Been a very strong start of 2025 for Scatec, and financially we have also had a strong first quarter. We have made significant progress in the quarter towards our strategic ambitions. We have and we continue to grow renewables within our core areas, and we also continue to progress well in terms of optimizing our portfolio and bringing down corporate debt on an overall level. I will, as usually, start with an overall summary, and then Hans Jakob will take us through the financials. Let us first start with the highlights of the quarter. Firstly, as I said, we've had a very strong financial quarter with NOK 2.4 billion in revenues on a proportionate basis and NOK 1.4 billion in EBITDA. These are figures that are significantly up relative to the same quarter last year. Secondly, we currently have 4.2 GW in backlog and in construction.
This is an all-time high number and enables us to have significant construction activity going forward and also enables us to double our operating capacity over the next couple of years. Finally, we have also made significant progress on optimizing our portfolio, and we are now having a corporate net debt, interest-bearing debt of NOK 5.2 billion. This is based on proceeds from the investments, as well as a very strong cash position in the company. Let me also mention the fact that we have issued a new green bond during the quarter of NOK 1.25 billion at very attractive terms. We have used the proceeds from this bond, including our available cash position, to also pay down our Eurobond. Through this, we have significantly improved the maturity profile of our debt on corporate level.
I would like to thank our investors for the confidence that they are putting in us related to this. Altogether, this puts us in a very robust position in terms of exercising and realizing our growth portfolio, even in the current turbulent times that we are seeing in the capital market. Also on that note, let me comment on what is going on globally in terms of tariff discussions and tariff negotiations. I would like to say that Scatec and our growth portfolio, we see no direct impact on our growth portfolio in terms of those tariff negotiations that are currently ongoing. Let me then move to power production. We continue to see high availability and stable operations across our portfolio of operating assets. I think that our O&M teams, they are doing a stellar job in keeping this up.
Power production for the quarter reached 979 GWh , and this is up from 901 GWh , same quarter last year. If you adjust from the investments, up from 811 GWh , and this is a 21% increase then in power production. This is partly driven by the positive contributions from our new projects that have come into operation. We have Botswana that came into operation during the first quarter this year. We also had Brazil and Pakistan coming into operation in the first quarter last year. All of these projects have contributed positively to the increase in power generation. In addition, we have also had very good hydrology in Laos and the Philippines that has also contributed positively to our power generation. The strong production has contributed to a 72% increase in our revenues in the power production segment.
We are now reaching just about NOK 1.6 billion in total revenues. This has been driven by strong performance, obviously, across the portfolio. We have also seen accounting gains related to the investments of Uganda and of Vietnam. We are also seeing a very strong quarter in the Philippines, which I will come back to. In addition to that, we have also seen a one-off payment from a tariff true-up in Pakistan. We have also seen other net positive movements. Let me then talk about the Philippines. The Philippines delivered an exceptional quarter, both in terms of power production and ancillary services, and also in terms of financial contribution. In the Philippines, we reached a power production of 149 GWh , which is in principle a doubling or close to a doubling of power generation relative to the same quarter the year before.
This is due to strong hydrology. We had good water levels when we came into the quarter, and we have also had good water inflows during the quarter to contribute to this. Also, please notice in terms of this quarter, despite being in the dry season, we have a long energy position. This is obviously partly due to the fact that we have very strong generation, but also partly due to the fact that we have reduced our contract portfolio in the Philippines, which is then putting us in a more robust position in terms of the dry season in the Philippines. Net revenues in the Philippines increased by 2.8x , now reaching NOK 320 million in the quarter. We see that we have strong contributions both from power sales as well as from ancillary services.
This again shows the strategic value of the flexible position that we have with hydropower and with batteries in the Philippines. Further, ancillary services revenues reached NOK 224 million, and batteries are now playing an important role in the revenue generation that we're having in the Philippines. We see that batteries are outcompeting hydropower in terms of the short response ancillary services market. On the back of this, we continue to develop and build out more battery capacity in the country. In terms of EBITDA, this increased then to NOK 270 million, which is an increase by 3.6x . Overall, this quarter highlights the earnings potential of the Philippines, and particularly the growing contribution from the ancillary services segment and also from batteries. Let me then move to construction.
