate power plants long-term, we sell clean and affordable energy. We do that in Central America and to a lesser extent in the Caribbean. That is the market that we have chosen for our business setup.
The portfolio that we currently have is four projects that are in operation. These are all solar PV plants, one in Mexico, two in Colombia, one in El Salvador. We have a very big construction project ongoing, a project that is basically the size of our entire portfolio today in Guatemala. We started construction on that earlier last year, and we will connect the plant by the middle of this year. This is a very important project for us, and it is progressing rather well. The portfolio was a little bit bigger last year, but we sold our combined heat and power plant in Puerto Rico. I will get to that later in the presentation. At the end of 2024, we are now down to four years, which brings me to the main part of this presentation, which is a review of 2024.
I'd like to issue a small disclaimer. The numbers I'm presenting here are still preliminary. Historically, and that means unaudited. Historically, there wasn't a lot of difference between the unaudited and audited figures, but I'm just sending this as a disclaimer so that people know the final numbers might change ultimately. What went well last year, what didn't go so well? What went well is that we grew a lot. We showed higher operating profits and also margins. This is in part driven by the fact that we simply had more projects in the portfolio, but the projects that we already had also performed much better. If you look across all the key metrics, energy output, revenue, operating profits, we saw significant increases year-over-year, and the operating margins also improved.
On group level, we added to this improvement by significantly reducing overhead costs by 30% compared to 2023. That was the target that we announced before the year. I'm very happy to report that we actually managed to get there. It required a lot of discipline, but I think it also proves that if we are committed to something, we can deliver on that. If I take out the impairment charges, which we will talk about, as you said, our group EBIT is actually very, very close to break even, which was the goal for 2024, which we just barely missed. We can still be very proud about the operational performance of the projects and about our efforts and implementation of the cost reduction measures. As I said, a clear highlight is also the construction progress in Guatemala. We're currently on time. We're currently in budget.
I have some pictures from the site later on. At the end of the day, we see no reason why we shouldn't be able to connect to the power grid by the middle of this year. We expect the project to contribute to revenues and to profits for at least six months in 2025. Also very important, and we see this as a highlight, is the sale of our combined heat and power plant in Puerto Rico. We acquired the plant a few years ago. From the very beginning, there was always very bad timing. We were simply faced with very low energy demand from the off-taker, who was going through a restructuring process, still is actually.
At one point, the question was, do we want to risk losing everything that we invested, or is there a chance to recover part of the investment and not be stuck in courts for years and years? We decided that a sale was the best option. Ultimately, we recovered $4 million from the sale, which is still substantially below what we originally invested, but it's better than at the end of the day ending up with nothing. Finally, you alluded to this by saying, you know, we impaired a lot of value. That is true.
I see that positively because we cleaned up the balance sheet in the sense that we simply took out asset values that we either considered overstated, where we believe that what we will ultimately recover, for example, when continuing to operate a project or selling it, we cannot recover the original investment. We also had some legacy obligations from projects that we already ended a year or two ago. We discontinued some development projects. All the assets related to these, we simply impaired. We took them off the balance sheet to have a solid basis starting into 2025 to mitigate the risk of further impairment down the road. A clean balance sheet, I think, is always relevant. That is why we took this step, even though some might look at the net result and say, this was not a good year. I would disagree.
I think it was a year of continued transition and transformation. We had solid, good operating results. We have costs under control. We simply took steps to impair values that we no longer saw adequate. On the low lights, of course, the impairment charges related to the project in Puerto Rico, related to Colombia, and also an investment we have in a US Microgrid developer. They, of course, weigh heavily on the overall result, but this is a one-time thing. This is a non-cash impairment charge. I see them relatively relaxed now that it has been done. Something that is not so relaxed, I must admit, is that we are seeing a more volatile security situation at the moment in Colombia, where we have two projects, and one of them, unfortunately, is affected by this.
There are some militarized groups that are fighting for dominance over certain areas. At the moment, the plant is not affected. We can operate under normal conditions. Of course, we protect our plant. We protect our people there as much as we can. Presence on site is really limited to the absolute minimum. In these situations, you never know what might happen down the road. We just need to monitor it carefully. Since we are trying to sell the Colombian projects, as you can imagine, for this particular project, the process is now slower than we expected because it's difficult to travel to the region, to conduct site visits, conduct due diligence. We need to wait for the situation to clear up and stabilize and hopefully get better before we can properly resume the divestment process. This was not planned.
It's not in our control, but it's still worth mentioning this as a potential low light, so to speak, for 2024. If I put all these words into some concrete numbers, this is basically the key metrics that we delivered for 2024. Energy output increased by more than 30%, as I said, because we had more projects online, but the projects that already existed also delivered more energy. Despite the fact that we basically saw no output from the Puerto Rico project in 2024, the other plants did so well. They overcompensated this so that this increase was possible. As a consequence, of course, revenues are also up. We had such an exceptional fourth quarter, much better than we anticipated, that we actually beat the revenue guidance that we shared in October.
