Voltalia narrows H1 2024 loss, but Brazil curtailment woes continue

French renewables company Voltalia SA (EPA:VLTSA) on Thursday reported a slimmer net loss and stronger operating performance for the first half of 2024, but reminded that the favourable earnings outlook for the full year still hinges on receiving financial compensation for the prolonged curtailment in Brazil.

The company posted a net loss of EUR 15.7 million (USD 17.4m) for the six-month period through June, compared with the EUR-19.4-million loss a year earlier, attributing the bottom line to the seasonal nature of the business.

Consolidated earnings before interest, taxes, depreciation and amortisation (EBITDA) rose by 34% year-on-year to EUR 75.0 million, thanks to the new capacity commissioned in 2023 and during the reporting period.

EBITDA before eliminations and corporate items stood at EUR 102.2 million, increasing by 12% on stronger effects of external activities which more than offset a lower volume of inter-company transactions.

Revenues for the first half, which Voltalia reported in July, totalled EUR 248.9 million, up by 28% on the year. The growth came mainly on the back of higher energy sales and higher revenues from services to third-party customers.

The outlook for 2024 remains foggy due to imposed curtailments on Voltalia’s electricity production in Brazil, which could last for several months mainly because of the delays in the construction of new transmission lines.

Voltalia already said it was taking various legal and diplomatic steps to reduce the duration of curtailments and secure financial compensation. Moreover, the company anticipates higher wind and solar resources in Brazil during the second half of the year, which heightens the urgency to resolve the issue.

Before the Brazilian impact, Voltalia’s full-year EBITDA target for 2024 remains at around EUR 255 million, including around EUR 230 million from energy sales. The second-half-year EBITDA is seen to reach EUR 180 million, including EUR 155 million from energy sales.

However, if the curtailments continue and Voltalia does not receive compensation, its 2024 EBITDA could be reduced by around EUR 40 million, as previously communicated. The calculation also includes the impact of the average EUR/BRL exchange rate of around 6, Voltalia said.

The company confirmed its 2024 capacity target, aiming for approximately 3,300 MW of capacity in operation and under construction. At the end of the first half, Voltalia had 3,057 MW of capacity in operation and under construction.

(EUR 1.0 = USD 1.109)

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