ALTEO ENERGY SERVICES PUBLIC LIMITED COMPANY ALTEO NYRT.
INVESTOR PRESENTATION -
ALTEO Group
Q3 2023
(non1-audited financial income)
Q3 2023 NON-AUDITED FINANCIAL INCOME
This information was not compiled
on the basis of international accounting standard IAS 34 - Interim Financial Reporting; the information contained in them are non-audited in terms of 2023 results, and have not been audited by an independent auditor. This presentation is for advance information purposes only.
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THE MOST IMPORTANT EVENTS AND RESULTS OF 2023
-
ALTEO achieved a remarkable result in the first three quarters of 2023. The remarkable rise in profits confirms the success of the Company's strategy (presented at the end of 2019 and updated at the start of 2022) and its effective implementation, where environmental and social sustainability play
a key role in addition to business considerations. - The energy market in 2023 continued to be characterized by consolidating prices, which are still significantly above the levels seen before the price increase at the end of 2021. Possibly higher energy price stabilization have a positive impact on ALTEO's long-term strategy, highlighting that energy market opportunities starting in 2022 and continuing in 2023 are unlikely to persist in the long term. In the period ahead, ALTEO intends to continue to make use of a maximum of opportunities offered by the market, building on its corporate structure, its strategy based on sustainability and renewable energy production, with a diversified portfolio and an outstanding team of professionals. ALTEO's current profitability significantly exceeds the upper band of the median EBITDA range presented at the beginning of 2022.
- CONSOLIDATED EBITDA REACHED HUF 16.3 BILLION, which is comparable to the level of the same period last year, even though energy market opportunities have been gradually declining since 2022, a year that closed with exceptionally high profit. Taking into account that the special tax on capacity income - introduced retroactively in fall 2022 - had not yet affected the base period, this year's result can be considered exceptionally good, and is mainly explained by the performance of the energy retail trade, renewable production management and waste management segments.
- CONSOLIDATED NET PROFIT WAS HUF 11.3 BILLION, SHOWING A 1% INCREASE over the same period last year.
- ALTEO's management considers the ramp-up of the Renewable Production Management business, launched at the end of 2020, to be extremely successful. Currently, this business line is the clear market leader in the domestic market in terms of managed renewable power plant capacities, which capacity has now reached almost 1,700 MW.
- For the WASTE MANAGEMENT segment, which underwent significant growth after the acquisition of FE-GROUP INVEST Zrt. in 2022, the waste management concession launched on 7/1/2023, could represent significant opportunities, as the first quarter of operation seems to confirm.
- ALTEO continues to pursue the active INVESTMENT ACTIVITY highlighted in its strategy. On 5/25/2023, the transaction for 100% of the share capital of Energikum Zrt. and 33% of the issued capital of ECO-FIRST Kft. was concluded. Energikum Zrt. holds the business quota representing 99% of
the issued capital of Energigas Kft., which is the owner of the biogas plant in Nagykőrös, while ECO-FIRST Kft. is engaged in waste trading.
In addition to the above, ALTEO is continuously working on further developing its Virtual Power Plant, including the enhancement of IT capabilities, as well as the development of energy storage and other energy production capacities.
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THE MOST IMPORTANT EVENTS AND RESULTS OF 2023
- On 3/13/2023, the joint STATUTORY PUBLIC TAKEOVER BID PROCEDURE by MOL RES Investments Zrt., Főnix Private Equity Fund and Riverland Private Equity Fund aimed at acquiring controlling interest was successfully concluded.
- Two members of ALTEO Group and K&H Bank concluded the first loan transaction of ALTEO Group that is fully compliant with the so-called Taxonomy Regulation, which entered into force in 2022. Under the agreement, K&H PROVIDES A HUF 4 BILLION LOAN, which transaction complies with the EU Taxonomy, the most stringent set of sustainability rules of the European Union.
- The electrical boiler in Sopron commenced operation. The consortium of ALTEO and the Alfréd Rényi Institute of Mathematics was granted funding for the development of the system in a call for tenders by the Hungarian National Research, Development and Innovation Office.
- On 3/16/2023, the HUF 6 billion PARENT COMPANY LOAN received from Wallis Asset Management Zrt. in December 2022 was repaid in full.
- On 4/2/2023, the new members of the Board of Directors and the Supervisory Board were elected at the Extraordinary General Meeting.
- On 4/21/2023, the General Meeting adopted ALTEO's 2022 annual report.
