Welcome all to the presentation of the Eolus Q2 report. I'm Per Witalisson, CEO, and with me, I have also Catharina Persson, our CFO. We are very happy to sum up record strong quarter for Eolus, where we reached the net sales of more than SEK 1.7 billion, and with a net profit of SEK 422 million. That means that we had earnings per share close to SEK 17 .
We're also in a very good financial position, I would say, where the equity to asset ratio increased to 58%, with a net cash position amounting to SEK 870 million , which equals roughly SEK 25 per share. This strong result essentially comes from two events that took place, and they were communicated during the quarter. The first one is the sale of the Swedish wind projects, Skallberget, Utterberget, Tjärnäs, and Rosenskog to the Swiss utility BKW. We had both revenues from sales of the projects and also revenues from the construction management agreement that we entered into.
These projects are, as communicated before, quite advanced, and they are planned to be taken into operation and finally handed over to the customers during 2023. The second important thing was the large milestone payments that we received for the U.S. solar and battery project Centennial Flats, where we reached an important milestone payment. So just a quick introduction to Eolus. We're the developer of renewable energy in Europe and the United States. We develop projects from greenfield, we sell them, we construct and operate on behalf of the investors. So the main idea is not to be a utility or producer of electricity, but to be the developer of projects.
We're active in the Nordic countries, in the Baltics, and Poland, and in the US. We've been in business since 1990, so more than 30 years of experience and more than 700 wind turbines constructed. We also have an asset management team which currently has more than 800 MW of operating assets under their management, technically and commercially. Technology-wise, we're working with the techniques that serves the markets and the purpose best. So we're obviously in onshore wind.
Offshore wind is an increasing part of our long-term portfolio, and the solar PV projects and battery storage projects are increasing in significance, significance, and we have also in July decided to invest in a new battery storage project in the US. I'll come back to that later. And as you know, listed at the Nasdaq Stockholm Exchange, traded at the mid-cap, and with roughly 36,000 shareholders. So the first main event, which was announced on the twenty-sixth of June, was the sale of 125 MW Swedish wind power projects to BKW, the Swiss utility. The projects were, as mentioned, already under construction.
They are all located in the attractive price area three in Sweden. The transaction was done at an enterprise value of EUR 189 million. And that means the entire investment that the investor is doing, that is then being CapEx for the construction, the price they pay to Eolus for acquisition of the shares of the project companies, and the construction management fee that we received when constructing the projects on behalf of them.
So we've received a share purchase price of EUR 19 million, and revenues under the construction management agreement is estimated to EUR 29.5 million, which we recognize in accordance with the percentage of completion method, and which until they are finally in operation and handed over to the investor. And since they are under construction already, we communicated about the expected degree of completion in the press release. And in the Q2 report, we note that we have reached 78% degree of completion for Skallberget, Utterberget, and Tjärnäs, and 55% for Rosenskog.
We've also been entrusted to provide technical and operational and administrative services for the wind farms on a long-term contract. The other important deal that has impacted the revenues and the results of the quarter is the Centennial Flats project in Arizona. It's an solar PV and a battery storage project with up to 750 MW in total generation and battery capacity. This project was sold by us in the autumn of 2022.
We received revenues or we record revenues as we received milestone payments, so no cost of goods will be recorded in Eolus' profit and loss sheet for this project. As communicated before, there is a wide range of expected total revenues from the project, ranging between $104 million-$190 million. The reason for that wide range is due to the final design of the project, and how it will be finally financially structured by the investor.
But, we received 10% of the revenues in the lower figure or in the interval during 2022, and in this quarter, we received another 30%, roughly. The rest will be paid when milestones are achieved up until expected final completion during 2026. So we have accumulated now received 40% of the figure in the lower of the interval. We have been active in the U.S. since 2015. We have sold and constructed one wind project. We have developed and sold one standalone battery storage project in Los Angeles.
And we have, as mentioned, developed and sold the Centennial Flats project in Arizona. So in our Q2 report, we are highlighting our activities in the U.S., especially, and more than 5 GW of our total portfolio, so roughly 1/5 of our total portfolio is located in the U.S. And I think now everything we do is based on all our experience is from development in the country since 2015. And the portfolio is developing good, and so we expect that this will have a substantial contribution to Eolus earnings over the coming years.
