Scatec Solar continues to post positive results in Q1

Norwegian solar company Scatec Solar is continuing along its growth path, despite an 8% quarter-on-quarter decline in proportionate revenue to NOK 1,528 million ($176.3 million).

The company's revenue for the first quarter was just slightly short of the record NOK 1,666 million it posted in the fourth quarter of 2018. EBITDA also fell 4.2% from the preceding three-month period to NOK 315 million, but both revenue and EBITDA rose almost threefold year on year.

“We continue our solid deliveries in the first quarter with high construction activity on four continents and significant project development activity,” said Raymond Carlsen, CEO of Scatec Solar. “With the first 65 MW in Egypt grid-connected in April, our installed capacity reached 649 MW, and we plan to grid-connect substantial new capacity in the next few quarters. With continued strong market growth, we will utilize our market position to further grow a diversified business.”

Scatec Solar's primary source of revenue is the development and construction of solar projects, accounting for NOK 1,297 million of its quarterly total in the January-March period, but short of the NOK 169 million it posted in the fourth quarter of 2018. Revenue from power production, meanwhile, went from NOK 180 million in the three months to the end of last year to NOK 208 million in the first quarter of this year.

Likewise, its EBITDA nearly tripled year on year from NOK 109 million in the first three months of 2018 to NOK 315 million in the first quarter of this year. Throughout the fourth quarter of 2018, Scatec Solar clocked in with EBITDA of NOK 329 million, mainly due to higher returns from its solar development division. Although the development and construction segment of its business accounted for around 85% of revenue in the first quarter, it accounted for just half of EBITDA. Gross profit decreased slightly from NOK 432 million in the fourth quarter of 2018 to NOK 417 million in the first three months of this year, but more than doubled from the same period a year earlier, when the company posted a gross profit of NOK 196 million.

In April 2017, Scatec Solar signed six 25-year PPAs for 335 MW of PV in Egypt’s Benban complex. After the first plant reached commercial operation earlier this month, the company said that the remainder of this capacity would come online throughout the second half of this year.

Aside from 1 GW that is currently in operation, as well as 1 GW under construction, Scatec Solar said that it has a 4 GW pipeline, with 2 GW to be installed in Africa alone. It also plans to build just over 800 MW in Latin America and another 800 MW in Southeast Asia, in addition to 400 MW in Europe.

The company expects to continue to install between 800-1,200 MW per year. As income from power production is a leading source of income for Scatec Solar, it has claimed that it will increase production by a wide margin throughout the rest of the year. Power production reached 133 GWh (proportionate) and 254 GWh (on a 100% basis) in the first quarter, but for the April-June period it is set to rise slightly to 150-170 GWh (proportionate) and 290-310 GWh (100% basis). By the end of the year, production is set to reach 620-660 GWh (proportionate) and 1,100- 1,300 GWh (100% basis).