We said that we would try to end up on the higher range of $11.5 million-$12 million. We now ended up at $12.8 million. It's a very good result for us, mainly driven by substantially better than expected performance of the plant in Mexico. That's a good outcome for 2024. Ultimately, especially the operating profit side, of course, we increased profits. We had a lot of, let's say, extraordinary costs in 2023. You know, those are now under control. We improved the performance and the cost structure of a lot of plants so that we didn't just see an increase in absolute terms, but also an improvement of the margin. I think this is the main story for 2024. We had a very good year given the size of our portfolio.
If we drill down a bit deeper into the projects, Mexico and El Salvador, sorry, the two projects that we have, they continue to be the main contributors to revenue and profits. Once Guatemala comes online, the dominance of these two projects as contributors will go down, of course. For now, they're just running very, very smoothly. They're delivering good results. Of course, we're trying to improve the margin in Mexico further, but especially the project in El Salvador has been a delight ever since we started operation. Colombia is a bit of a mixed bag. Yes, we improved margins, especially the trading losses that we had to show in 2023. Energy trading is part of our business there. We have to do it. The spot market played against us in 2023. The situation was better in 2024.
It's not entirely resolved, but at least we were able to display or to record positive operating profit after a heavy loss last year. That overall led to good and solid numbers for the entire portfolio, numbers that we want to beat in 2025, of course. Just briefly again, I mentioned it. We reduced overhead costs in 2024 by 30%, and we now initiated another round of cost reduction measures. In January of 2025, we implemented several steps. The savings that we anticipate will become visible from Q2 onwards. The goal is to save another $1 million on overhead. To lower the spending to $2.6 million, basically, that's another 30%. That is a very ambitious target. We are optimistic that we can deliver once again.
From Q2 onwards, we will see how these measures that we took will ultimately trickle down into the profit and loss statement. The free cash position, given the sale in Puerto Rico, has also improved towards year-end. With the lower cost structure, we have no more capital commitments. We are seeing positive free cash flows from the portfolio that we currently have. The free cash position is already quite okay. It is comfortable. Through project sales and other measures, we will, of course, improve it further. Let's say the risk or the anticipation of some investors, especially in the market, saying, oh, they're running out of money, that risk has been mitigated, and that is certainly not the case. Just to conclude the review, of course, we also have consolidated numbers to report. I do not want to go through the whole table.
The story on the consolidated basis is very much the same. Higher revenues, better operating profits. Group EBITDA is positive. Group EBITA is positive after we had significant losses last year. If you adjust for the significant impairment charges we took, we nearly break even on a group EBIT level. That was ultimately the goal for 2024. We nearly got there. If you compare that to 2023, when we had nearly a $5 million negative adjusted group EBIT, I think the improvement cannot be understated. That is really the message that I want people to take away from this. Yes, we took heavy impairment charges to get rid of the past, to have a solid basis for the future. Operationally, we did a good job. The team did a good job. Which brings me to the outlook for next year.
Naturally, we have clear targets. The two main overreaching targets are we want to continue to improve our liquidity and flexibility. The second thing is that we want to generate positive free cash flows even after factoring in overhead. That is the goal for 2025. To that end, the priorities that we defined are clear. Of course, we need to complete the construction of Guatemala. Guatemala is such a big project. If you look at a full operational year for this plant, you're talking $8 million in revenues. You're talking $6.5 million in operating profits. Even if we see only a half-year output, which we anticipate this year, it's a big impact for our company. It's the largest plant by far. Connecting this project on time, on budget by the middle of this year is a top priority.
At the moment, we have no reason to believe that we cannot do that. Secondly, I already mentioned this. We want to divest our Colombian projects. We already sold a development project that we had for nearly $1 million. The money is partially collected already. The other tranches will be collected later this year. For our joint venture project, we are very far along with a potential buyer in the discussions. Getting to binding terms in the coming weeks is the plan. I said for the other projects, that is unfortunately affected by the security situation. We need to monitor this and see how quickly we can progress with selling the asset. Divesting Colombia, the Colombian projects in 2025 is a top priority, and I'm positive that we can get it done.
I already said we want to further reduce overhead spending, thereby generating positive free cash flows on operation. Positive that we can get that done too. At the end of the day, all of this is, of course, with the target in mind that four years after becoming a public company, four years after raising money and investing it, we need to start returning cash to shareholders. I personally think 2025 is the right year to do this. This is one of the focus areas that we've defined for the year. The construction progress in Guatemala, just a few impressions here. Most of the work, let's say, when it comes to roads, to fencing, to piling, everything that's needed before you start with module installation has basically been done. One third of the modules, as you can see here, has been installed. This is a huge area.
