Good morning and welcome to our fourth quarter presentation. Today we will take you through another strong quarter for Scatec, and I will also quickly reflect on 2024. We leave a year of strong progress and profitable growth behind. The fourth quarter has also been eventful, and I'm pleased to say that we have delivered strong financial results. We have achieved important growth milestones, increasing our backlog and our pipeline, and we have continued to optimize our portfolio through divestments and refinancing of our projects, mainly in the Philippines. All of this enabling us to continue to progress on our self-funded growth plan. I will start by taking you through some of the highlights, both of the quarter and 2024, and then Hans Jakob will take you through the financials. So 2024 has been a year of significant progress in implementing our strategy.
We are building a solid foundation for further profitable growth, and I'm really proud of the achievements of our team during the year. First of all, our total proportionate EBITDA has increased by 22% relative to 2023, and it came in at NOK 4.7 billion. This is driven by the Philippines, where we have had very strong financial results during the year from the ancillary services market. It is also driven by increased production, mainly from the new plants that have come into operation during the year, and also it is driven by successful divestments with strong gain on the sales that we have made, then we have also, during the year, built strong visibility of profitable near-term growth, and we are maturing our backlog and pipeline.
We currently have 2.7 GW of attractive projects under construction and in the backlog, and this will be connected to the grid over the coming years, and this is a 73% increase relative to the same figure one year before. We have also reduced our net corporate debt by NOK 1 million based on proceeds from sales of assets and also refinancing of projects, and as said, 70% of our proceeds from our divestments will be used against bringing down the corporate debt level, so in sum, a good year for Scatec, and I'm also really excited about what we are seeing for 2025. We have a strong pipeline of projects that we expect to bring to backlog and into construction during the year, and 90% of this growth pipeline is related to our core market, while we will continue to look for also opportunistic growth outside these core markets.
And further, we will continue to optimize our portfolio and repay corporate debt over time based on the proceeds that we are getting from our divestments. Then in terms of our market, the fundamentals for renewables have continued to strengthen during 2024. We have seen significant price drops both on solar PV modules as well as on battery storage systems during the year. And as a matter of fact, module prices have come down by 66% over the last two years, and battery prices have come down by 58% over the last two years. And these reductions, they are driven by overcapacity in the value chain, increased scale in general in the industry, as well as technology developments and innovations. And as we currently see that supply throughout the value chain, both related to modules as well as related to batteries, will continue to exceed demand.
We expect that the prices for these components will continue to stay low going forward. And this means that renewables is and will be more competitive in the markets where we are operating and is the most competitive source of energy in these markets. And we will continue to look for ways of capitalizing on these low prices as we continue to realize the projects that we currently have both in construction, in backlog, as well as in our pipeline. Then in terms of the highlights for the quarter, I'm pleased to say that this was a good quarter with strong financial results. We delivered proportionate revenues of NOK 2.7 billion and an EBITDA of NOK 1.4 billion , both significantly up relative to the same quarter last year in the range of 70%. Our projects under construction are progressing well, and we now have an underlying gross margin of 12%.
And also with earning revenues of NOK 1 billion in the D&C segment during the quarter, we show that we have a very high activity level, and it's the highest activity level since third quarter 2023 in the segment. Then in terms of growth, during the quarter, we started construction of 305 MW. This includes the 142 MW solar project in Brazil, the 103 MW BESS project, Mogobe, in South Africa, as well as 60 MW in Botswana. The 60 MW in Botswana is the second phase of the Mmadinare solar complex, where we started the first phase about a year ago. And then we are also growing our backlog, and we were recently awarded a 20-year PPA in South Africa of 288 MW. This is related to the seventh round of the REIPPPP in South Africa.
We have also recently been awarded a 15-year contract for difference in Romania, and this is related to a 190 MW project. So based on this, we have also significantly increased our backlog with 478 MW. Further, we reduced also our net corporate debt by NOK 1 billion during the quarter. This has mainly been driven by proceeds from closing the farm down in South Africa and the refinancing in the Philippines. And part of this was then used to repay the $72 million which we previously have drawn under the RCF. Finally, today, we also announced the contemplated NOK 1 billion bond issue. We intend to use the proceeds of this in addition to cash that we have to repay the remaining EUR 140 million bond, which is maturing later this year. This will extend the maturity profile and enhance our financial flexibility on our balance sheet.
