The global energy crisis and with it the high electricity prices in Europe and the expansion of the backlog of projects in the USA arranged for the renewable energy company Enlight strong reports for the first half of 2022.
The company’s revenues in the first half of the year amounted to NIS 280 million, which is an increase of about 40% compared to the first half of 2021 and its adjusted EBITDA increased by 31% compared to the corresponding period, which amounted to NIS 202 million. The increase in revenues is mainly due to the operation of the company’s new facilities in Sweden, Israel and Kosovo.
The profit index that neutralizes events of a one-time nature (FFO) of the company amounted to NIS 151 million, which is a 32% increase compared to the corresponding period last year. In the first half, Enlight’s operating profit increased by 62% to NIS 94 million compared to the corresponding half.
The increase in the price index has a positive effect on Enlight’s results in the first half of the year, since the excess of linked revenues in relation to the linked debt generates a positive effect for it due to the index rise, with a future positive effect of approximately NIS 280 million.
With the publication of its financial statements for the first half of the year, Enlight also confirmed its revenue forecast for the end of 2022, which anticipates an increase of up to 43% in revenue compared to 2021, to an amount between NIS 610 and 640 million. The FFO forecast for the end of the year is in the range between NIS 300 and 330 million, reflecting a 33% increase compared to 2021 and its EBITDA forecast predicts a 33% increase compared to last year, to NIS 410-440 million.
The completion of the connection of projects it is leading to the electricity grids has led to a 46% increase in its yield capacity to 1,046 megawatts compared to 717 megawatts in 2021 since the beginning of the year.
The company’s outlook speaks of high growth in the short term, to a generating capacity of 3.7 gigawatts by 2024, which is expected to generate revenues at an annual rate of approximately NIS 2 billion. It also anticipates significant progress in development projects that will move to the construction stages during the next 12 months, with a capacity of 1.6 gigawatts: “The global energy crisis accelerates the transition to renewable energies and the demand for our projects,” said yesterday (Sunday) in reference to the company’s results in the first half of the year, CEO To Enlight, Gilad Yaevtz: “During the second quarter of the year, we raised the rate of our long-term electricity contracts in a variety of large projects in the US and Europe, and we expect the trend to continue.”
The main part of Enlight’s expected expansion is in the European market and the American market, where last month it signed a memorandum of understanding to purchase a backlog of 4 projects with a total capacity of 2.2 gigawatts and with an energy storage capacity of 3.8 gigawatt hours. The investment in the development of these projects is estimated at 2.2 billion dollars.
These are projects that are in various stages of construction in Montana, Arizona, and Utah, and Enlight estimates that they will mature into construction between 2024 and 2026, with high returns expected from them. In these ventures, Enlight enjoys an attractive acquisition cost, which consists of an initial payment of 21 million dollars and a success-based payment of up to NIS 46 million.
The law to reduce inflation in the US that passed earlier this month in the Senate in the amount of approximately 740 billion dollars and is based on the plan of the President, Joe Biden to combat climate change and with it global warming and the need to reduce carbon emissions, is expected to benefit Enlight’s development plans. This, with It is expected that the economic viability of the company’s ventures in the US will improve, partly due to the reduction of the equity that it will need to make investments.
The approval of the law in the Senate is expected to include significant benefits for enterprises in the field of renewable energies and to speed up the pace of their penetration into the American market. Enlight’s data shows that 64% of its portfolio is located in the US, in countries with high outputs in the production of solar electricity. Last year Enlight purchased 90% of the American Klinara in exchange for 390 million dollars and there they believe that the benefits expected for the industry in the coming years will significantly increase the economic viability of employment.
In Europe, which is suffering from a severe energy crisis, partly due to the closing of the natural gas tap from Russia since it invaded Ukraine last February, Enlight is enjoying an accelerated pace in the assimilation of renewable energies – along with high prices.
Last June, it began the commercial operation of the Gecama wind energy project in Spain, which is considered one of the largest in the country, with a capacity of 329 megawatts.
In Enlight’s estimation, the high electricity prices in Spain and Sweden will significantly improve the results of its projects in those countries. Thus, the plans for the addition of 450 gigawatts through renewable energies in European countries by 2030 gives it a strong tailwind, against the background of a significant development portfolio that it has and its construction is expected to begin in 2024 in Italy, Croatia and Spain, with a total capacity of 1.3 gigawatts and another 800 megawatts -Watt hour of storage.
From the beginning of 2022, Enlight has completed capital issues in the amount of approximately NIS 680 million, an amount that includes a private issue from the last few weeks in the amount of NIS 450 million to entities from the Altshuler Shaham group. In addition, it raised approximately NIS 155 million as an extension to Series C of convertible bonds. Enlight is traded in Tel Aviv at a value of approximately NIS 8.5 billion. It recently reported that it is considering the possibility of an IPO on one of the stock exchanges in the United States, but did not indicate any timetables for implementation this plan. As part of its actions on the subject, it submitted a classified prospectus to the American Securities Authority. Sources in the energy industry estimated that against the background of the expected increase in demand for green electricity, along with the expected developments in the industry in the US over the coming years following the Biden plan, will lead Enlight to such an offering. According to the company’s CEO, Yabetz, “We are proud of Altshuler Shaham’s significant entry into the investment In Enlight and we will also continue to examine options for issuance in the American market.”