Welcome to the Eolus Q1 report for 2023. For the first part of the conference call, participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing star five on their telephone keypad. I will hand the conference over to the speakers, CEO Per Witalisson and CFO Catharina Persson. Please go ahead.
Welcome to Eolus presentation of the Q1 report. I'm Per Witalisson, CEO of Eolus, and presenting is also Catharina Persson, our CFO. For the Q1, we had net revenues of SEK 277 million. The largest part of the revenues came from the remaining revenues and the cost have been accounted for the Øyfjellet project in the quarter. The remaining parts mainly come from milestone payments from the American battery storage project CALD and the sales of shares in the Latvian offshore project Kurzeme. We had a net loss of SEK 15 million in the quarter.
That is mainly due to that there were no new major sale of projects executed in Q1, and also a low increase in degree of completion for the projects under construction. That is according to plan due to the winter season and that more or less all civil works were already completed before the year end. Of course, that we had no margin contribution from the Øyfjellet projects. We had a significant growth of our portfolio in Q1. We added net around 2.6 gigawatts to the portfolio, and that was mainly due to addition of offshore wind projects. The annual general meeting will be held tomorrow, Friday, May 12th.
The board has proposed a dividend of 1.5 SEK per share. Eolus is a developer of the renewable projects. We develop projects, we sell them, and we construct on behalf of investors. We then operate them also on the behalf of our customers, both technically and commercially. Since we're not aiming to own operating assets and construction is mainly financed by our customers, that implies a asset-light business model. We've been more than 30 years in the industry, and everything we do is based on that experience. We have so far constructed more than 700 wind turbines.
We have 1.1 gigawatts of under asset management, and the management and the portfolio has now increased to 24.55 gigawatts. We have an expansive business plan until 2024, where we are expanding in all our markets and in all our technologies, and therefore investing heavily in both people and projects. We develop renewable projects with a technology that serves the needs of the specific market in the best way. It is onshore wind, offshore wind, Solar PV, and energy storage, mainly battery storage. Going forward, we will see more and more combinations of these technologies.
We're active in the Nordics, the Baltics, Poland, and in the U.S. During this quarter, we have also added an early-stage joint venture project in Spain to the portfolio. During the quarter, we were able to declare completion on the Norwegian Øyfjellet Wind project. The project was taken over by our customer, Øyfjellet Wind. In Q1, we have accounted for the estimated remaining revenues and costs from the project, it hasn't affected the earnings. There are still some financial conditions to be finally settled between the parties, we do not expect any significant future impact from the project, neither positive or negative.
The wind farm, it's 72 turbines, 400 MW with an annual production of 1.3 TWh and with a long-term PPA with Alcoa, who has a large aluminum meltery in the city of Mo i Rana. This project has enabled them to do significant investments in their meltery and created a lot of new jobs in the area. During the quarter, we also invited the German developer PNE to co-develop the offshore wind project Kurzeme in Latvia together with us. We have sold 50% of the shares in the project, and we are developing it further together too.
That is for strategic reasons to increase the chances of success for the project to partner up. I mentioned that we have also signed an agreement for a joint project with a local partner in Spain with the aim to develop at least 500 megawatt hybrid project. It's in early phase, 120 kilometers north of Alicante. It will be developed as a combination of solar and wind projects, and with a potential capacity up to 750 megawatts at a maximum. Our U.S. business is developing in a good way.
We received a milestone payment for the CALD battery storage project during the quarter. The next major e-event is that we expect to achieve next milestone payment from the large solar and battery storage project in Arizona. It's a project that we have developed. We sold it last autumn. We received an initial payment of $12 million. Total purchase price is estimated in a range between $104 million and $190 million with a high margin for Eolus since we are not having any cost of goods to our profit and loss sheet. We have sold the product rights.
We will get paid as certain milestones are achieved and during the project. In the report, we also write that we expect to also sell another stand-alone battery storage project in the U.S. during 2023. This side of the business is significantly boosted by the Inflation Reduction Act and the changes to the U.S. energy system that will bring. That's definitely a lot of interest to invest in projects and renewables, and there is a lack of currently, a lack of projects. There Eolus is very good, in a very good position since we've been in the markets since 2015. We have proven ourselves.
We have built OneWind projects, built and sold, and we have developed and sold one standalone battery project and this combined battery and solar project in Arizona. After the end of the quarter, we've also announced that we have invited the Port of Gothenburg to invest in our Västvind offshore project outside of Gothenburg. This is really a strategic partner for the project. The area are already today importing a lot of its electricity. It has a huge deficit of electricity, so it's importing from neighboring region.