Then in terms of power production, our O&M teams are doing a great job, and we continue to see high availability and good operational performance in our power plants. This quarter, we delivered a significant production increase of 48% to 1.1 TWh . This is mainly driven by production from the new plants that have come into operation during the year, and it's also based on improved hydrology in the Philippines. Our power production EBITDA grew substantially to NOK 1.35 billion. This is compared to NOK 726 million last year, adjusted for divestments. The increase here was also mainly related to the production from the new assets and also related to improved financials in the Philippines. But in addition to that, it was also related to a sales gain of NOK 380 million coming from the second phase of the farm down in South Africa.
Let me then go and explain some of the details in the Philippines. In the Philippines, net revenues increased to NOK 390 million. This is driven by increased volumes and ancillary services. The production volume increased by 77% to 285 GWh , and this is due to more favorable hydrology during the quarter. Ancillary services revenues increased to NOK 205 million as we delivered higher volumes under our ancillary services contract, as well as we benefited from the reopening of the reserves market in the country. Notably, the addition of Magat BESS contributed in the ancillary services market by NOK 30 million. This has been an attractive investment for us, and we are looking for opportunities to further increase our capacity to sell into the ancillary services market.
As a result of this, EBITDA increased by 85% to NOK 332 million , and this is in line with our guided range for the quarter. We are still waiting for the approval of the regulatory commission of the higher ancillary services prices that was awarded in the tender in 2023, and for the time being, we continue to recognize revenues based on the old contract value. We have also, as you will see, continued to reduce our contract volumes in the Philippines. They are now for the quarter at 124 GWh , and we will continue to not enter into new contracts related to the business in the Philippines, and as we will see existing contracts expiring, we will continue to reduce the volumes here, and we also believe that with this volume level, we are well prepared for the upcoming dry season.
Let us then move into projects under construction. We currently have projects under construction in four countries: in South Africa, in Tunisia, in Botswana, and in Brazil. With the addition of the latest projects that were put into construction, we now have 767 MW in construction. This also includes a small project of 9 MW in Release. The projects are all progressing well and delivering strong financial results. We have recognized NOK 1 billion in revenues in the D&C segment this quarter, and the gross margin is 12%, and this is at the higher end of our range. The total remaining EPC contract value amounts to NOK 3.4 billion, and our total committed equity investments related to these projects are NOK 948 million. We have then also a short video to show the high activity level that we have in terms of construction in our business.
Here we are starting with Grootfontein, where you will see we are more or less finished the substation. The buildings are more or less finished, and you will also see that panel installation is mostly finished. So this project is close to finalization. Here in Botswana is from the second phase that has just started, and here you will see that we are working on the foundations for also here for the substation that we have cleared the land and that we are ready to start on the civil works and to install modules. Then in terms of Brazil, here we are at the early stage, and you will see we are working on the buildings, clearing the site, as well as working on the civil works for the project and getting ready.
Similarly, in Sidi Bouzid and Tozeur in Tunisia, you will see that the stage is more or less at the same level, focusing on civil works, clearing the site, as well as erecting the buildings. Finally, just a picture also of Kenhardt. This is what it looks like when it's done. This project has now been operating for a year, performing excellently as one of the largest hybrid projects globally. Let us continue and move into growth. In terms of growth, we continue to mature our pipeline and have achieved several significant milestones since our last presentation. We have started construction, as said, in Botswana and in Brazil, demonstrating our ability to secure attractive financing and generate strong returns by applying our integrated business model.
In South Africa, we continue to leverage our strong local presence by securing another 288 MW solar PV project, and this was from the seventh REIPPPP round, and this is part, as you know, of the official government tender processes. Finally, we are very excited to have been awarded a 15-year contract for difference in Romania related to a 190 MW project. We see Romania as an attractive market. They have high ambitions in terms of the green transition, in terms of implementing renewable energy. They have strong support from the EU in terms of the programs that they are currently developing. There is good access to land and grid, and from that point of view, we also see that our strength and our business model is working and functioning very well in Romania.
