‘Turning around our profit after tax, we are very proud to have delivered solid second quarter results for 2022. These were primarily driven by the shift of 83% of our IPP portfolio from feed-in-tariffs to the sale of electricity directly to the market. In addition, we recorded dynamic growth in our other business lines, such as PV component trading, which we are realising across our key markets and beyond. Based on the energy market outlook and in the absence of unforeseen events, we are increasing our full-year 2022 revenue expectations from the previously communicated EUR 65 million to EUR 85 million and EBITDA from the previous EUR 18 million to EUR 24 million,’ commented Georg Hotar, CEO of Photon Energy Group.
Q2 and H1 2022 Highlights
In the first half of the year, the Company demonstrated its ability to rapidly adjust to changing market conditions by deciding to temporarily switch most of its Hungarian power plants to a merchant model, selling clean energy directly on the market without any state support. As a result, revenues from the sale of electricity generated by the Group’s growing portfolio benefited from the high electricity prices experienced globally.
Selling electricity to the market is now a core part of the Company’s business strategy, with 83% of its total proprietary portfolio now operating on a merchant basis. There were also increases in other revenue streams, mainly driven by the great momentum in the Group’s PV component trading business, distributing modules, inverters and batteries.
On the project development side, the Company commissioned a 1.4 MWp power plant in Hungary, bringing its proprietary portfolio to 91.9 MWp, and is progressing well with the construction of its first five power plants in Romania. The Company’s first project in the country, where it plans to build 32 MWp by the end of the year, is starting to take shape as it has just completed the sub-structure and installed half of the total 10,600 solar panels. The Company is currently developing utility-scale PV projects with a combined capacity of over 825 MWp in its key CEE markets and Australia.
As for the Company’s presence on capital markets, the second quarter of 2022 has been an exciting period, with the tap of its Green EUR Bond 2021/2027 by EUR 10 million and three ‘buy’ recommendations for its shares from research houses AlsterResearch (Germany), WOOD & Company (Czech Republic) and IPOPEMA (Poland), respectively.
Financial Metrics
The Group’s 2022 second quarter results demonstrated exciting progress with consolidated revenues of EUR 23.229 million (+135.7% YOY), and EUR 32.367 million YTD (+124.4% YOY) for the first half of the year. This increase in revenues is primarily attributable to higher revenues from the production of electricity generated by the Company’s new power plants operating on a merchant basis, as well as the high electricity prices on the market-linked direct sales component of the ‘Green Bonus’ support scheme, which the Czech portfolio switched into at the beginning of the year.
The Company also took important steps to underpin the growth of its business, including the decision to temporarily switch most of the Group’s Hungarian IPP portfolio to a merchant model, representing 46.2 MWp of the Company’s total 51.8 MWp Hungarian portfolio. Since April 2022, these power plants have not been dependent upon any kind of support mechanism. As a result, the Company saw revenues from the sale of electricity generated by the Group’s growing portfolio benefit from rising electricity prices globally.
Besides the outstanding revenue from electricity production of EUR 10.963 million (+59.2% YOY), this strong outcome was driven by a remarkable increase in other revenue streams (EUR 12.266 million, +313.2% YOY). The latter was mainly attributable to the great momentum experienced by the Company’s component trading business line, outshining the relatively more modest growth in O&M and EPC revenues.
This strong business performance led to a consolidated 108.3% EBITDA improvement to EUR 8.119 million and incurred a record Q2 EBIT of EUR 4.640 million compared to EUR 0.968 million in the same period last year by absorbing the impact of the new windfall tax in Hungary, adopted by the Hungarian government retrospectively in June 2022.
Most importantly, the Company turned around a EUR -0.565 million loss before taxation recorded in Q2 2021 to an outstanding EUR 2.619 million profit in Q2 2022, as well as its net profit of EUR 2.030 million achieved during the reporting period (versus a net loss of EUR 0.869 million in Q2 2021).
Despite a negative other comprehensive income (OCI), which was affected by a weakening Hungarian Forint (HUF), the Company continues to report an increased positive consolidated total comprehensive income (TCI) for the quarter, amounting to EUR 0.546 million, compared to EUR 0.505 million last year for the same period.
Year-to-date, Photon Energy Group closed a record first half of the year with revenues amounting to EUR 32.367 million, representing a 124.4% increase YOY, raised its EBITDA by 146.2% YOY to EUR 10.143 million. EBIT swung from a loss of EUR -0.507 million to a profit of EUR 5.609 million. The Group recorded a net profit of EUR 0.539 million compared to a loss of EUR -4.037 million in the first half of 2021. At the bottom line, TCI amounted to EUR 2.335 million compared to EUR 2.297 million a year ago. The adjusted equity ratio remained at a sound level of 29.3%.
View the Company's financial report for the second quarter and first half year of 2022 here.