The Port of Gothenburg will become an energy hub and center for manufacture and of hydrogen and e-fuels for maritime traffic. We see large interest from industrial co-consumers for the offshore projects for them to supply their needs in the future. Just today, we also announced an agreement with the Finnish landowner Finnsilva, where we get access to land from them. It's one of the Finland's largest land owners. It's an incident agreement that gives us possibilities to develop projects with a potential for plus 600 megawatts on their land. We will lease the land from them.
We will develop and realize the projects. This is in projects then in early phase, but Finland is really one of the most attractive markets in the Nordic countries, both currently and for the coming decade. Turning to construction, we currently have 61 turbines under construction in Sweden. In total, it's 385 megawatts. All of them will be constructed completed during 2023. Our aim is also to hand over all of them during 2023 to our customers. All civil works and grid works has been completed for all these projects.
Turbine deliveries have just started to to the most southern project Åsenskog. It will continue and start with deliveries to the other projects in the upcoming weeks. It will be very intense construction season this year for the Eolus projects. Looking at at sales, we are in the sales process for the projects Skallberget, Utterberget, Tjärnäs, Åsenskog. We it's 125 megawatts. They are under construction, expected to be completed, as I said, during 2023. We expect to close the sales process during Q2.
Next in line is also the Swedish projects, Fågelås, Bua, and Dållebo, where we are now initializing the sales process, and we expect to co-complete that during 2023. These are projects that will be constructed and completed during mainly 2025. I've already mentioned the next battery energy storage in U.S., the Pome project. It's 100 MW project. It's a project in size quite comparable to the Cald projects.
We estimate to sell that project during 2023, and that project should be completed by the end of 2024. The being at the crossroad of the mega trends of the electrification and the sustainability, of course, political influence is important. There's a lot of debate going on in many countries. The industry and consumers are screaming for more electricity at affordable prices, of course. In Sweden, there's been a commission that has presented a report for increased for development of new wind powers.
Another commission to investigate how to make permitting of offshore wind projects more efficient and streamlined. We welcome both these initiatives, it's really important to speed up. In Sweden, the target is to reach 300 terawatt-hours of electricity production until 2045. That means, in practice, taking into account the facilities that will be phased out, that we need to add 10 terawatt-hours of new production net each year from now until 2045. It's important that both the industry, authorities, and government really has a system perspective on this and is ready to act now.
In Poland, there's been an amendment to the 10H rule that specified a minimum distance to dwellings corresponding to at least 10 times the height of the wind turbines. That had a very negative impact on the possibilities to build modern wind turbines. That rule has now been changed and limited to a minimum distance of 700 meters. This is a positive change. We've been in the Polish market for two years and developed the both wind and solar projects. With this, having this in the mind that this rule would be loosened up sooner or later.
This gives us very good possibilities to develop very much needed modern wind onshore projects in Poland. Our offshore portfolio is growing. Definitely a lot of offshore projects will be needed to meet the requirements to increase the electricity production as much as needed in the decades to come. Eolus' portfolio is spread geographically between Sweden, Finland, and Latvia. Regarding to in Sweden, we have projects both in the territorial waters that are closest to the shore and further out in the economic zone. The permitting processes are different for depending on where the projects are located.
The projects in closer to the coast have often the advantage of being cheaper, it's closer to the sea, shorter cables, more shallow water, for instance. You need approvals also from the local municipalities for those projects. Those projects can definitely produce electricity at the lowest costs for all offshore projects. With all in all nine projects in early development in Sweden and Finland, and we expect to hand in between two and four permit applications during 2023. As also a subsequent e-event, we have also started the public consultation project process for our Swedish album project. That will be added to the portfolio in Q2.
Looking at our total portfolio, it's 24.5 gigawatts. We now have more than one third being offshore projects, one third being onshore projects, and the remaining third being PV and battery storage projects. We'll definitely see a lot of combinations of these projects, technologies. The portfolio has grown with about 10% during the quarter. As you can see on the map, we've added the project in Spain that I mentioned before.
We have 800 MW in late stage development, and we are co-communicating about these projects in all our quarterly presentations and at our website to create visibility about what you can expect from Eolus in the near or midterm future. We expect to add significantly numbers to the late stage portfolio in the coming quarters. We move to the financial figures. I hand over to Catharina.