The tender where we were awarded was the first part of a 5 GW CfD program in Romania, with the rest expected to be tendered during 2025. And Romania is a good match with our business model and strength, and we see further opportunities in this market going forward. So including these projects, we now have 0.8 GW or 800 MW in construction and 1.9 GW in our backlog. The projects under construction will be connected and start construction during 2025 and 2026. And our projects in backlog are expected to start construction over the next 12 months, and I'm sure that they will keep our construction team very busy. Notably, we also have two very large and mature projects in Egypt here in our backlog, and the activity level in this country will be high going forward.
Here we also have further projects in the pipeline, and these are progressing well, and we will come back to these projects later in the year. All in all, this represents a strong visibility of near-term and attractive growth for us. We are committed to deliver on this, and it will increase our operating base when all of this has been installed to 6.9 GW or close to 7 GW all in all. As you will see on the right-hand side of this slide, about 70% of this is related to solar, while 20% still remains within hydro. Then also to continue to ensure that we have the basis to continue our growth trajectory. Over time, you will also see that we have a very attractive pipeline of 10 GW, as depicted here on the left-hand side of this slide.
2025 will be a busy year, and we're proud to see that so many attractive opportunities materialize. It's driven by the strong fundamentals of the renewable energy sector currently, but also driven by the capabilities and the persistent work of our teams throughout our markets. Importantly, we will continue to be disciplined, and we are committed to our hurdle rates, and these projects will generate strong returns. We have strict value creation criteria, and all the projects we move forward with are meeting our hurdle rates. We estimate that these projects will generate an average equity IRR of 15% from power production and related to services. Further, we do see an uplift related to D&C margins, the gross margins from our EPC business, that will add 15% uplift when it comes to the return.
This means that on an integrated basis, we are expecting that this pipeline, the 2.7 GW that we are talking about, will provide a return of 30%. Then importantly also, when these projects are being moved into operation, we will continue to look for opportunities to enhance the value creation, both through refinancing as well as through asset rotation. Then finally, taking a step back, Scatec's mission is improving our future. And at the same time as we are driving value creation, we are also focused on having a positive impact on stakeholders and on the environment. And we have a long track record here, and as we enter 2025, again, I want to draw your attention to some of the key achievements that we have in this area. So since Scatec was established, we have realized 5.8 GW of renewable energy capacity.
The projects that we have realized and that we are operating have contributed to the avoidance of 24 million tons of greenhouse gases. We are now generating enough energy annually to power 11 million households in the regions where we operate. Related to our projects, we have created 22,000 direct jobs. Okay, so a lot of these jobs are construction jobs, but it's still so that we take unskilled labor, we train them, and we enable them also to have better job opportunities in the future. On top of this, there are ripple effects in the local communities, and on an indirect basis, our projects are generating significantly more jobs and also economic development locally. Finally, and importantly, we have invested more than $22 million in local communities.
These are investments that are typically going into education, to building schools, into healthcare, supporting medical support locally in the regions. And we are also mainly focusing on women and children related to these activities. So these are achievements that we are very proud of. They're important to us. They're an important part of our purpose, and I think it's also important for our motivation and the motivation of our employees to go the extra mile in terms of succeeding with our projects and succeeding with our business and our mission. And with that, I will hand over to Hans Jakob to take us through the financials.
Thank you, Terje. Good to be here, and thank you for attending. So now let me go through the financials. We reported total proportionate revenues of NOK 2.7 billion. This is up NOK 1.1 billion compared to the same quarter last year.
Revenues from power production was NOK 1.6 billion, mainly driven by new projects in operation, the strong performance in the Philippines, and gain from sale. In the same quarter last year, we reported revenues of just over NOK 1 billion in the power production segment. Our power production EBITDA was NOK 1.35 billion, up from NOK 824 million last year, including gain from sales. The cash flow to equity from power production ended at NOK 1.1 billion. This includes proceeds from both phases of the South African transaction, which were received during the quarter, and the refinancing in the Philippines. Development and construction reported revenues of NOK 1 billion compared to NOK 532 million last year, with a solid margin of 12%. Our D&C EBITDA was NOK 51 million, and the total proportionate EBIT increased to NOK 1 billion compared to NOK 463 million in the same quarter last year. Now the consolidated financials for the quarter.
