Ukraine conflict dents Scatec’s opening quarter earnings

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Scatec currently has 448MW of solar PV in operation in South Africa. Image: Scatec.

Russia’s invasion of Ukraine was blamed for a collapse in Q1 earnings recorded by independent power producer (IPP) Scatec.

The IPP recorded revenues of NOK1,014 billion (US$106.34 million) in the first quarter of 2022, a 6.3% increase year-on-year, however earnings fell 37% to NOK398 million (US$41.62 million).

Scatec owns and operates 336MW of solar PV in Ukraine. While it confirmed that 95% of its projects in Ukraine remain operational, the business had made an impairment of NOK770 million of non-current assets and a credit loss provision on trade and other receivables of NOK87 million, recorded on a proportionate basis during the quarter.

Scatec currently has a backlog of 1.7GW of solar projects across four countries – South Africa (813MW), Brazil (530MW), Tunisia (360MW) and Lesotho (20MW) – and 1.1GWh of battery energy storage system (BESS) which it aims to start construction on all the projects during 2022.

Its current portfolio consists of 3GW of renewable assets in operation and a pipeline of 14.5GW, 5.9GW of which is solar PV.

Terje Pilskog, CEO of Scatec, said the business intended to bring its backlog intro construction this year whilst growing its pipeline within core markets.

“In addition, we will have a strong focus on further developing our green ammonia and green hydrogen business,” Pilskog added.

During the first quarter Scatec has actively expanded its presence in the green hydrogen market as it announced a series of green hydrogen and green ammonia projects in Oman and Egypt, as well as its first stand-alone BESS project in the Philippines.

Furthermore, last month the Greenfield project in Oman received the first green hydrogen and green ammonia certification from technical advisory company TÜV Rheinland.

Scatec reviewed its guidance for 2022 with an expected production between 3.9 – 4.2TWh and an EBITDA of NOK 2.3-26 billion, down NOK400 million to reflect the impact of the conflict in Ukraine.

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