Even the one third that you see here is around 30 hectares. It is a pretty, pretty big site. Everything, all the material is on site. There is no more price risk involved here. There is no more delivery risk for any material. The construction team is doing a great job. Our construction managers are doing a great job. Everything is really working well. The substation that we will connect to, which is right next to the site, is also being built by the offtaker that will ultimately buy our energy. They are also nearly finished. At the moment, there is no indication that we cannot stick to the timelines and to the budgets that we have defined. With San Patricio coming online later this year and with the other projects that we have, this is the outlook that we see.
I want to say that this outlook does not include any contributions at all from Colombia. The two projects we have operational in Colombia, which are still part of the portfolio, which are, of course, generating revenue and profits, are not considered in this forecast because the timeline for selling them is a bit uncertain. We said we would exclude them from the guidance, but we will update that guidance on a quarterly basis and, of course, factor in what they deliver. Even without them, with San Patricio and Guatemala coming online, a significant increase in energy output is anticipated. Even without the two Colombian projects and the project in Puerto Rico that we sold, thanks to Guatemala coming online, we should see similar revenue levels than in 2024.
Because the project has such a much better margin than Colombian projects have or the project in Puerto Rico had, we will also see an improvement, not just in absolute terms on our operating profits, but also on the margin itself. We are finally getting into a range, 70%-80%. That is the plan. That is normal for these kinds of projects. If we then factor in overhead expenses on the reduced basis that we are planning, we will also see a substantially improved group EBITDA of $6 million-$7 million. That is the guidance that we can give at this time. Factoring in normal depreciation and amortization, a positive group EBIT is all but certain for 2025. We are going through the motions. We are divesting what has not worked so well or which is not core.
With the core portfolio that we retain and with Guatemala coming online, all I can say is that in my view, 2025 will be another record year for this company. Michael, with that, I conclude my prepared remarks.
Perfect.
I hand the call back to you. Thank you.
Should we start a little bit on this one to understand that you have energy output going up 20%, but revenue really pretty much in line? Is that some kind of reserve for Colombia actually not producing anything? Is it that your energy prices and what you actually delivered this year with a little bit of top line surprise was higher than expected, any prices you do not expect to go into next year? Just a clarification on that.
Yeah.
The main effect on the energy output is in 2024, we basically saw no output from Puerto Rico, but the project contributed around $1.4 million to the top line. Here you have basically zero energy output, but it was part of the revenue, and that is why you see such a huge increase. That is basically the explanation. If you eliminate what the Colombian project delivered, I think it was around 40 GWh in 2024. The rest of the delta here is Guatemala coming in. On the revenue side, it is the same story. You take out the two Colombian projects, you remove around $3.3 million revenue. You take out Puerto Rico, that is another $1.4 million. Getting back to the same level as 2024 is basically all Guatemala and continued great performance in Mexico and El Salvador.
In Mexico, the power prices that we're generating, they're relatively stable because they're determined in the contract. In El Salvador, we benefit if spot prices go up because we trade to a discount. At least in 2024 and also parts of 2023, prices in El Salvador have been very high, much, much higher than expected, actually. There is no indication at the moment that it will come down.
Perfect. That also explains the value. A bit that can go obvious that you get higher margins in from the Guatemala. That's perfect. Yes. There is a question here. Could you still sell some of the development products you have written down in the future? I think you kind of indicated that Colombia and everything. Is the write-down to try and assess what sales prices potential in the current market condition?
Absolutely.
I mean, we do have, let's say, the projects that we wrote off now, they still exist. We wrote them off and we discontinued them because we don't see that it's worth our effort, that we can actually create that value creation that you're mentioning. That doesn't mean that other developers don't see it. I'm not saying that we will reek in substantial amounts, but our teams are talking to other developers, seeing whether they want to continue the project. Maybe there's no purchase price upfront, but then there can be earn-out structures where you participate if they have success. That is, for example, the case in Jamaica, where we have a bidding package ready. We just didn't participate in the public tender. The next public tender will come. Maybe another developer said, hey, the work that MPC Energy Solutions did is worth it.
I will pay some money for it. Quite frankly, we're not factoring that in. It is a potential upside. I think the main upside comes from actually selling the operational assets.
Yes. The next question, expecting to do more farm downs in 2025. I think you're indicating that a little bit.
Yeah. Definitely the two Colombian projects are on the list. I mean, we have a core portfolio of San Patricio. We have a core portfolio at Guatemala, I mean. We have a core portfolio of Mexico and El Salvador. Three projects that by themselves will deliver very strong results. I would say anything goes from my point of view. There's always interested parties that want to co-invest that want to acquire your projects outright.
At the end of the day, it all comes down to us assessing, is the value greater by retaining the assets or is the value greater now by taking cash for them and then redeploying it or returning it to shareholders? That is what we will ultimately assess on an ongoing basis. I cannot rule out future farm downs, but the priority at the moment is very clear on making sure that we divest Colombia.
Check. There is a question here. The ambition to further reduce overhead spending and return cash to shareholders, is that a sign of less projects to be built in the future?
I think the region has plenty of opportunities to offer. There is a lot of development going on. We also have a pipeline that we could push further.