- On 4/28/2023, ALTEO's Board of Directors adopted a decision to introduce a new long-termshare-based incentive for senior and middle managers as well as for key talents and specialists.
- On 5/17/2023, the Company announced that it signed a framework agreement with MOL Nyrt. to provide industrial and power plant rotary machine maintenance services for MOL and its domestic and foreign subsidiaries (in particular Slovnaft or INA). ALTEO is thus benefitting from the synergies emerging from the cooperation between the two companies.
- On 5/25/2023, the transaction for 100% of the share capital of Energikum Zrt. and 33% of the issued capital of ECO-FIRST Kft. was concluded.
- On 6/23/2023, SCOPE Ratings GmbH upgraded ALTEO as an issuer from "BB+" to "BBB-". The previous "BBB-" rating of ALTEO's bonds remained unchanged.
- On 6/29/2023, ALTEO Nyrt. subsidiary FE-GROUP INVEST Zrt. entered into a two-year contract (renewable for an additional two years) with MOHU MOL Hulladékgazdálkodási Zrt. for the collection, transport, storage and pre-treatment of waste.
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THE MOST IMPORTANT EVENTS AND RESULTS OF 2023
- On 7/3/2023, the result of ALTEO's ESG certification review was published, and the company received an even more favorable ESG rating than the risk level of last year. In the course of the year, the Company had developed and set up its own green financing framework, with Deloitte Zrt. providing the second party opinion.
- On 7/6/2023, ALTEO's Board of Directors approved the plans for the construction of Edelyn Solar, which will double the company's own solar power plant portfolio from its current nominal capacity of approximately 20 MW to 40 MW.
Events after the closing of the statement of financial position
- As of 10/2/2023, Magdolna Tokai joined ALTEO's management as Deputy CEO for Corporate Support. Ms Tokai will be responsible for the establishment and operation of two new corporate units: the project portfolio management area, which will primarily support resource planning and allocation at ALTEO level, and the BoD cabinet, which will coordinate the work of decision-making bodies, and will also include the areas of IT, purchasing, legal and office management.
ALTEO GROUP PORTFOLIO
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ALTEO GROUP PORTFOLIO
GAS ENGINE AND | ||||||
RENEWABLE ENERGY | INDUSTRIAL AND | HEATING POWER | ||||
PRODUCTION | COMMERCIAL SERVICES | PLANTS, ENERGY | ||||
STORAGE FACILITIES | ||||||
ALTEO Group has significant | ALTEO Group facilitates the efficient | ALTEO Group operates high- | ||||
competences, among others, | energy management of its consumers | efficiency, combined heat and | ||||
in exploiting renewable energy | through the services provided to | electricity (cogeneration) plants and | ||||
sources. | industrial facilities. | energy storage facilities. | ||||
WIND FARMS | BORSODCHEM | HEATING POWER PLANTS | ||||
- Ács | - BC Power Plant - operation | - Ózd Power Plant | ||||
- Bábolna | - BC Power - operation | - Tiszaújváros Heating Power Plant | ||||
- Bőny | - Kazincbarcika Heating Power Plant | |||||
- Jánossomorja | MOL Petrolkémia | - Füredi út Gas-Engine Block Power Plant | ||||
- Pápakovácsi | - TVK Power Plant - operation | - Győr Power Plant | ||||
- Törökszentmiklós | - Tisza-WTP - treated water service | - Sopron Power Plant | ||||
RENEWABLE GAS | ||||||
- Debrecen - landfill gas | Heineken Soproni Sörgyár | ELECTRICITY STORAGE FACILITIES | ||||
- Nagykőrös - biogas | - heat supply | - Füredi út Storage Facility | ||||
HYDROPOWER PLANTS | - Kazincbarcika Storage Facility | |||||
- Felsődobsza | ||||||
- Gibárt |
SOLAR POWER PLANTS
- Domaszék
- Monor
- Balatonberény
- Nagykőrös
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CONSOLIDATED STATEMENT OF PROFIT OR LOSS (IFRS)
Consolidated Statement of Profit or Loss
9/30/2023 | 9/30/2022 | Change | Change | |
HUF million | % | |||
data in million HUF | non-audited | non-audited | over previous over previous | |
year | year | |||
Sales revenues | 76 850 | 62 744 | 14 106 | 22% |
Material expenses | (49 255) | (39 682) | (9 573) | 24% |
Personnel expenses | (5 763) | (4 156) | (1 607) | 39% |
Depreciation and amortization | (3 134) | (2 737) | (397) | 14% |
Other revenues, expenses, net | (5 975) | (2 813) | (3 161) | 112% |
Capitalized own production | 471 | 244 | 228 | (94%) |
Operating Profit or Loss | 13 195 | 13 599 | (404) | (3%) |
Net financial profit | 763 | (242) | 1 006 | (415%) |
Profit or loss before taxes | 13 959 | 13 357 | 602 | 5% |
Income tax expenditure | (2 661) | (2 147) | (515) | 24% |
Net profit or loss | 11 297 | 11 210 | 87 | 1% |
Of which the owners of the Parent Company are entitled to: | 11 367 | 11 205 | 162 | 1% |
Of which the minority interest is entitled to: | (69) | 6 | (75) | (1 335%) |
Base EPS (HUF/share) | 572,67 | 568,24 | 4,43 | 1% |
Diluted EPS (HUF/share) | 570,29 | 568,05 | 2,23 | 0% |
EBITDA* | 16 329 | 16 337 | (7) | (0%) |
Consolidated Comprehensive Statement of Profit or Loss
With a sales revenue increase of HUF 14,106 million,
EBITDA is equal to that of the preceding year.
