Norwegian renewable energy company Scatec ASA, listed on OSL:SCATC, has announced a significant 72% year-on-year decline in consolidated profit for the third quarter of 2023, with earnings totaling NOK 95 million (USD 8.5 million / EUR 8 million).
During the same period, consolidated revenues and other income dipped to NOK 947 million, compared to NOK 1.16 billion, and the operating profit (EBIT) saw a decrease to NOK 484 million from NOK 686 million in the corresponding quarter of 2022.
Scatec provides financial reports on a proportionate basis, clarifying that consolidated financials primarily stem from the Power Production segment. Revenues and profits from the Services and Development & Construction segments are offset in the Consolidated Financial Statements.
On a proportionate basis, the company reported robust quarterly performance, with development and construction (D&C) revenues more than tripling to NOK 1.32 billion, resulting in a 51% year-on-year increase in proportionate revenues to NOK 2.46 billion. Scatec's proportionate EBIT rose to NOK 584 million from NOK 534 million.
Scatec's CEO, Terje Pilskog, underlined the company's commitment to prudent growth with attractive margins, funded by internal capacity. He also emphasized their focus on optimizing the portfolio while acknowledging the challenges posed by the current macroeconomic and capital market conditions. Pilskog mentioned that they are taking concrete mitigating actions and accelerating efforts on capital recycling, along with considering additional debt repayments.
Scatec has adjusted its growth rate to align with its internal funding capacity, targeting NOK 500 million to 750 million of gross equity investments annually. This adjustment is in response to record-high interest rates affecting the cost of capital and project profitability.
Furthermore, Scatec has revised its full-year EBITDA forecast for Power Production, now expecting it to range from NOK 3.05 billion to NOK 3.25 billion, as opposed to the previous range of NOK 3.1 billion to NOK 3.4 billion. This revision is attributed to factors such as a changed production estimate in the Philippines, a solar plant divestment in Argentina, and foreign currency effects.
In response to the challenging market conditions, the company's board of directors has approved a change in the dividend policy. Scatec will not distribute dividends for now, and the policy will be reviewed on an annual basis, in line with the evolving economic and capital market situation.