In the Nordics, our portfolio in Finland grow significantly, mainly due to that we made an agreement with the Finnish landowner, Finsilva, where we acquired the right to develop projects with a potential or of more than 600 MW on their land. We are continuing to invest in both projects and organization in Finland. And we're very happy that our new country manager, Tiina Partanen, have joined the organization in August to lead that work.
So looking at our projects that are under construction, we're having 61 turbines under construction in Sweden. All of them are expected to be commissioned and taken into operation during 2023. Besides the Skallberget, Utterberget, Tjärnäs, and Rosenskog that were sold to BKW, it's also the Stor-Skälsjön project outside Sundsvall, a 260-MW project with 42 turbines, where Eolus owns 51% of the projects and the project and the remaining revenues from the construction management agreement. It is a partnership with Hydro Rein, and the final investor to the project is MEAG and Hydro Rein. Construction is generally going well.
We have a slight delay in Stor-Skälsjön, which we are doing everything we can to catch up, but also in Stor-Skälsjön, today, more than half of all the turbines has been erected. In addition, we have the battery storage project Cald in Los Angeles, that were sold to Aypa Power earlier, and that project we foresee that it will be taken into operation in beginning of 2024. In July, we also communicated that we are doing a strategic review of our offshore business. Definitely a lot of offshore wind will be needed in the energy transition in the decades to come.
We have several projects under development. We are growing our offshore team. We are investing heavily in those projects. And to be able to stay on long term, we have initiated this review, and the purpose is to create the best conditions for permitting and realization of the projects. And this includes the option to search for a strategic partner. And the total offshore portfolio now amounts to roughly 10,000 MW. And the offshore projects are maturing, and also in July, so after the quarter, we filed the permit application for the environmental permit for the 1,000-MW project, Västvind, located west of Gothenburg.
The permit application was handed in both to the land and environmental court and to the Swedish government. We have a strong local support for this project. I would say, as an example, demonstrated by that the Port of Gothenburg, who is the largest port of Scandinavia, decided to invest in a minority stake in the project. So our total portfolio has increased by roughly gigawatts over the quarter, and it's spread over markets and the technologies as shown in this slide.
So offshore wind now amounts for the largest portion of the total portfolio, followed by onshore wind, roughly 8 GW. Sweden is still our largest market with close to 50% of the total portfolio, but and significant increase, of course, now in Finland with the acquisition of the projects from Finsilva. Since it is really long-term projects, there are long lead times for the project, both in permitting, grid connection, and construction. We communicate about our late-stage development portfolio displayed in this slide. So this is what you could expect from Eolus in the mid-term.
So we update this list of projects each quarter. And thereby, I hand over to our CFO, Catharina Persson, to comment the financial figures. Okay. Are you there, Catharina?
Yes, I am here.
Yes.
Can you hear me?
Yes. Yes, yes. So I hand over to you to comment the financial figures.
Thank you, Per, and hi, everyone. We have had a strong second quarter with high activities, as Per has said. It includes divestment of Swedish wind power projects with ongoing constructions and achievement for milestones for our U.S. solar and battery storage project, Centennial Flats. Of course, the investments in the project portfolio on all Eolus markets. I will guide you through and highlight some of the figures for Eolus' second quarter, 2023. Net sales was SEK 1,742 million, and increased with SEK 294 million in comparison with the corresponding quarter, 2022. The sale of Skallberget, Utterberget, Tjärnäs, and Rosenskog to BKW has contributed both with payment for the shares, in the project companies, and with revenue recognition from the construction management agreement.
The construction management agreement fulfills the requirement for accounting in accordance with the percentage of completion method, and revenue recognition has started in the second quarter, based on the degree of completion. The construction is proceeding according to plan, and percentage of completion will continue until final completion of the wind farms when it's handed over to the customer, and that is estimated to take place end of this year. A significant milestone payment for the solar and battery storage project, Centennial Flats, was received during the quarter after achievements of important milestone in the development of that project. This has also contributed to the net sales and profits during the second quarter. Total estimated purchase price for the Centennial Flats is between $104 million and $190 million.