I think we also need to be clear that if you look at the size of our company and if you look at the portfolio that we have, certain things simply did not work. Certain countries simply did not work. We are trying to make sure that we clean that up. I think we need to strike the right balance. Reducing overhead costs to the size that you actually need to run the portfolio and to do what you set out to do is just prudent. It is just what you do. That is why this is, let's say, to a certain extent, not related to any future plans. For the development side, you do not need substantial resources and money. You can get that done on a small scale, very, very selectively, which is what we are doing.
Returning cash to shareholders, let's say now in the fourth or fifth year after the IPO, that was always the plan. I think especially when we say, look, if we now invest in development, it will take two years or so before we get ready to build again. Just hoarding cash in the meantime is not good for anybody. I think if you start returning part of that cash to shareholders, that's just the job that you have as management of this company.
There's a question. Returning that cash, is share buyback an opportunity with the current share price actually indicating with your current share price and the cash flow, can you actually build something that gives you a higher return than buying back your own share?
Yeah. No, I agree. It's certainly one of the options.
I mean, there's several ways you can start returning money to shareholders. Share buybacks are, of course, especially at the current valuation level, a no-brainer. I also want to say that this will require an approval from the general meeting. If we want to go down that road, we have to ask the shareholders for approval. It will become public knowledge also which path we ultimately choose. It is certainly not only a popular, but also a fairly easy way to get it done. As long as the stock is trading where it's trading now or around or below NOK 10 per share, you're right. It is probably the best investment for our company with the free cash that we have that we've seen compared to 15% or 18% return in projects. This should be much higher.
There is a question. Have the changed U.S.
Political situation and increased uncertainty about green projects in general had any impact on the sentiment in your regions? When you talk to developers, when you talk to farm down potentials, is there any change or is this totally disconnected? It's still about this region needs energy. How do we get that? Or is there some kind of changes on the green side? I think many times you have explained to me that, yes, it's green, but it's actually energy that this region needs. So whether it's green or what it is actually doesn't matter so much here. Does it affect anything, this sentiment change that has been due to the U.S. political situation?
I would say there is no sentiment change. It's, as you say, the countries need energy. They're growing. And they're already getting a substantial portion from renewable energy, but that's mainly hydropower.
Hydropower is in long periods of drought, like we've had in the past two or three years, a problem. They need to diversify the base. They're not diversifying it to fossil fuels because they have very limited own resources when it comes to coal, oil, and gas. They will ultimately have to import it. That's much more expensive than relying on wind energy, on solar PV, and combined with storage. I would say that the dynamics in the region that we operate in, from a logical perspective, shouldn't change. We're not seeing any indication for that. Of course, the political uncertainties and especially the, well, almost daily shift in sentiment that's coming from the U.S., a very, very close trading partner, where we also see, of course, we will have a lot of impact when it comes to the migration policies.
These countries will certainly feel an impact. How that trickles down to our business is difficult to estimate. At the moment, we're not seeing any indication.
This time you haven't published it, and I don't know whether you want to go too much into it, but of course, there have been write-downs on some projects. Is there any major changes to the net asset value projections? You have earlier indicated some kind of a level of that. Of course, some of the projects have been written down, but the interest level has also changed and maybe a little bit better performance in the current projects. Is there any major changes to the net asset value calculation if it's done today than maybe half a year ago?
I would say no.
On the one hand, we have an equity, group equity of around $50 million. That is the book net asset value. That factors in the negative impairment that we've taken, but it doesn't factor in the upside on the value, especially in El Salvador and Guatemala. I would say if I look at the market value for these projects and I look at the book value, there's certainly a difference of around $10 million or so. That's the upside that's not reflected in the books. If you factor that in again, then you're getting very close to the net asset values per share that we've indicated in the past. If you ask me as the one running the company at what valuation at the moment I would sell my shares in the company, the obvious answer is never.
If you were to offer me, let's say, NOK 20-NOK 25 per share, then we're getting into a range where I say today, that's a fair value for what I'm seeing. That is what I mean. I mean, we take all the negative value adjustments, but we do not take the positive value adjustments. That's why the book value of the equity is not a proper indication. It's too low if you look at the real value of the company.
Perfect. I think that was the last question. Thank you, Stefan, for taking us through your results and answering questions and giving us a good indication on what your priorities are for 2025. At least they seem to look shareholder-friendly from my side, analyst side. Thank you, Stefan, for taking us through your results.
Thank you, Michael and your team for taking the time.
Have a good day, everybody.
Have a good day, everybody.
Welcome to today's event, where we have the pleasure to present MPC Energy Solutions. Today's topic, your Q4 results look pretty strong on the projects, but also with some impairments. I think we will dig deeper into what is driving that. Welcome to you, CFO and interim CEO, Stefan Meichsner, who will take us through the presentation and answer questions in the end. Always remember, you're very encouraged to ask questions in the box down below. Do it in Danish. I will try and translate to the best of my ability. Of course, we do this in English. Stefan, I will hand the word over to you now to take us through your presentation.