We are growing our portfolio, and we currently have close to 2 GW of projects in construction. This is really an all-time high for Scatec. Since the last reporting, we have added three new projects to our construction portfolio. We have the 1.1 GW solar a nd 100 MW battery project Oblisk in Egypt. In addition, we have two battery projects in the Philippines. While these two projects are merely 56 MW, they will represent a tripling of our battery capacity in the Philippines. This is significantly improving our position in terms of the ancillary services market going forward. In total, we now have a construction portfolio that is spanning six different countries. We have South Africa, where we have Grootfontein, which is now nearing completion, and we expect to put into operation during Q2 this year.
We also have the Mogoba battery project that is now progressing well in terms of construction. In addition, we have Botswana, where we took phase one into operation in the first quarter. We are now also well underway with constructing the second phase in Botswana, another 60 MW project. Construction is also further progressing well in Brazil, Tunisia, and the Philippines. We expect all of these projects to come into operation during the first half of 2026. Finally, we have the Oblisk project in Egypt that I just mentioned. This is a 1.1 GW project with 100 MW of battery capacity. It is being implemented on an accelerated schedule, and we aim to get the first half of the solar capacity plus the batteries into operation first half next year and the second phase into operation during the second half next year.
I think that the breadth of our construction portfolio is obviously showing, and it's a result of the development approach, the solid development approach and activities that we've had over the last couple of years. When these projects are being brought into operation during 2026, we will reach more than 6 GW in operational capacity. I will now zoom out a bit and talk about sort of the overall growth profile. We continue to expand our near-term growth platform. In addition to the 2 GW that I have currently talked about in construction, we also have 2.2 GW in backlog. We have, since the start of the year, added 1.5 GW into the backlog, which is a significant number.
In addition to the Romania project that we talked about during the first quarter or Q4 reporting, we have also now added 120 MW, where we have signed the PPA in Tunisia, which is doubling our potential capacity in Tunisia. Tunisia is emerging as a very interesting market for us. We have also signed a 1.1 GW PPA with Egypt Aluminium. This is a very interesting project. It is the first corporate PPA in Egypt. It is being backed by Sovereign Guarantee. Egypt Aluminium is the largest electricity consumer in Egypt. It is also the largest CO2 emitter in Egypt. This is a very important project in terms of industrial decarbonization in the country. We will implement this portfolio based on our integrated model.
Let me also then add some comments in terms of how we capture value and also in terms of how we manage working capital of this portfolio going forward. Our growth is underpinned by a strong EPC revenue model and also limited equity exposure, enabling us to scale through a self-funded model without overstretching our balance sheet. On the left side here, you see our construction portfolio, which I have already talked about. It has an EPC revenue value of about NOK 9.2 billion. The remaining contract value related to this portfolio is NOK 6.7 billion. In addition, you will see that in terms of the backlog, we also have about NOK 9.3 billion in EPC revenue value linked into that portfolio.
In total, with these projects together, we are seeing a remaining EPC value related to backlog and construction of about NOK 16 billion. In terms of the backlog, you will see that three of these projects, they are expected to reach financial close by the end of 2025. Among these three projects, you will also see our Egypt Green Hydrogen project, where we now expect financial close rather in the second half, as we see that the structuring and the financing of this project is taking more time than what we have previously communicated. For a full near-term growth portfolio, for all of these projects, we are expecting to realize a gross margin in a range of 10-12%. This margin generated from our construction is key to our strategic strategy of capital efficient growth.
This is funding a large part of the equity injections that we will put into these projects. Also, on the top right side here, you will see that we will continue to implement this, obviously, based on an S-curve. All projects will have slower revenue recognition during the first and the last parts of the construction period. They will have a more aggressive revenue recognition during the middle part of the construction period. Importantly, we strive to obtain and maintain positive working capital during the construction period, as we are illustrated at the bottom right here, by trying to get milestone payments under the EPC contract in the beginning of the construction period and then push out payments to suppliers and to contractors towards the end of the construction period. As you understand now, we have a transformative period ahead of us.
We will implement this and all this portfolio as part of our self-funded growth plan. You will see that we have high construction activity now for the next two to three years. We aim to implement this whole portfolio by the end of 2027, which means that by the end of 2027, we target to double our operating portfolio. With that, I will hand it over to Hans Jakob to take you through the financials.