Most important changes in operating profit and loss items:
• REVENUE: The substantial increase was primarily the result of the electricity and district heating |
prices fixed in an increased energy market price environment. In addition, FE-GROUP INVEST Zrt. |
is consolidated from October 2022. Revenue was also affected by the decrease in sales revenue |
due to the structure of the retail segment. |
• MATERIAL EXPENSES: Increased energy prices also have an impact here, but at the same time, |
gas costs related to the Heat and Electricity Generation segment increased in line with sales |
revenues, although partially offset by the impact of lower Retail Energy Trade expenditures. |
• DEPRECIATION: The level of depreciation is the same as in the comparative period. |
On 6/30/2023, one of the gas engines owned by ALTEO was significantly damaged; the damage |
is still being assessed and, in accordance with the principle of prudence, full impairment has |
been recognized. The malfunction is not expected to result in a significant loss of profit. |
• OTHER REVENUES, EXPENDITURES: Other expenditures increased substantially due to the |
increase in the world market price of CO2 quotas and the liability arising from the introduction of |
the Energy Efficiency Obligation Scheme (EEOS) to be recognized in the Retail segment. |
This is also where the extra profit tax is recognized, as well as the expenditures of the RPM |
Net profit or loss
Other comprehensive income (after taxes on profits)
Comprehensive income
Of which the owners of the Parent Company are entitled to:
Of which the minority interest is entitled to:
11 297 | 11 210 | 87 | 1% |
(2 176) | 7 333 | (9 509) | (130%) |
9 121 | 18 543 | (9 422) | (51%) |
9 190 | 18 538 | (9 347) | (50%) |
(69) | 6 | (75) | (108%) |
business and the difference between the market price and subsidized price granted for |
renewables produced in the METÁR system. |
*In the opinion of the Company, the profit category that can most reliably be used to measure the profitability of the Group is EBITDA (a profit category from which financial items, taxes, depreciation, and non-systematic reductions - typically impairments - have been removed).
Therefore, impairment and local business taxes and innovation contributions - if any - have been removed from the Other Revenues and | 8 |
Other expenses lines that are used to provide a more detailed elaboration of the EBITDA in the above table. |
CONSOLIDATED STATEMENT OF PROFIT OR LOSS (IFRS)
Consolidated Statement of Profit or Loss
9/30/2023 | 9/30/2022 | Change | Change | |
HUF million | % | |||
data in million HUF | non-audited | non-audited | over previous over previous | |
year | year | |||
Sales revenues | 76 850 | 62 744 | 14 106 | 22% |
Material expenses | (49 255) | (39 682) | (9 573) | 24% |
Personnel expenses | (5 763) | (4 156) | (1 607) | 39% |
Depreciation and amortization | (3 134) | (2 737) | (397) | 14% |
Other revenues, expenses, net | (5 975) | (2 813) | (3 161) | 112% |
Capitalized own production | 471 | 244 | 228 | (94%) |
Operating Profit or Loss | 13 195 | 13 599 | (404) | (3%) |
Net financial profit | 763 | (242) | 1 006 | (415%) |
Profit or loss before taxes | 13 959 | 13 357 | 602 | 5% |
Income tax expenditure | (2 661) | (2 147) | (515) | 24% |
Net profit or loss | 11 297 | 11 210 | 87 | 1% |
Of which the owners of the Parent Company are entitled to: | 11 367 | 11 205 | 162 | 1% |
Of which the minority interest is entitled to: | (69) | 6 | (75) | (1 335%) |
Base EPS (HUF/share) | 572,67 | 568,24 | 4,43 | 1% |
Diluted EPS (HUF/share) | 570,29 | 568,05 | 2,23 | 0% |
EBITDA* | 16 329 | 16 337 | (7) | (0%) |
Consolidated Comprehensive Statement of Profit or Loss
- FINANCIAL INCOME: During the relevant period, ALTEO was not adversely affected by the significant changes in the interest rate environment compared to the base period, thanks to earlier fixing of interest rates for the majority of long-term liabilities. Costs were further mitigated by eliminated interest from liabilities repaid in the intervening period. At the same time, the interest revenue realized on available outstanding cash balances was significantly higher than in the previous period, exceeding the interest cost on loan-type funds.