Thank you so much, Michael. It's good to be back. Good to talk again.
The agenda looks very short, but there is a lot of information to share with the listeners and viewers. Before I begin with that, I would like to just remind everyone who's maybe joining for the first time, not so familiar with our business, who we are. MPC Energy Solutions is a company that was founded four years ago. We are listed on the Oslo Stock Exchange since we started this business. Our business is that of an independent power producer in the renewable energy industry. That means we develop projects, we build projects, we operate power plants long term, we sell clean and affordable energy. We do that in Central America and to a lesser extent in the Caribbean. That is the market that we have chosen for our business setup. The portfolio that we currently have is four projects that are in operation.
These are all solar PV plants, one in Mexico, two in Colombia, one in El Salvador. We have a very big construction project ongoing, a project that is basically the size of our entire portfolio today in Guatemala. We started construction on that earlier last year, and we will connect the plant by the middle of this year. This is a very important project for us, and it's progressing rather well. The portfolio was a little bit bigger last year, but we sold our combined heat and power plant in Puerto Rico. I will get to that later in the presentation. At the end of 2024, now we're down to four years, which brings me to the main part of this presentation, which is a review of 2024. I'd like to issue a small disclaimer. The numbers I'm presenting here are still preliminary.
Historically, and that means unaudited. Historically, there wasn't a lot of difference between the unaudited and audited figures, but I'm just sending this as a disclaimer so that people know the final numbers might change ultimately. What went well last year, what didn't go so well? What went well is that we grew a lot. We showed higher operating profits and also margins. This is in part driven by the fact that we simply had more projects in the portfolio, but the projects that we already had also performed much better. If you look across all the key metrics, energy output, revenue, operating profits, we saw significant increases year-over-year, and the operating margins also improved. On group level, we added to this improvement by significantly reducing overhead costs by 30% compared to 2023. That was the target that we announced before the year.
I'm very happy to report that we actually managed to get there. It required a lot of discipline, but I think it also proves that if we are committed to something, we can deliver on that. If I take out the impairment charges, which we will talk about, as you said, our group EBIT is actually very, very close to break even, which was the goal for 2024, which we just barely missed. We can still be very proud about the operational performance of the projects and about our efforts and implementation of the cost reduction measures. As I said, a clear highlight is also the construction progress in Guatemala. We're currently on time. We're currently in budget. I have some pictures from the site later on.
At the end of the day, we see no reason why we shouldn't be able to connect to the power grid by the middle of this year. We expect the project to contribute to revenues and to profits for at least six months in 2025. Also very important, and we see this as a highlight, is the sale of our combined heat and power plant in Puerto Rico. We acquired the plant a few years ago. From the very beginning, there was always very bad timing. We were simply faced with very low energy demand from the off-taker, who was going through a restructuring process, still is actually. At one point, the question was, do we want to risk losing everything that we invested, or is there a chance to recover part of the investment and not be stuck in courts for years and years?
We decided that a sale was the best option. Ultimately, we recovered $4 million from the sale, which is still substantially below what we originally invested. It is better than, at the end of the day, ending up with nothing. Finally, you alluded to this by saying, you know, we impaired a lot of value. That is true. I see that positively because we cleaned up the balance sheet in the sense that we simply took out asset values that we either considered overstated, where we believe that what we will ultimately recover, for example, when continuing to operate a project or selling it, we cannot recover the original investment. We also had some legacy obligations from projects that we already ended a year or two ago. We discontinued some development projects. All the assets related to these, we simply impaired.
We took them off the balance sheet to have a solid basis starting into 2025 to mitigate the risk of further impairment down the road. A clean balance sheet, I think, is always relevant. That is why we took this step, even though some might look at the net result and say, this was not a good year. I would disagree. I think it was a year of continued transition and transformation. We had solid, good operating results. We have costs under control. We simply took steps to impair values that we no longer saw adequate. On the low lights, of course, the impairment charges related to the project in Puerto Rico, related to Colombia, and also an investment we have in a US Microgrid developer. They, of course, weigh heavily on the overall result. This is a one-time thing. This is a non-cash impairment charge.
I see them relatively relaxed now that it has been done. Something that is not so relaxed, I must admit, is that we are seeing a more volatile security situation at the moment in Colombia, where we have two projects, and one of them, unfortunately, is affected by this. There are some militarized groups that are fighting for dominance over certain areas. At the moment, the plant is not affected. We can operate under normal conditions. Of course, we protect our plant. We protect our people there as much as we can. Presence on site is really limited to the absolute minimum. In these situations, you never know what might happen down the road. We just need to monitor it carefully.
Since we are trying to sell the Colombian projects, as you can imagine, for this particular project, the process is now slower than we expected because it's difficult to travel to the region, to conduct site visits, conduct due diligence. We need to wait for the situation to clear up and stabilize and hopefully get better before we can properly resume the divestment process. This was not planned. It's not in our control. It's still worth mentioning this as a potential low light, so to speak, for 2024. If I put all these words into some concrete numbers, this is basically the key metrics that we delivered for 2024. Energy output increased by more than 30%, as I said, because we had more projects online, but the projects that already existed also delivered more energy.