We delivered total consolidated revenues of close to NOK 1.2 billion, slightly higher than last year if we exclude gain from sale of assets. Key contributions come from new projects in operation and strong results in the Philippines. Excluding the gain of sales of NOK 532 million in 2023, the EBITDA is in line with the last year of NOK 816 million. EBIT was NOK 521 million compared to NOK 571 million last year, excluding sale of assets, and the net profit in the quarter was -NOK 101 million, which is NOK 141 million to Scatec. For the full year, we reported total proportionate revenues of NOK 7.9 billion compared to NOK 12.4 billion year on year due to significant construction activities in 2023, as you can see on the left-hand side. Revenues from power production was NOK 5.5 billion, which is NOK 1.4 billion higher than last year, mainly driven by new plants in operations and sales gains.
Our power production EBITDA was NOK 4.6 billion. This is a 39% increase from last year, and cash flow to equity from power production was NOK 2.4 billion, and the development construction revenues reached NOK 2.3 billion with a solid margin of 19%. This also includes a contingency release of NOK 187 million from Kenhardt in the first half of last year. Adjusting for the release, we still achieved a gross margin of more than 11%. Our D&C EBITDA was NOK 184 million, and the total proportionate EBIT increased to NOK 4.7 billion compared to NOK 3.8 billion last year. If you look at the consolidated financials for the full year 2024, we see that we delivered total consolidated revenues of close to NOK 6.6 billion, an increase of close to 40% from last year. Key contributions are moving Kenhardt to operations, the strong results in the Philippines and Ukraine, as well as a solid gain from divestments.
The EBITDA increased to NOK 5.4 billion compared to NOK 3.6 billion last year. And if you exclude the gain from sales, the EBITDA ended at NOK 3.9 billion compared to NOK 2.3 billion last year. The EBIT was NOK 4.1 billion compared to NOK 2.6 billion. And finally, the net profit for the full year was NOK 1.5 billion compared to, well, of this, NOK 1.3 billion was to Scatec. This slide has a strong message saying that at the end of the quarter, we had NOK 3.7 billion of available liquidity, including an un-drawn RCF. This is an increase by NOK 1.6 billion. We received NOK 853 million in distribution from power plants, including NOK 154 million from refinancing in the Philippines. We had NOK 580 million in positive working capital movements, mostly related to our construction activities. We received NOK 523 million in proceeds from the announced transaction in South Africa.
We invested NOK 338 million in growth projects, paid NOK 167 million of interest, and we repaid $72 million, which were drawn on our RCF. As we repaid our RCF, the available capacity under the RCF increased, as you see on the right-hand side of the graph, increasing our available liquidity. For the full year, we received NOK 1.8 billion in distributions from power plants. We invested NOK 782 million in growth projects and paid a total of NOK 1.7 billion in interest and repayments on our corporate debt. That's a good segue to the next. Our total net interest-bearing debt is basically unchanged from the last quarter, at NOK 22 billion . However, we repaid corporate debt and drawn more new project debt. We drew approximately NOK 600 million in new non-recourse project debt for projects in construction, mainly Grootfontein and Mogobe, and we also increased the debt in the Philippines.
The net corporate debt was reduced by NOK 1 billion due to the repayment of our revolving credit facility and increased cash. Here you can see the maturity profile on our corporate debt, and we remain committed to paying our corporate debt. We announced today that we are contemplating to issue a NOK 1 billion bond, which will extend our debt maturity profile and enhance our financial flexibility. We will use the proceeds from the issue and available cash to buy back the remaining 114 million EUR from the green bond maturing this year, leaving no major maturities until 2027. We're starting the year with an update and an outlook for 2025. So these are the updated estimates. For the full year 2025, we expect a proportionate power production between 4.1 and 4.5 TWh . This is expected to generate an EBITDA from power production between NOK 3.75 billion and NOK 4.05 billion .
