Greenvolt profits fall 93% to €1.2 million in 2023

Renewables energy company Greenvolt posted a net result of €1.2 million for 2023, a fall of 92.9% according to a note sent to the Portuguese securities market commission CMVM this week.

The company, founded by João Manso Neto, a former CEO of EDP Renováveis, stated: ”2023 was a challenging market marked by strong investments, as foreseen in the business plan, creating conditions for greater profitability in 2024 and the years that followed”.
The company produces energy and develops biomass, wind and solar projects in Portugal, 15 European markets, and in the United States.
Renewable energy companies in Portugal and Spain, where there is abundant wind and sunlight, are increasingly popular with investors as governments and corporations shift away from fossil fuels to address climate change.
It went on to say that the year’s results were in line with expectations and with the group’s strategic plan”.
The results before interest, taxes, depreciation, and amortisation (EBITDA) were however, slightly better than the results posted in 2022 climbing 3.2% to €103 million. Operational revenue was also up from €242.3 million to €385.5 million.
Across the various business areas, large scale renewable installations now represent around 50% of EBITDA (€51.2 million) “driven by revenues from assets rotation and operational assets that saw a significant improvement on 2022”.
However, its biomass business saw EBITDA tumble by around 40% to €56.9 million, due to a fall in market prices in the UK.
The EBITDA from the Utility-Scale segment also offset expansion costs to consolidate the platform in the Distributed Generation segment while installed capacity trebled on 2022, and operational revenues improved by 135.8%, but had a negative impact of €6 million on EBITDA “reflecting the starting phase of the activity, as well as a focus on infrastructure consolidation”. This segment is expected to show a positive EBITDA result in 2024.
Greenvolt – Energias Renováveis has made a lot of investment and raised a lot of debt to boost returns, and has a debt to equity ratio of 2.10. The combination of a rather low Return on Investment (ROE) and significant use of debt carries risk, so the company hopes to generate some good returns from it in the short to medium term.
At the end of 2023, the US fund KKR became the full shareholder in the company after a takeover bid. It had valued the company at €1.16Bn after signing agreements to secure a controlling stake after offering €8.3 per Greenvolt share.
Greenvolt, which made its market debut in July 2021 after an initial public offering at €4.25 a share, had more than 139 million outstanding shares.
In the first nine months of 2023, Greenvolt’s consolidated net profit fell 64.7% to €5.9 million on 2022 even though revenue grew 46% to €268 million.
Earnings before interest, taxes, depreciation and amortisation (EBITDA) had fallen 3.3% to €76.9 million.