Despite the fact that we basically saw no output from the Puerto Rico project in 2024, the other plants did so well. They overcompensated this so that this increase was possible. As a consequence, of course, revenues are also up. We had such an exceptional fourth quarter, much better than we anticipated, that we actually beat the revenue guidance that we shared in October. We said that we would try to end up on the higher range of $11.5 million-$12 million. We now ended up at $12.8 million. It's a very good result for us, mainly driven by substantially better than expected performance of the plant in Mexico. That's a good outcome for 2024. Ultimately, especially the operating profit side, of course, we increased profits. We had a lot of, let's say, extraordinary costs in 2023. You know, those are now under control.
We improved the performance and the cost structure of a lot of plants so that we did not just see an increase in absolute terms, but also an improvement of the margin. I think this is the main story for 2024. We had a very good year given the size of our portfolio. If we drill down a bit deeper into the projects, Mexico and El Salvador, sorry, the two projects that we have, they continue to be the main contributors to revenue and profits. Once Guatemala comes online, the dominance of these two projects as contributors will go down, of course. For now, they are just running very, very smoothly. They are delivering good results. Of course, we are trying to improve the margin in Mexico further, but especially the project in El Salvador has been a delight ever since we started operation. Colombia is a bit of a mixed bag.
Yes, we improved margins, especially the trading losses that we had to show in 2023. Energy trading is part of our business there. We have to do it. The spot market played against us in 2023. The situation was better in 2024. It's not entirely resolved, but at least we were able to display or to record positive operating profit after a heavy loss last year. That overall led to good and solid numbers for the entire portfolio, numbers that we want to beat in 2025, of course. Just briefly again, I mentioned it. We reduced overhead costs in 2024 by 30%, and we now initiated another round of cost reduction measures. In January of 2025, we implemented several steps. The savings that we anticipate will become visible from Q2 onwards. The goal is to save another $1 million on overhead.
To lower the spending to $2.6 million, basically, that's another 30%. That is a very ambitious target. We are optimistic that we can deliver once again. From Q2 onwards, we will see how these measures that we took will ultimately trickle down into the profit and loss statement. The free cash position, given the sale in Puerto Rico, has also improved towards year-end. With the lower cost structure, we have no more capital commitments. We are seeing positive free cash flows from the portfolio that we currently have. The free cash position is already quite okay. It's comfortable. Through project sales and other measures, we will, of course, improve it further.
Let's say the risk or the anticipation of some investors, especially in the market, saying, oh, they're running out of money, that risk has been mitigated, and that is certainly not the case. Just to conclude the review, of course, we also have consolidated numbers to report. I don't want to go through the whole table. The story on the consolidated basis is very much the same. Higher revenues, better operating profits. Group EBITDA is positive. Group EBITA is positive after we had significant losses last year. If you adjust for the significant impairment charges we took, we nearly break even on a group EBIT level. That was ultimately the goal for 2024. We nearly got there. If you compare that to 2023, when we had nearly a $5 million negative adjusted group EBIT, I think the improvement cannot be understated.
That is really the message that I want people to take away from this. Yes, we took heavy impairment charges to get rid of the past, to have a solid basis for the future. Operationally, we did a good job. The team did a good job. Which brings me to the outlook for next year. Naturally, we have clear targets. The two main overreaching targets are we want to continue to improve our liquidity and flexibility. The second thing is that we want to generate positive free cash flows even after factoring in overhead. That is the goal for 2025. To that end, the priorities that we defined are clear. Of course, we need to complete the construction of Guatemala. Guatemala is such a big project. If you look at a full operational year for this plant, you're talking $8 million in revenues.
You're talking $6.5 million in operating profits. Even if we see only a half-year output, which we anticipate this year, it's a big impact for our company. It's the largest plant by far. Connecting this project on time, on budget by the middle of this year is a top priority. At the moment, we have no reason to believe that we cannot do that. Secondly, I already mentioned this. We want to divest our Colombian projects. We already sold a development project that we had for nearly $1 million. The money is partially collected already. The other tranches will be collected later this year. For our joint venture project, we are very far along with a potential buyer in the discussions. Getting to binding terms in the coming weeks is the plan.
I said for the other projects that are unfortunately affected by the security situation, we need to monitor this and see how quickly we can progress with selling the asset. Divesting Colombia, the Colombian projects in 2025 is a top priority, and I'm positive that we can get it done. I already said we want to further reduce overhead spending, thereby generating positive free cash flows on operation, positive that we can get that done too. At the end of the day, all of this is, of course, with the target in mind that four years after becoming a public company, four years after raising money and investing it, we need to start returning cash to shareholders. I personally think 2025 is the right year to do this. This is one of the focus areas that we've defined for the year.
