Encavis cuts 2024 guidance after weak 9mo results

German wind and solar park operator Encavis AG (ETR:CAP) narrowed its full-year forecast after its revenue and earnings in the first nine months of 2024 suffered from project commissioning delays, unfavourable weather conditions and lower electricity prices.

Among the “unforeseeable events” that led to the significantly lower results as compared to the first three quarters of 2023 is the difficult interest rate environment in Encavis’ asset management business. The slight increase in electricity production and strong growth in the Service segment could not offset the negative effects, Encavis said on Friday.

In light of the inferior performance, Encavis cut its revenue guidance for 2024, expecting to close the year with revenues of EUR 425 million (USD 455.6m), instead of over EUR 460 million. It projects earnings, before interest, tax, depreciation and amortisation (EBITDA) to be in the range of EUR 260 million to EUR 270 million, rather than exceed EUR 300 million, and EBIT is seen at EUR 135 million-145 million, against an earlier forecast for a result of over EUR 175 million.

Originally anticipated to exceed EUR 260 million, operating cash flow in 2024 is seen to stand at between EUR 225 million and EUR 235 million.

Encavis closed the first nine months of 2024 with an adjusted EBITDA of EUR 201.3 million, experiencing a drop from EUR 246.1 million a year back, with adjusted operating EBIT contracted by 31%. At EUR 321.6 million, net revenues marked a 10% year-on-year decrease, largely because of the less favourable wind and solar conditions in Southern Europe, as well as plant shutdowns due to negative electricity prices in Spain and Finland.

The German company increased its power output to 2,677 GWh in the nine months from 2,673 GWh a year before.

(EUR 1.0 = USD 1.072)

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