Spanish biomass power producer Magnon Green Energy has disclosed its financial performance for the first nine months of 2023, reporting a year-on-year drop in net profit and earnings before interest, taxes, depreciation, and amortization (EBITDA). The company, a subsidiary of Spanish pulp producer and energy group Ence – Energia y Celulosa SA (BME:ENC), faced a challenging period marked by a EUR 7 million loss in the third quarter.
For the nine-month period, Magnon's attributable net profit stood at EUR 0.9 million (USD 948,864), marking a significant 75.5% decline from the previous year. EBITDA also witnessed a substantial downturn, decreasing by 62.6% year-on-year to EUR 36 million. Total revenues fell by 28.1%, amounting to EUR 169.6 million.
The company cited several factors contributing to these financial challenges, including a drop in electricity pool prices and lower regulatory energy prices, which are based on estimated pool prices and periodically set by the Spanish regulator. Magnon operates under Spanish laws governing renewables, combined heat and power plants (CHP), and waste-to-energy plants.
The regulatory energy price, last updated in June 2023, was set at EUR 109.3 per megawatt-hour (MWh), a significant decrease from EUR 207.9/MWh in the preceding regulatory period. Revenues from energy sales during the nine months of 2023 also declined by 32.9%, totaling EUR 131.3 million.
Another contributing factor to Magnon's revenue decline was the planned maintenance of one of its biomass-fired power plants. Despite these challenges, the company remains a key player in the Spanish renewable energy sector, operating eight biomass-fired power plants with a combined capacity of 266 MW.
Furthermore, Magnon is actively involved in renewable energy diversification and is currently developing 373 MW of solar photovoltaic projects in Andalusia. These projects are slated for sale to Spanish utility Naturgy Energy Group SA (BME:NTGY) as they progress through permitting. To date, Magnon has sold two solar projects to Naturgy and expects to finalize the sale of the remaining projects in 2024.