Thank you, Per, and hi, everyone. As Per has said, we have had rather low activities because of the winter season in our ongoing constructions, just as planned. But high activities overall regarding investments in the project portfolio and in people and also with the ongoing sales process for Skallberget, Utterberget, Skärnes, and Åsenskog . I will go through the figures for Eolus first quarter for you. We had a net sales of 277 million SEK. It decreased with 155 million SEK in comparison with the corresponding period last year. Wind farm Edfället has reached final completion at the end of first quarter and was handed over to the customer.
The last 5% to reach in total 100% completion has been recognized during the quarter, the project remaining estimated revenue and expenses were recognized in the first quarter without impact on earnings. Eolus does not expect any future significant impact from that project. When it comes to construction management agreement reg``arding Storfällfremn, it's included in the net sale according to the current degree of completion, and it was 2%. That's a low activity due to the winter's month, just as we planned for. Another milestone was reached for development of the battery storage project, CALD, in U.S. and has affected the revenue and the margin for quarter one. Operating profit was -SEK 12 million and is a result from the quarter with low activities in the projects that are under construction.
Also since we did not make any major project sales beyond the share in Kurzeme. In comparison with the Q1 last year, the operating profit has improved from minus SEK 159 million. Cost increases due to delays and quality problems regarding Edfället affected the margin in Q1 last year downwards. Expenses for Eolus Group are higher than in same period last year, and the increases according to plan due to the ongoing expansion. Net sales financial item for Q1 was 0, and last year we had a net financial item of minus SEK 1 million. We had in total net loss for the period of minus SEK 15 million, which is SEK 23 million improvement from last year.
I also want to mention or highlight Eolus' net profit of 239 SEK in rolling 12 months, and that includes the period from first of April 2022 until end of March 2023. Also mention that we are having fluctuations in the business between the quarters, which affect, of course, the results in the quarters and sometimes also between the years. If we go to the balance sheet, we had total fixed assets amounted to 109 million SEK compared to 65 SEK end quarter last year. Inventories and work in progress was 860 million SEK, and advanced payments to suppliers have increased during the quarter, and the sum of these is in line with end Q1 last year. These items include ongoing constructions.
Cash of SEK 476 million end of March. Total assets amounts to SEK 1,951 million. We had a total equity of SEK 1,030 million, and interest-bearing liabilities of SEK 421 million. If we look at key figures, we have net sales for Q1, divided into the two segments. The first one, product development, with a net sale of SEK 270 million and operating profit of minus SEK 14 million. For next segment as asset management, we had net sales for SEK 7 million and an operating profit of SEK 2 million. Loss per share for this quarter was SEK 0.65 compared to SEK 5.55 last year for Q1.
Equity per share about 39 SEK, and we had net cash of 55 million SEK, and that has decreased due to the growing of the project portfolio and also the ongoing construction of the wind farms of 125 million, 125 MW, where the selling process is ongoing. For the financial year 2022, the board of directors proposes a dividend of 1.50 SEK per shares, equal as the dividend last year. The decision for this will be made at the annual meeting tomorrow in Hässleholm. We're still ramping up number of employees to match the project portfolio and reach the targets in our business plan for 2022 to 2024. We have average number of employees for the quarter of 97 people.
The order backlog, SEK 1.1 billion. We had asset management assignments of 822 MW. Eolus has such a strong balance sheet with equity-weight asset ratio of 53%. We have a solid ground and a strong foundation. Return of equity after tax was 13%. Projects under construction and degree of completion, you can see it on the right side of the slide. 394 MW were under construction quarter end this year. Only project Storfällfremn had a degree of completion of 2% for the quarter and in total 29 according to the plan. That means that we have another 71% to account for before Storfällfremn is completed as we, as expected, late 2023.
The rest of the projects besides Storfällfremn amounts to 134 MW and are categorized as under construction. Revenue recognition will start when agreements with customers is signed and when predefined construction milestones are achieved. I hand over to Per again.
Thank you, Catharina. Summon up, we had a growth of the portfolio of the 10% during the quarter. The offshore portfolio is developing well and reached 10 gigawatts. The American solar battery projects are progressing well. For the project in Arizona, we're expecting next milestone, significant milestone during the summer. We've entered into the cooperation agreements both in Finland and in Spain, which add have and will add more than 1 gigawatt of early-stage projects to the portfolio. The sales processes for Skallberget, Utterberget, Skärnes and Åsenskog are ongoing and estimated to be finalized during Q2.
