Encavis brushes off COVID-19 concerns with strong 2020 financial outlook

in January, UK-based firm Solarcentury and Encavis started construction on the US$250.5 million Talayuela Solar Project in Spain. Credit: SolarCentury

German solar and wind firm Encavis AG has maintained its 2020 financial targets despite the COVID-19 outbreak.

Having achieved record earnings in 2019, beating its so-called “summer of the century” in 2018, Encavis said it expects earnings to stay strong this year even if there are delays with the construction of two major solar PV plants in Spain.

This article requires Premium SubscriptionBasic (FREE) Subscription

Unlock unlimited access for 12 whole months of distinctive global analysis

Photovoltaics International is now included.

  • Regular insight and analysis of the industry’s biggest developments
  • In-depth interviews with the industry’s leading figures
  • Unlimited digital access to the PV Tech Power journal catalogue
  • Unlimited digital access to the Photovoltaics International journal catalogue
  • Access to more than 1,000 technical papers
  • Discounts on Solar Media’s portfolio of events, in-person and virtual

Or continue reading this article for free

In a release, the firm stated: “Even in these difficult times, we feel well-positioned to achieve our long-term goals. For the current financial year, we are expecting moderate growth in revenues and earnings, which is in line with our original forecast before the Corona crisis.”

2019 weather boon

Last year, expansion of the firm’s generation portfolio in Denmark and the Netherlands, growth of Encavis Asset Management and more favourable weather conditions helped Encavis obtain a 10% increase in revenue of €25 million. This was €10.5 million higher than originally forecasted and €3.8 million higher than in 2018.

2019 revenue growth was driven by around €13.6 million from solar parks, €5.3 million from wind, and €7.5 million from the firm’s asset management business.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) increased by around 16% to €217.6 million compared to the previous year, with the EBITDA margin rising to 79.5%, up from 75% in the previous year.

The renewable energy parks each achieved operating EBITDA margins of 82% (wind) and 84% (solar). Increases in EBITDA were also boosted by the sale of minority interests in four wind parks as well a decline in other operating expenses, mainly due to the application of International Financial Reporting Standard (IFRS) 16.

Operating cash flow increased by €15 million (9%) to €189.3 million – again meeting guidance.

2020 Spanish solar giants

In 2020, Encavis will chiefly focus on two major PV projects in Spain that are due to be connected to the grid in the second half of the year.

For example, in January, UK-based firm Solarcentury and Encavis started construction on the US$250.5 million Talayuela Solar Project, a 300MW PV project being developed in Cáceres, Extremadura, Spain. Once completed, it will be one of the largest subsidy-free solar developments in Spain to date.

The German company said that even if there was a delay with the construction of these projects, this would have limited impact, with a negative effect on earnings per share for 2020 of €0.01.

The Management Board also expects a moderate increase in revenues to more than €280 million for the 2020 financial year. The firm plans to achieve operating earnings (EBITDA) of more than €220 million and operating EBIT of around €130 million, with operating cash flow expected to exceed €200 million.

Thus, despite all the expected headwinds from COVID-19 globally, the firm said it will continue to follow its Fast Forward 2025 strategy unencumbered. The company is, however, postponing the Annual General Meeting for the safety of shareholders and employees.

PV Tech has set up a tracker to map out how the COVID-19 pandemic is disrupting solar supply chains worldwide. You can read the latest updates here.

The prospects and challenges of solar's new era in Europe will take centre stage at Large Scale Solar Europe 2020 (Lisbon, on 30 June-1 July 2020).

Read Next

May 29, 2024
Spanish inverter manufacturer Ingeteam will supply its products to a 250MW solar PV project from fellow Spanish solar project developer Grenergy.
May 28, 2024
BayWa r.e. has commissioned its first agriPV project in Spain, and has signed a power purchase agreement (PPA) with the Velux Group.
May 24, 2024
Solar project developer Recurrent Energy has secured a €674 million (US$730 million) revolving credit facility to expand its European solar and battery energy storage system (BESS) portfolio.
May 24, 2024
Quarterly reports from China’s big-five PV module producers highlight the challenges PV manufacturers face in maintaining profitability.
May 20, 2024
Avintia Energía plans to build an 850MW portfolio of greenfield solar projects with Italian oil giant Eni's subsidiary Plenitude in Spain.
May 15, 2024
Tigo Energy has published its financial results for the first quarter of 2024, which include revenues of US$9.8 million.

Subscribe to Newsletter

Upcoming Events

Upcoming Webinars
May 29, 2024
11am (EDT) / 5pm (CEST)
Solar Media Events
June 4, 2024
London, UK
Upcoming Webinars
June 11, 2024
3:00 PM (BST) / 4:00 PM (CEST)
Solar Media Events
July 2, 2024
Athens, Greece