Eolus has now collected about 40% of the lower amount in that range, and the remaining payments are expected to be received in stages up until end of 2026. The construction management agreement regarding Storfallet is included in the net sales according to the current degree of completion, and for the second quarter, the increased degree of completion was 13%, and the construction is ongoing according to plan and is expected to be finalized late 2023. Operating profit was for the quarter SEK 517 million , and it is a result from the selling of Skallberget, Utterberget, Tjärnäs, and Rosenskog with a high degree of completion, and of course, the milestone of the solar and battery storage project in the U.S.
In comparison with the second quarter last year, the operating profit has improved from SEK 220 million, which is an increase of almost SEK 300 million. When it comes to expenses for Eolus Group, they are higher also in this quarter than the previous quarter, and also in comparison with the same quarter last year. The increased cost is overall according to plan and our ongoing expansion. Net from financial items for second quarter was SEK -14 million, and most of that amount is interest cost referring to loans during construction. Net from financial items for the comparison quarter last year was SEK +1 million. Net profit for the second quarter was SEK 422 million, which is a SEK 197 million improvement from last year.
I also want to highlight Eolus' net profit of SEK 437 million in rolling twelve months, and that includes the period July 1, 2022 until end June 2023. We also mention that we are having fluctuations in the business between the quarters, which affect the result in the quarters and sometimes also between the financial years. When it comes to the balance sheet, we had total fixed assets amounted to SEK 125 million, compared to 133 end quarter last year. Inventories and work in progress was SEK 696 million, and advanced payments to suppliers have decreased during the quarter to SEK 48 million. The sum of these have increased, compared to end second quarter last year.
These items include ongoing constructions, and since we have sold the major parts of the projects that were under construction, the work in progress and advanced payments to supplier have significantly decreased since first quarter this year. Cash of SEK 1,347 million end of June, and the cash position is mainly related to the selling of the Skallberget, Utterberget, Tjärnäs, and Rosenskog, where the customer reimbursed Eolus of the incurred cost and the payment referring, of course, to the milestone achievement in project U.S. has also contributed. We have total assets amounts to SEK 2.496 billion , and total equity of SEK 1,456 million. The increased total equity comes with a high net profit for the quarter. We had interest-bearing liabilities of SEK 477 million.
If we look at the key figures, we have net sales for quarter two, divided into Eolus two segments. The first one is net sale from project development of SEK 1,736 million, with an operating profit of SEK 519 million. The other segment is asset management, and we had net sale of SEK 7 million, with an operating profit of SEK -1 million. Earnings per share for the quarter, SEK 16.97, and that should be compared to SEK 4.12, same period last year. And equity share is about 56 SEK. We have net cash of SEK 870 million, and that has increased due to the selling, again, of the Skallberget, Utterberget, Tjärnäs, and Rosenskog and milestone payments.
Dividend for financial year 2022 of SEK 1.50 were paid to shareholders in May, and that was a total dividend of SEK 37.3 million that were paid. And we continue to increase the number of employees to have the capacity to leverage the potential in our large project portfolio and to reach the targets in our business plan for 2022 - 2024. An average number of employees for the first six months during the year is 100, and that should be compared to 67 people, same period last year. We have an order backlog of SEK 845 million , and we have asset management assignments of 817 MW.
Eolus has overall a sound balance sheet with equity asset ratio of 58%, and also a good net cash position. With a high-quality product portfolio across several markets and technologies, together with our growing organization, we are well-prepared for the future. Last number is return of equity after tax, and that was 37% compared to a negative figure last year. I would also like to share the degree of completion of the projects under construction. In total, we have 514 MW under construction quarter-end this year. Project Storfallet had a degree of completion of 13% for the quarter, and in total, 42, and Skallberget, Utterberget, and Tjärnäs contributed with 55% degree of completion, and Rosenskog with 78.
The constructions are following plan, and we are expected them to be finalized late 2023, and the remaining degree of completion will be accounted for during the rest of this year. Then I hand over the summary to Per.
Thank you, Catharina. So I would like to end this presentation with repeating that this is a record strong quarter for Eolus, where results and net sales essentially are derived from the sale of the 125 MW wind power project in Sweden and the substantial milestone payment for the U.S. battery and solar project finance Centennial Flats that we received. And some other events worth to repeat are continued growth in Finland, which we expect to be a very interesting long-term market, and a strategic review of the Eolus offshore business, and the handing in of the environmental permit application for the Västvind project.