Thank you, Terje, and thank you for coming and listening to Scatec today. We present strong results across the group, driven by the higher power production, the high DNC activity, and gains from divestments. I'll walk you through the group financials and the performance of our operating segments, and I'll also cover the improved capital structure and strategic progress.
Starting with the group level performance, the strong results in the first quarter are backed by consolidated revenues, significantly up 42% to NOK 1.8 billion. EBITDA, NOK 1.5 billion, up 48%. To the right, you see the proportionate financials. Revenues increased by 95% to NOK 2.4 billion, while EBITDA grew by 63% to NOK 1.4 billion. The increase was mainly driven by higher power production, especially in the Philippines. The divestment gains and our proportionate figure also reflect the high DNC activity in the quarter. Our power production segment delivered another strong quarter. The revenues reached NOK 1.6 billion, up 53% from the same quarter last year, and the EBITDA was NOK 1.4 billion, a 60% increase year- on- year. As mentioned, the growth was mainly driven by the Philippines and the divestment gains.
On a 12-month rolling basis, the segment has delivered more than NOK 6 billion in revenues and NOK 5.2 billion in EBITDA, underlying the strength of the cash flow in our portfolio. Overall, we are very pleased with the value generated from our operating assets. In our development and construction segment, activity levels continued to increase. Proportionate revenues of NOK 751 million and EBITDA of NOK 26 million. In this segment, the quarterly performance shows variability pending on project phasing. The trend from the last 12 months confirmed the long-term strength and scalability of our DNC platform. It gives a clearer picture of the strong momentum we are building. Over the past year, DNC revenues have reached NOK 2.9 billion, with a steady increase over the last three quarters, and we aim to continue. Keep in mind that the 12-month rolling figures from Q1 last year include the very busy construction period of 2023.
The rolling EBITDA ended up at NOK 202 million, with contribution from high-margin projects and disciplined cost control. The increasing trend reflects higher activity levels across several geographies. With a strong backlog moving into construction, we expect DNC to remain a key engine of our continued profitable growth. At the end of the quarter, we had an all-time high available liquidity of NOK 5 billion. This was impacted by significant divestment proceeds, and it has continued to strengthen. In total, the liquidity, including earned drawn RCF, increased by NOK 1.2 billion. Let me explain some of the main movements. We received NOK 155 million in distribution from power plants, NOK 2 billion in net proceeds from announced transactions. We invested net NOK 214 million in growth projects and paid NOK 391 million of interest and debt repayments. Additionally, we have increased our RCF by $50 million to $230 million after the reporting date.
In total, we now have close to NOK 5.5 billion in available liquidity. We continue to strengthen our capital structure. Net corporate debt was reduced to NOK 5.2 billion from NOK 7 billion in Q4. The reduction was mainly driven by cash received from divestments. The cash position and net interest-bearing debt will vary over time, dependent on cash movements. We also repaid NOK 240 million of debt in combination of regular amortization and true refinancing. On project level, the net debt decreased to NOK 13.4 billion, down from NOK 14.9 billion, and this was primarily due to the removal of debt from divestments of the Uganda and Vietnam projects. We also report a NOK 200 million net increase of debt related to projects under construction. These reductions reflect our continued commitment to capital efficiency and balance sheet strength. They position us well to finance growth without increasing corporate leverage.
Now, let me look at the progress on divestments and deleverage. We have set out a clear strategy to rotate assets and reduce corporate debt. We are targeting to self-fund our growth while strengthening the capital structure by 2027. In the strategic update last year, you might recall that we specified divestment proceeds of minimum NOK 4 billion, of which 75% would be used for debt repayments. I'm pleased to say that we have come quite far already. Since the Q3 last year, we have generated NOK 2.6 billion in proceeds from asset divestments, including transactions in Uganda, Vietnam, and South Africa. This demonstrates both the market's appetite for our assets and our ability to execute divestments timely. As a result of these divestments, our net corporate debt is down by NOK 2.9 billion since the Q3 last year. We are on track to deliver on our 2027 targets.