The construction progress in Guatemala, just a few impressions here. Most of the work, let's say, when it comes to roads, to fencing, to piling, everything that's needed before you start with module installation has basically been done. One-third of the modules, as you can see here, has been installed. This is a huge area. Even the one-third that you see here is around 30 hectares. It is a pretty, pretty big site. Everything, all the material is on site. There's no more price risk involved here. There's no more delivery risk for any material. The construction team is doing a great job. Our construction managers are doing a great job. Everything is really working well. The substation that we will connect to, which is right next to the site, is also being built by the offtaker that will ultimately buy our energy.
They are also nearly finished. At the moment, there is no indication that we cannot stick to the timelines and to the budgets that we have defined. With San Patricio coming online later this year and with the other projects that we have, this is the outlook that we see. I want to say that this outlook does not include any contributions at all from Colombia. The two projects we have operational in Colombia, which are still part of the portfolio and are, of course, generating revenue and profits, are not considered in this forecast because the timeline for selling them is a bit uncertain. We said we would exclude them from the guidance, but we will update that guidance on a quarterly basis and, of course, factor in what they deliver.
Even without them, with San Patricio and Guatemala coming online, a significant increase in energy output is anticipated. Even without the two Colombian projects and the project in Puerto Rico that we sold, thanks to Guatemala coming online, we should see similar revenue levels than in 2024. Because the project has such a much better margin than Colombian projects have or the project in Puerto Rico had, we will also see an improvement, not just in absolute terms on our operating profits, but also on the margin itself. We are finally getting into a range, 70%-80%. That is the plan. That is normal for these kinds of projects. If we then factor in overhead expenses on the reduced basis that we are planning, we will also see a substantially improved group EBITDA of $6 million-$7 million. That is the guidance that we can give at this time.
Factoring in normal depreciation amortization, a positive group EBIT is all but certain for 2025. We're going through the motions. We're divesting what hasn't worked so well or which is not core. With the core portfolio that we retain and with Guatemala coming online, all I can say is that in my view, 2025 will be another record year for this company. Michael, with that, I conclude my prepared remarks.
Perfect.
I hand the call back to you. Thank you.
Should we start a little bit on this one to understand that you have energy output going up 20%, but revenue really pretty much in line? Is that some kind of reserve for Colombia actually not producing anything?
Is it that your energy prices and what you actually delivered this year with a little bit of top-line surprise was higher than expected, any prices you do not expect to go into next year? Just a clarification on that.
Yeah. The main effect on the energy output is in 2024, we basically saw no output from Puerto Rico, but the project contributed around $1.4 million to the top line. Here you have basically zero energy output, but it was part of the revenue, and that is why you see such a huge increase. That is basically the explanation. If you eliminate what the Colombian project delivered, I think it was around 40 gigawatt hours in 2024. The rest of the delta here is Guatemala coming in. On the revenue side, it is the same story.
You take out the two Colombian projects, you remove around $3.3 million revenue. You take out Puerto Rico, that's another $1.4 million. Getting back to the same level as 2024 is basically all Guatemala and continued great performance in Mexico and El Salvador. In Mexico, the power prices that we're generating, they're relatively stable because they're determined in the contract. In El Salvador, we benefit if spot prices go up because we trade to a discount. At least in 2024 and also parts of 2023, prices in El Salvador have been very high, much, much higher than expected, actually. There is no indication at the moment that it will come down.
Perfect. That also explains the value. A bit that can go obvious that you get higher margins in from the Guatemala. That's perfect. Yes. There is a question here.
Could you still sell some of the development products you have written down in the future? I think you kind of indicated that Colombia and everything. Is the write-down to try and assess what sales price is potential in the current market condition?
Absolutely. I mean, we do have, let's say, the projects that we wrote out now, they still exist. We wrote them off and we discontinued them because we don't see that it's worth our effort, that we can actually create that value creation that you're mentioning. That doesn't mean that other developers don't see it. I'm not saying that we will reek in substantial amounts, but our teams are talking to other developers, seeing whether they want to continue the project. Maybe there's no purchase price upfront, but then there can be earn-out structures where you participate if they have success.
That is, for example, the case in Jamaica, where we have a bidding package ready. We just did not participate in the public tender. The next public tender will come, and maybe another developer said, "Hey, the work that MPC Energy Solutions did is worth it. I will pay some money for it." Quite frankly, we are not factoring that in. It is a potential upside, but I think the main upside comes from actually selling the operational assets.
Yes. The next question, expecting to do more farm downs in 2025. I think you are indicating that a little bit.
Yeah. Definitely the two Colombian projects are on the list. I mean, then we have a core portfolio of San Patricio. We have a core portfolio at Guatemala, I mean. Then we have a core portfolio of Mexico and El Salvador.
Three projects that by themselves will deliver very strong results. I would say anything goes from my point of view. There are always interested parties that want to co-invest, that want to acquire your projects outright. At the end of the day, it all comes down to us assessing, is the value greater by retaining the assets, or is the value greater now by taking cash for them and then redeploying it or returning it to shareholders? That is what we will ultimately assess on an ongoing basis. I cannot rule out future farm downs, but the priority at the moment is very clear on making sure that we divest Colombia.