The EBITDA estimate for the year reflects a P50 production for all assets. Estimated contributions from projects under construction in South Africa, Botswana, and Tunisia. Approval of the higher prices on our long-term ancillary services contract in the Philippines with retroactive settlement from startup of the contracts in September 2023. The unsettled amount was NOK 160 million at the end of the fourth quarter. We have further included contribution from Uganda and Vietnam, which are held for sale for the first quarter of 2025, in line with our guided timeline for closing. We have, however, not included any gain from sales. This will be adjusted for when we close the transactions. The power production for the first quarter is estimated at 900-1,000 GWh .
In the Philippines, we estimate an EBITDA in the range of NOK 170million-NOK 230 million in the first quarter, based on normal hydrology and prices in line with the fourth quarter last year. In D&C, we have a remaining contract value, as Terje said, of NOK 3.4 billion after inclusion of the second phase of Botswana and Urucuia in Brazil. We also maintain our expected margin of 10-12% for projects under construction and in backlog. Finally, we estimate our corporate EBITDA for the full year 2025 to be between NOK 115 million and NOK 125 million. And then I leave it to you, Terje, to take us through the summary.
Thank you, Hans Jakob. So in terms of a very quick summary before we go to the questions, the quarter represents strong financial performance, NOK 2.7 billion in proportionate revenues and NOK 1.4 billion in proportionate EBITDA.
We are continuing to build a solid platform for further growth. We have now 2.9 GW in backlog and under construction. And in addition to that, we also have 10 GW in pipeline that forms the basis for growth also beyond those 2.7 GW. And those 2.7 GW will bring us to a total operating base of close to 7 GW when those are being brought into operation. And then finally, and also as Hans Jakob has said, we will continue to focus on deleveraging and bringing down the debt on our corporate balance sheet. And we are committed to using in the range, or at least 75% of what we get in proceeds from divestments in bringing down the corporate debt level. And in Q4, we reduced our net corporate debt by 1 billion. Thank you very much. Then we will open for questions.
Okay, thank you, Terje.
Thank you, Hans Jakob. Let's just start with, there's a lot of people here. So let's start with some questions from the room, and then we take questions from our online listeners. Any questions here? Just raise your hand. Thank you.
Andreas Nygård, Nordea , Romania, the return profile, what does that look like? You're owning more than in other projects, and you're doing less EPC. The first one, that's a quite small project, but there might come more. How should we think about the potential new projects to arise from Romania and the split in ownership and your EPC share?
Yeah, now in Romania, I mean, first of all, we're still absolutely meeting our hurdle rates in terms of 1.2 times cost of equity related to the project. We are having a part of the EPC, but not the total EPC.
So also there, we are ensuring to get at least 8%-10% of margin on the D&C side, which is according to our guidance, and having good margins also on the services segment. So in total, if you think about the integrated IRR, obviously it's not going to be as high as if we have 100% of the EPC and if we have less ownership stake. But in terms of the equity IRR and in terms of the margins on our business, it's still absolutely meeting our hurdle rates.
And if you continue with more projects in Romania, will we see the same split, or are you potentially getting more EPC share if there comes anything more?
It's absolutely, I mean, this is the first project in Romania, so this is also a project where we will learn in terms of the local market.
So assuming that there's coming more projects in Romania, it's also likely that we potentially will take a larger part of the EPC. And potentially also over time, we will also look for other partnership opportunities related to this portfolio.
Okay, super. And one more, if I may. Once fully invested with the current backlog and what you have under construction, could you give a flavor on what the total cash flow to equity from power production would be in a run rate state with what you have right now? I don't know if you have that.
We haven't provided that guiding. We have only said what the cash flow to equity is currently in the last quarter. So it was a strong one. And I assume you want to see for trends in development. We have to come back to that.
Okay, thank you.
Okay, any further questions?
Anders Rosenlund, SEB.
Thank you. I have a couple of questions. Firstly, on the sale of hydropower assets in Africa or the Uganda transaction, will that trigger a gain?