Here you can see the debt maturity profile of the corporate debt following the transactions in the quarter. In the quarter, we took further steps to extend and optimize our corporate debt profile. We successfully placed a four-year NOK 1.25 billion green bond with a margin of three-month NIBOR plus 315 basis points with the help and support of our core banks. This reflects the credit market's confidence in our ability to continue to deliver strong operational and financial results in the future. These proceeds from the bond, together with the existing liquidity, were used to repay the EUR 114 million bond, and we have repaid or refinanced all major short-term debt. We have our next large maturity in 2027. Overall, we have a well-structured and extended maturity schedule with solid headroom to support growth and navigate market volatility. Let me share the outlook for 2025.
For the full year, we estimate a power production between 4,100 and 4,500 GWh , unchanged from last quarter. We have, however, increased our expected full year 2025 EBITDA midpoint by NOK 400 million. The range of NOK 4,150 million-4,450 million for the power production segment is what we guide on. The update is driven by divestment proceeds, overperformance in the quarter, and partly offset by negative FX effects. For the second quarter, we expect a total power production between 900 GWh and 1,000 GWh , EBITDA in the Philippines of NOK 180 million-220 million based on normal hydrology and strong contribution from ancillary services. In our DNC segment, we currently have a remaining contract value, as Terje said, of NOK 6.7 billion, and we keep a gross margin guidance of 10%-12% on average across portfolio for projects under construction and in backlog.
For corporate, we expect a full year EBITDA of NOK 115 million-NOK 125 million negative, in line with previous guidance. These estimates reflect a strong base for operating assets, high construction activity, and in line with the previous guidance. A good start of the year, positioning us well for reaching our 2025 targets. I welcome Terje to do the quick summary.
Yeah, in summary, Q1, we've had very strong financial results. This is contributed to strong power production, good progress on our divestment plans, and we also have very good DNC activity level and progress there. In terms of the growth part, we are now seeing that we have a portfolio, a near-term growth portfolio linked to backlog and construction that is set to double our operating capital. Double our operating capacity in a 2027 perspective.
Finally, we are progressing well in terms of optimizing the portfolio, and that activity with the divesting activities, refinancing activities, is strengthening our balances, enabling us to take down corporate debt now to NOK 5.2 billion. We also have a liquidity position, as Hans Jakob talked about, of NOK 5 billion, including the recent increase in the RCF, NOK 5.5 billion. All of this enables us and puts us in a good position to continue to implement and push forward with our self-funded growth plan. Thank you. We open up for Q&A.
Thank you, Terje. Yes, we will then open up for questions. We will start with questions in the room, and then we have some online questions as well. Andreas from Nordea, would you like to start?
Maybe you need some microphone. Yeah. Andreas, if you just repeat the questions he says.
Okay. I'll do this.
Okay, Andreas, now you go Nordea. Now you're heading into 2025, a lot of things under construction, I think activity will be at peak ever, it looks like. Do you see any reason why that should not continue into 2027, that you will be able to continue adding backlog for construction into 2027 in a way that actually keeps the activity level at the same level or higher than 2026?
I can get the microphone. Yeah, so I mean, 2027 is obviously our current sort of near-term planning horizon. As we said, we currently have NOK 16 billion in remaining EPC contract value related to the projects we have in construction and in backlog. That will take us also well into 2027 in terms of construction activity. Looking at 2027 and beyond, I think you also then should look at what we have in pipeline.
We still have close to 9 GW of projects in pipeline. It is a good diversification between solar, between wind batteries, and also green hydrogen. As you said, there is no reason why we will not be able to continue to convert new projects from pipeline into backlog and into construction. It is still so that renewable energy is the most competitive source of electricity, not only on an intermittent basis, but also as a baseload and capacity energy in most, if not all, of the countries that we operate in. The competitiveness of renewable is only going to continue to improve as costs come down and as we see technology development and scaling up within this industry.
Thomas .
Thank you, and congratulations on a good quarter.
You've previously talked about the price increases on the long-term ancillary service contracts in the Philippines, and you've also talked about the opportunity the spot ancillary service market in the Philippines gives you. The outperformance this quarter, is that the price increase on the longer-term contracts, or is it playing in the spot market? You mentioned batteries, so yeah.
Yeah, so approximately, I think that in terms of the ancillary services market, in terms of the market, it's about 50/50 contracts and spot market or reserves market, as we call it. Price variations is what we see in the spot market, while obviously the contract market, there the prices are fixed. What we're seeing, what we've seen in Q1, is that we had had price volatility in the spot market and that with batteries, we've been able to capture high prices in that part of the segment.