Check. There is a question here. The ambition to further reduce overhead spending and return cash to shareholders, is that a sign of less projects to be built in the future?
I think the region has plenty of opportunities to offer. There's a lot of development going on. We also have a pipeline that we could push further. I think we also need to be clear that if you look at the size of our company and if you look at the portfolio that we have, certain things simply didn't work. Certain countries simply didn't work. We're trying to make sure that we clean that up. I think we need to strike the right balance. Reducing overhead costs to the size that you actually need to run the portfolio and to do what you set out to do is just prudent. It's just what you do. That's why this is, let's say, to a certain extent, not related to any future plans. For the development side, you don't need substantial resources and money.
You can get that done on a small scale, very, very selectively, which is what we're doing. Returning cash to shareholders, let's say now in the fourth or fifth year after the IPO, that was always the plan. I think especially when we say, "Look, if we now invest in development, it will take two years or so before we get ready to build again." Just hoarding cash in the meantime is not good for anybody. I think if you start returning part of that cash to shareholders, that's just the job that you have as management of this company.
There's a question. Returning that cash, is share buyback an opportunity with the current share price actually indicating with your current share price and the cash flow, can you actually build something that gives you a higher return than buying back your own share?
Yeah.
No, I agree. It's certainly one of the options. I mean, there's several ways you can start returning money to shareholders. Share buybacks are, of course, especially at the current valuation level, a no-brainer. I also want to say that this will require an approval from the general meeting. If we want to go down that road, we have to ask the shareholders for approval. It will become public knowledge also which path we ultimately choose. It's certainly not only a popular, but also a fairly easy way to get it done. As long as the stock is trading where it's trading now, around or below NOK 10 per share, you're right. It is probably the best investment for our company with the free cash that we have that we've seen compared to 15% or 18% return in projects. This should be much higher.
There is a question. Have the changed U.S. political situation and increased uncertainty about green projects in general had any impact on the sentiment in your regions? When you talk to developers, when you talk to farm down potentials, is there any change or is this totally disconnected? It is still about this region needs energy. How do we get that? Is there some kind of changes there on the green side? I think many times you have explained to me that, yes, it is green, but it is actually energy that this region needs. Whether it is green or what it is, actually does not matter so much here. Does it affect anything, this sentiment change that has been due to the U.S. political situation?
I would say there is no sentiment change. As you say, the countries need energy.
They're growing, and they're already getting a substantial portion from renewable energy, but that's mainly hydropower. Hydropower is, in long periods of drought, like we've had in the past two or three years, a problem. They need to diversify the base. They're not diversifying it to fossil fuels because they have very limited own resources when it comes to coal, oil, and gas. They would ultimately have to import it. That's much more expensive than relying on wind energy, on solar PV, and combined with storage. I would say that the dynamics in the region that we operate in, from a logical perspective, shouldn't change. We're not seeing any indication for that.
Of course, the political uncertainties, and especially the, well, almost daily shift in sentiment that's coming from the U.S., a very, very close trading partner, where we also see, of course, we will have a lot of impact when it comes to the migration policies. These countries will certainly feel an impact. How that trickles down to our business is difficult to estimate. At the moment, we're not seeing any indication.
This time you haven't published it, and I don't know whether you want to go too much into it, but of course, there has been write-downs on some projects. Is there any major changes to the net asset value projections? You have earlier indicated some kind of a level of that.
Of course, some of the projects have been written down, but the interest level has also changed and maybe a little bit better performance in the current projects. Is there any major changes to the net asset value calculation if it's done today than maybe half a year ago?
I would say no. On the one hand, we have a group equity of around $50 million. That is the book net asset value. That factors in the negative impairment that we've taken, but it doesn't factor in the upside on the value, especially in El Salvador and Guatemala. I would say if I look at the market value for these projects and I look at the book value, there's certainly a difference of around $10 million or so. That's the upside that's not reflected in the books.
If you factor that in again, then you're getting very close to the net asset values per share that we've indicated in the past. If you ask me as the one running the company at what valuation at the moment, I would sell my shares in the company. The obvious answer is never. If you were to offer me, let's say, NOK 20-NOK 25 per share, then we're getting into a range where, say, today, that's a fair value for what I'm seeing. That is what I mean. I mean, we take all the negative value adjustments, but we do not take the positive value adjustments. Positive value adjustments. That's why the book value of the equity is not a proper indication. It's too low if you look at the real value of the company.
Perfect. I think that was the last question.
Thank you, Stefan, for taking us through your results and answering questions and giving us a good indication on what your priorities are for 2025. At least they seem to look shareholder-friendly from my side, analyst side. Thank you, Stefan, for taking us through your results.
Thank you, Michael and your team, for taking the time. Have a good day, everybody.
Have a good day, everybody.