So to conclude, Eolus has an expanding and high-quality project portfolio spread across several markets and technologies, a strong and growing organization, and a sound balance sheet. So this means that we stand strong even here in times of cost inflation and cost increases. And I'm looking forward to continuing this exciting journey, where we are now co-constructing projects in two continents. Thank you all for listening in, and we'll now hand back to the moderator and 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. The next question comes from Olof Cederholm, from ABG Sundal Collier. Please go ahead.
Hello, Per. Hello, Catharina, it's Olof from ABG. Congratulations on a very, very good quarter. I have a question regarding the near term going forward. I mean, you have a late-stage portfolio, which is pretty big, but some of those revenues have sort of started to be recognized as well. So just wondering, how should we think about revenue recognition going forward in Q3 and Q4? Will that be enough from sort of ongoing projects to turn in an EBIT profit, or do you need to sell projects to make money during the remainder of the year? It's my first question.
Yes. Hey, thank you, Olof. Yes, we expect a good second half of the year. We can highlight the figure with regarding order backlog that Catharina mentioned, of SEK 845 million. And that is mainly remaining revenues from the construction management agreements for the 61 Swedish wind turbines that we expect to complete this year. And since we have no cost of goods for those agreements, all contracts are owned by the SPVs that were acquired by the investors. So we expect a high... If all goes according to plan, we expect a high margin on those contracts.
We are, of course, also aiming to do new deals. Next upcoming batch of projects in Sweden, we expect to be around 100 MW in a cluster of 100 MW in southern Sweden, where we will start the procurement process soon. And we have also communicated that we intend to sell the American battery storage project, Pome, of 100 MW before the year-end.
Excellent. Thank you. And could I just have a have a follow-up on the order backlog number, and you say that, there's no cost of goods sold in those agreements. What's, you know, if the order backlog, is that a 12-month forward-looking order backlog, or is that a shorter period? How should we think about that? And also in terms of margins here, you know, it's easy to get super excited when you say there's no cost of goods sold. So, you know, I'm thinking, is that a 70% margin, or what are we thinking about? So could you maybe help us a little bit with indicating a margin when those revenues are recognized?
Yes. We are not commenting on margins in specific projects, but of course, if there is no cost of goods, the only reasonable cost that we would have on our P&L would be for our own personnel, I would say. So in general, high margins could be expected, but of course, we are taking some kind of risk in the outcome of the projects if there would be cost overruns or delays. But it's quite limited, I would say in these projects.
And it's the order backlog is all the expected remaining revenues until the projects are completed, so they could-
Including Arizona?
Yes.
Okay, so it's not all 2023?
No.
No. Thank you. And then my last question is on the Arizona project. What are the key catalysts that need to happen in order for the project value to go up towards the higher end of the value range that you've given?
It's mainly due to the final layout of the project, how much generation capacity the investor will decide to do. So how much solar panels they will install, compared to how much battery storage capacity and what revenue streams that will be most valuable to try to capture, when they come to final investment decision for the project. And it's also related to the production tax credits and the investment tax credits that were expanded and extended through the Inflation Reduction Act last year, which also will require some interpretation from the U.S. tax authorities.
Okay, so timing-wise, when will we know where we go with this?
We expect financial investment decision for the projects to be taken late 2024 or early 2025, and the entire project to be completed and in operation during 2026.
Okay. Thank you very much. That's all for me. Thank you.
Thank you.
And again-
As a reminder, if you wish to ask a question, please dial star five on your telephone keypad. There are no more questions at this time, so I hand the conference back to the speakers for any written questions and closing comments.
Thanks. We've also received some questions in the chat, and one is about the energy mix going forward. What will happen with the, when we have more wind and solar in the system, and how will we react and act on that within Eolus? For...
I would say that for all projects that we are developing in all markets, we evaluate the possibilities to do hybrid projects, including several technologies, being wind, solar, battery storage, and potentially hydrogen production, to make the facility more valuable and to be able to deliver more valuable projects to the grid, and thereby increasing the value for investors. There are some more detailed questions also in the chat, but we will make sure to for instance regarding accounting questions, we will make sure to reply in email to you on those. So thank you all for listening in to our presentation.
Wish you all a nice weekend.