This was the case last year. What I was going to ask is, do you think this is a kind of an add-on revenue service that we will see more of? Last year you were a bit more reluctant on saying that this is going to maintain a feature and explanation.
Just adding the hydrology that we commented on as well. The two of them are the main explanation for this quarter. I think it is harder to predict the hydrology. Remember, last year was quite a soft one in a 10-year perspective. Maybe this is more normal, but we still remain optimistic on ancillary services as we commented on. Both of them are important for this quarter.
I think it is difficult to say something firm about the longer term.
I mean, if you continue to see extremely attractive prices, there will be built out more capacity. It will normalize over time. We continue to see that batteries are very competitive in the short response segment or part of this market. We believe that it's going to be possible to capture good value in that segment going forward. That's obviously also why we are now building out 56 MW in addition. We are developing and looking at doing even more batteries in the future.
[Distorted Audio].
We need to use the mic. The audience can't hear.
Yeah. I'm using the mic. Great to see so much activity as well, but we're seeing quite substantial construction in non-core markets. You're also completing projects in non-core markets. Could you shed some color on what the plan is for those projects in non-core markets?
Will you hold on to them, or are you planning to divest them?
Yeah, in terms of what we're doing in the non-core markets, I think a general comment on non-core market is that we are only looking at markets where we believe there is a fundamental strong position, competitive position of renewables, and that there is a clear opportunity for significant renewables build-out over time based on renewables being the most competitive technology based on an agenda of energy transition and also based on a general need for increasing electricity generation in the countries. Even though these are emerging markets where we have a bit of a more opportunistic perspective, if we see that we're able to build out scale in those markets, then it's not necessarily so that we will sell and divest those projects.
If we see that these markets are changing and we do not see an opportunity to build out scale, then over time it is natural that we will look at possibilities of divesting those projects.
Thank you.
On corporate net debt, you are now at NOK 5.2 billion. You are not corporate, but the overhead net debt, you are now at NOK 5.2 billion. If you are to double your asset base, does that mean that you are comfortable doubling the holdco net debt as well, or will net debt on corporate level remain roughly where it is going forward? Could you give us some guidance on that?
Maybe a short answer to that. As we said, the net debt will vary with cash movements, but we have no plans to increase the corporate debt. Adding new activity will be on project level, non-recourse. That is the profile. We are not adding corporate debt.
We're still committed to what we have already said, target of NOK 4 billion in divestments and using 75% of that to pay down corporate debt in a 2027 perspective. Okay, any more questions from the audience here? Thomas, has anyone?
Yeah, I'll add one more. I just thought it was fine to pass the microphone. In terms of the equity investment target of NOK 750 million, obviously, I suppose that's maybe an average over some years. I suppose it's fair to assume a bit more in 2025 and 2026, or am I mistaken?
Yeah, I can start, and you can fill me in, Terje, with color, but I think you're absolutely right. We said NOK 750 million to 2027 as an average to give a pointer on our best estimates and also to nurture the discipline that we are progressing. If we go above, we will have to explain it.
When we wrap up the year, we will explain where we landed and where we are in this plan. That is a natural follow-up. On the direct question, is there a risk that we will go above this year? Yes, for commercial reasons. That is why we deliberately said this is an average for the three-year strategy period, basically.
One final. You are obviously guiding on the EPC gross margins of around 10%-12%, and then I suppose that is excluding any contingencies. You are closing in on Grootfontein, and you have some construction activity ongoing. CapEx levels are remaining at low levels. Is it fair to assume that we can see more contingencies?
That one is so hard. I need to list.
Obviously not on the projects that you have not started on constructing, but on the projects that have progressed.
In the past, we have said very clearly that, at least I have been very impressed by the DNC organization. One thing is to lay out a plan, include a contingency, and not use them. This is a disciplinary act on many moving parts, many players in an integrated approach of delivery. If you can do that again, there will be more milk and honey. I guess that is the backing of your question, as happened with Kennard. We cannot say that upfront. We always comment on it when it happens. Strong margins backed by, and then we explain.
Okay, thank you.
