Norwegian independent power producer (IPP) Scatec has posted weakened financial results for the third quarter of 2023, with year-on-year power production and profit dropping by 7.8% and 71.6% respectively.
The company’s power production in Q3 2023 was 1,047GWh, dropping from 1,135GWh in Q3 2022. In the first three quarters of this year, power production was 2,804GWh, down from 2,919GWh year-on-year.
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Revenues and other income for power production were NOK1,028 million (US$92.1 million) in the quarter, a decrease of NOK92 million compared to the same quarter last year. Scatec said this was mainly due to reduced revenues in the Philippines (NOK125 million) driven by lower production, lower prices and limited ancillary services.
Revenues in South Africa also decreased by NOK35 million due to the sale of the 258MW Upington power plants in the second quarter. Scatec said the capital raised from this sale would be used to invest in renewable energy.
Q3 profit dropped to NOK95 million from NOK335 million in Q3 2022, representing a 71.6% decrease. Quarterly, Q3 profit also dropped even further by 76.4 %.
However, the company’s revenues and other income for development and construction increased from NOK412 million in Q3 2022 to NOK1,323 million in Q3 2023. This was due to the progress of the projects under construction in South Africa, Brazil, and Pakistan. The gross margin was 13% in the quarter.
Looking ahead, Scatec’s Q4 power production is estimated at 700-800GWh on a proportionate basis, a decrease of up to 33.1%. Power production in 2023 is expected to be between 3,500-3,600 GWh, reducing by 50GWh on a proportionate basis due to the sale of a solar plant in Argentina and lower estimated production in the Philippines in Q4 2023.
The full year 2023 EBITDA estimate for power production was updated from NOK3.1–3.4 billion to NOK 3.05–3.25 billion, driven by a revised production estimate for the Philippines, the sale of the solar plant in Argentina and foreign currency effects.
Scatec’s pipeline of renewables projects was reduced by about 1.99GW at the end of Q3 2023, compared to the previous quarter. The total pipeline sits at 10.2GW at the end of Q3 2023, of which 5.3GW comes from solar PV – representing 51.7% of the total capacity in the pipeline – up from the 4.15GW registered at the end of Q2 2023.
Scatec has been expanding its business in previous quarters. In July, the company secured US$102 million in funding to support its Release by Scatec (Release) platform, a flexible leasing solution for pre-assembled solar modules and battery storage for the mining and utilities market.