Danish RE Company Reports Healthy Q2/2023

• European Energy has reported 11% YoY increase in Q2/2023 revenues and over 200% jump in EBITDA  
• Management sees solar panel and transportation costs at below pre-covid levels now  
• Renewable energy pipeline of 58.7 GW includes 41.3 GW solar; annual guidance reiterated  

European Energy attributes higher energy sales from its operating assets to have driven up its Q2/2023 revenues by 11% to €48.4 million ($52 million), even as its total renewable energy pipeline dropped 2.5 GW sequentially to 58.7 GW, comprising 41.3 GW solar energy and 14.3 GW in onshore and offshore wind.   

Of the total pipeline, the Danish renewable energy company counts 24.7 GW in the screening phase, 31.3 GW in development and 2.7 GW in the structuring phase. Solar forms the lion's share of its development pipeline with 27.3 GW.  

At the end of June 2023, European Energy had 10 solar projects under construction with 498 MW capacity, all of which are scheduled to come online in 2023-24. 

According to the management, "Supply chain and production capacity issues are no longer a major challenge, which was the case in parts of 2021 and 2022. Instead, we see solar panel and transportation costs below pre-Covid levels." 

The company's total EBITDA for the reporting quarter totaled €36.1 million ($39 million), having improved by over 200% YoY, while gross profit went up by more than 123%. Higher EBITDA also led to higher profit before tax of €21.7 million ($23.4 million), which went up from €6.4 million in Q2/2022.  

Nonetheless, during H1/2023, European Energy's revenues decreased 68% YoY. Even though it sold 11% more energy, it sold fewer projects during the period, compared to 2 larger operational projects in H1/2022 in Italy (see European Energy Ticks Right Boxes in Q2/2022).  

The management points out that power prices in key markets as Denmark and Germany increased to figures above subsidy levels.  

It added, "Consequently, these assets sell produced power at market prices and received zero subsidies during the period. For energy parks with a Power Purchase Agreement with a third party offtaker, there was no extra revenue from increased spot prices."   

The company has reiterated its 2023 EBITDA guidance of €180 million and profit before tax of close to €140 million.