It seems like you have done a lot of right things the last year or two. Debt is down. You have reignited growth. You have successfully constructed things on time, on budget, and released contingencies.
Everything seems to be moving in the right direction, and it seems like the equity market at least is agreeing today. What are the concerns right now? What are you worried about? Where can you step wrong?
It's not necessarily about where we can step wrong, but I mean, it's about we need to continue to be very disciplined in terms of what we do. We need to be disciplined in terms of what projects we are moving forward, making sure that they are attractive from an economic point of view, making sure that we are not moving projects forward that in this current situation is too marginal. We need to continue to have a very, very strong focus, as Hans Jakob said, on EPC execution. I mean, we have the largest EPC execution program that we have ever had in Scatec.
We're looking at six different countries, 2 GW. Obviously, it's incredibly important for us to also have high focus on making sure that we are doing that in a good way.
These are internal risks, but external risks, what are you worried about externally?
No, I think sort of while renewable energy is becoming more and more competitive in the markets where we operate as an energy source, I mean, there is still competition out there. We still sort of have to address that competition and make sure that we are able to capture good projects that are competitive in the countries where we operate and putting us in strong competitive positions when we are securing offtake and trying to get offtake for our projects.
In terms of the geopolitical situation and the trade discussions going on politically, we are not so concerned given that we do not have operations in the U.S. in terms of what is coming from the U.S. There are obviously also potentially changes that are happening on a country-by-country level in terms of changing regulations. That is going to be important for us, watching closely going forward. Obviously, we have a special attention as Scatec for Ukraine and the geopolitical situation and the war going on in Ukraine. That is as much on the people side, on the moral side, as well as it is from a business point of view. Okay, thank you.
We will take a couple of questions from our online listener. We have two questions from Anis Zgaya from ODDO BHF. Could you please update us on current best CapEx level per megawatt hours?
Yeah, obviously, we will not share any specific BESS capacity numbers. I think we are in our data sheet. We are sharing the CapEx levels of the projects that we're doing also within BESS. For instance, the Mogoba BESS project in South Africa. So those numbers are available. It should also be noted that implementation of a BESS project in terms of CapEx will be very different country from country and also relative to what services you provide, whether you just provide load shifting or if you also provide other types of grid stabilization types of services. On a general note, I can still say that we have seen battery CapEx coming down significantly over the last couple of years. Over the last two years, I think we've seen a reduction in CapEx on the batteries themselves in sort of a 60%-70% range. Thank you.
Another one from Anis. What changed your mind about the attractiveness of the Tunisian market?
The economics of our projects, I would say. Obviously, the first project that we are now implementing, and we've been very clear on that, we are implementing these together with Toyota, which is a very strong partner and based on the climate funding, which is being provided by Japan. This is something that we are seeing that we are able to replicate in Tunisia. Based on that climate funding, we are able to continue to be competitive in that market. I would say Tunisia has an aggressive ambition in terms of converting towards renewable energy, green energy, become more independent in terms of energy and electricity supply. This is obviously also something which is fueling opportunity growth in the market, and that's why we are interested in the market.
I see one question regarding proceeds from divestments. Do the NOK 4 billion in targeted accumulated proceeds include farm downs in Egypt?
No, I mean, the NOK 4 billion that we have been talking about, those are related to divestments in non-core market. I think that's what we have indicated, and that's also what sort of in terms of our plans are included in that figure.
Thank you. One question from Tammy Suleiman from Barclays. What are your expectations for hydrology in the Philippines and Laos for the rest of 2025?
That was actually commented on. Normal hydrology for the remainder of the year, but still strong contributions in the Philippines from Ancillary Services, particularly commenting on the second quarter as we normally do.
Yeah, and obviously that is also reflected in our guidance when it comes to the full year.
In the Philippines, there we provide guidance obviously on a shorter-term basis. It is obviously also important that when we talk about the full year in terms of guidance, we have included the catch-up in terms of the ancillary services contract prices, where we have seen that there has been a positive decision in the Energy Regulatory Committee in the Philippines, but the decision has not been formalized and issued yet.
These are the ASP revenues, PHP 200 million, which is not included in Q2, but is included for the full year guidance.
Okay, we have no more questions online either. I think with that, we will just say thank you for listening and the presentation.