Up next is the sale of Boarp, Dållebo, Fågelås, and the American project Pome, all to be sold during 2023. We're in a with a solid position, growing project portfolio and a strong organization. I think we're in very good position for the continued expansion and profitability. Thank you all, and we open up for questions.
If you wish to ask a question, please dial star five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial star five again on your telephone keypad. Please state your name and company. Please go ahead.
Yes. Hi, this is Örjan Rödén at Erik Penser Bank. I'm, I would like to know about your project in Arizona. Where are the risks related to the milestones? How comfortable are you that you will meet the milestones? Also, when we look at Stor-Skälsjön, are you still very confident that the project, calculations, the project margins are where you expect them, expected them to be, let's say, when you started the project? Thank you.
Yes. Thank you, Örjan. When it comes to the project in Arizona, yes, there are defined milestones for in the agreement. We haven't disclosed the specific milestones, but of course, normally it's tied to maybe grid connection agreement, financial investment decision, and co-completion of co-construction. That could be a fair assumption. When it comes to both Stor-Skälsjön and the other projects under construction, yes, they are on time. Most of the project contracts are fixed project contracts. We are confident that we can realize them in a good way.
The moment of truth, of course, comes now when the start of the turbine, with the start of turbine, delivers.
Okay. Thank you very much.
The next question comes from Olof Cederholm from ABG Sundal Collier. Please go ahead.
Hi, it's Olof with ABG. I have a couple of questions. Maybe, hopefully my last question about the Øyfjellet. Can you talk about, you mentioned potential financial impacts that are lingering. You say they won't be significant, but what is your definition of significant then? It would be interesting to know if we start there.
Yeah. Yes. more than 20 million SEK up or down would be significant, I would.
Okay
I would say.
Cool. That's good. The sales processes that are ongoing at the moment, of the 125 megawatts, they've actually been going on for more than a year. I'm wondering, what is taking time to sell these projects?
To start with, there were some technical issues with the grid connection that was sorted out during the autumn. After that, we have restarted the process again. It's the portfolio has definitely got a high attention, and we're on good track to close this now.
Okay. Do you sense any difference in interest in projects in general now compared to maybe a year ago when we had a different interest rate situation and maybe also more worries about higher electricity prices than what we have now?
Yes, we definitely see a wider range of the bids coming in, than we have seen for many years. That is probably mainly due to the different views on long-term power prices, and interest rates, cost inflation. We see a difference also in investors, what access to the credit markets they have.
Thank you. My last question is about your geographic exposure. You're expanding into new regions, obviously you've been in the U.S. for a while, but still there are new regions within the U.S. You have Spain, you have, you know, different type of countries. How are you working with your organization to handle this and the potential risks that come from working in new countries and environments? There, of course, you have a background in Sweden and etcetera, can you talk a little bit about that, how you handle the risks and if you will continue to expand your organization significantly from here? Thank you.
Yes. It is important for us to be diversified, both over technologies and over markets to reduce specific country risks over time since development processes are that long. We are strengthening the organization continuously. We have one of our goals to enter into one new market during 2024. The project in Spain should not be seen as a market introduction, but as a good opportunity that we for with local partnerships where we could contribute substantially. When it comes to organization, we've strengthened it with Christer Hansen joining as Chief Commercial Officer. He will also head the market strategy function for instance.
In all markets, you really need boots on the ground, local knowledge, local competence with the players that has been both developing, constructing, and hopefully also selling projects.
Okay. Thank you very much. I appreciate it.
Thanks.
As a reminder, if you wish to ask a question, please dial star 5 on your telephone keypad. There are no more questions at this time, I hand the conference back to the speakers for any written messages or closing comments.
Yes, we have a couple of questions in the chat as well. Erika Eliasson is asking about our approach to assigning advanced status to development projects in the company's pay pipeline. It is that permits should have received approval at least in first instance. Permits, depending on market, they can be appealed, they can be appealed in several instances, but at least they should be approved in the first instance. There should be a clear path to grid co-connection, and at our gateway checkpoints, the project should have passed as commercially viable.
We have a question from Linus Johansson about the estimated value of the entire portfolio. We haven't given any guidance about that. I will recommend the analysis from ABG and Erik Penser Bank, for instance. Magnus Sjöblom is asking what was the net result from the start to the final for Øyfjellet. We don't comment on specific project margins. It definitely was a positive accumulated project margin for the projects. Okay. That was all questions in the chat. Thank you all for listening in. Wish you all a nice day. Bye.
Thank you, and bye.