I think we've responded to that question previously. If the price, which we have not announced yet, would not cover our current book values, then we would have already been needed to indicate an impairment on that book value. Because then we would have a price indication, which would be below book.
So unless it's exactly what you have in your books, it will not trigger a gain.
That would be the implication, yeah. Exactly.
Good, good. Next question. The hydropower, sorry, the hydrogen plant in Egypt, where you have indicated a final investment decision in H1. Is that still the case?
That is still the case.
As we've said before, this is a project that has secured 20-year offtake of the end product of the ammonia. It was secured based on the tender in Germany, the H2 Global tender. The offtaker for the first seven years is Germany in principle. Then beyond that, Fertiglobe will take the remaining 20 years of the offtake. The remaining part of that project to get it to financial close is putting together the financing and finalizing the engineering for the project.
In connection with that project, you will also indicate that you will do an electrolyzer supplier selection because there's supposed to be a third-party partner in that project. How is that progress?
We have already selected the electrolyzer supplier.
Okay, but that has not been disclosed?
That has not been disclosed.
Okay. Can you disclose who it is?
Not now.
Okay.
I'm allowed to ask. Absolutely. The NOK 3.4 billion of contract backlog, that split that goes through 2026, I assume, given the construction indications. Could you split the NOK 3.4 billion roughly between 2025 and 2026?
I don't know if you have done that.
I think typically you should assume that the projects that they bring into construction, when they start construction, will take between 12 and 18 months in terms of construction. The one project that has longer construction time due to when it's going to be interconnected is the BESS project that we have already started and moved into construction.
But given your comments about the S-shaped curve on the revenue recognition, is it fair to assume that the majority of the NOK 3.4 billion will be revenue recognized in 2025?
I think it's fair to assume that more will be in 2025 than in 2026, yes.
Okay, thank you.
Thank you, Anders. Any further questions from the room here? Okay, then we will move on to our online listeners. We have a couple of questions from Thomas Næss, SpareBank 1 Markets. Have you included any Ukraine EBITDA in the guidance?
Yes, we have. We have included Ukraine in the guidance. It's based on our experience from 2022, 2023, and 2024. Obviously, we have to remember that in 2024, we also had some reversals of credit losses, which contributed to the numbers in 2024.
Should we now assume both Uganda and Vietnam sales are completed by end Q1, as you have removed both from our guidance post Q1?
Yeah, we have assumed in our guidance that we will close by the end of Q1. Our previous guidance stands that we will close it within the first half. But Q1 is a good midpoint.
Okay, we have one question from Jørgen Lande, Danske Bank. Good morning. On the growth, is it fair to expect that Romania and South Africa, the two new projects, will start construction before the two mature projects in Egypt? And can you give an update on the remaining milestones on Egyptian projects? Partly has obviously been answered already.
I think it's in terms of the new projects in the backlog, so South Africa and Romania. When these projects move into backlog, it's fair to assume that it takes six to 12 months to bring them into construction. So that's a typical timeline for projects. And I think it also is an indication also for these new two projects. In terms of the projects in Egypt, they are in structuring, as we call it.
So that means that we're working on finalizing some small remaining development activities, permits, that we are in the financing process, as well as preparing to start construction with finalizing the design and ensuring that we have the contractors in place. So that is moving forward as planned.
Okay, and as of now, we have one last question from Anis Zgaya from ODDO BHF. Your strategy is to focus on four countries. Why do you now continue to be active in, for example, Tunisia and Romania?
Yeah, it's important to emphasize that we have four core markets, but we will continue to be opportunistic in markets outside those four when we see that there are attractive opportunities.
And attractive opportunities where we see that there are also growth opportunities, growth potential in the market, and where we see that our integrated model is well adapted to succeed and capture value in those markets. So we will not exclude markets beyond those four markets. We will continue to be opportunistic and pursue attractive and sizable opportunities outside those markets. But again, as we've said, and what we expect is still, which is also represented in terms of our pipeline and backlog, in the range of 80% of our business will in the future also be in our core markets.
Okay, there was no further questions here. So with that, we thank you all for listening and see you next time.
Thank you very much. Thank you.