- INCOME TAXES: In line with significantly higher profits, income taxes (corporate tax, business tax and innovation contribution, income tax on energy suppliers) also increased.
- NET PROFIT increased by HUF 87 million (1%) compared to the base period.
- OTHER COMPREHENSIVE INCOME: ALTEO enters into hedging transactions in order to secure the purchase price of raw materials and, thereby, the profit content on heat and electricity sold at fixed prices, and to fix the interest rates on loans. Other comprehensive income includes the result of changes in the fair value of transactions - as financial instruments - that hedge the price of gas used to produce electricity at the time of setting the official heat prices and/or sold at fixed forward prices, the EUR/HUF exchange rate and interest rate changes, until the real transaction is closed. The values shown on this line are not indicative of future trends in profit or loss.
Net profit or loss
Other comprehensive income (after taxes on profits)
Comprehensive income
Of which the owners of the Parent Company are entitled to:
Of which the minority interest is entitled to:
11 297 | 11 210 | 87 | 1% |
(2 176) | 7 333 | (9 509) | (130%) |
9 121 | 18 543 | (9 422) | (51%) |
9 190 | 18 538 | (9 347) | (50%) |
(69) | 6 | (75) | (108%) |
*In the opinion of the Company, the profit category that can most reliably be used to measure the profitability of the Group is EBITDA (a profit category from which financial items, taxes, depreciation, and non-systematic reductions - typically impairments - have been removed).
Therefore, impairment and local business taxes and innovation contributions - if any - have been removed from the Other Revenues and | 9 |
Other expenses lines that are used to provide a more detailed elaboration of the EBITDA in the above table. |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (IFRS)
Equity and liabilities | data in HUF million | |||
9/30/2023 | 12/31/2022 | Change | Change | |
HUF million | % | |||
over | over | |||
non-audited | audited | previous | ||
previous year | ||||
year | ||||
Equity | 34 675 | 26 688 | 7 987 | 30% |
of which effect of Other comprehensive income | (107) | 2 069 | (2 176) | (105%) |
Long-term liabilities | 31 671 | 26 717 | 4 955 | 19% |
of which effect of Other comprehensive income | 55 | 205 | (150) | (73%) |
of which credit, loans, bonds, leasing | 25 757 | 21 177 | 4 580 | 22% |
of which Other long-term liability | 5 859 | 5 335 | 524 | 10% |
Short-term liabilities | 18 724 | 46 616 | (27 892) | (60%) |
of which effect of Other comprehensive income | 1 231 | 324 | 906 | 280% |
of which credit, loans, bonds, leasing | 2 152 | 7 577 | (5 425) | (72%) |
of which Trade payables and accruals | 8 976 | 27 271 | (18 294) | (67%) |
of which Other short-term liability | 6 365 | 11 444 | (5 079) | (44%) |
TOTAL EQUITY and LIABILITIES | 85 070 | 100 020 | (14 950) | (15%) |
- INVESTMENTS, CAPITAL EXPENDITURES Several capacity expansion and efficiency improvement projects are underway during the period and are expected to be delivered in 2023. Investments related to the projects (together with the Energigas acquisition) are recognized among Non-current assets, at a rate exceeding depreciation.
- The change in CURRENT ASSETS was primarily the result of the decrease in energy prices and the impact of energy market seasonality on trade receivables and trade payables. Falling energy prices have also reduced the level of deposits, security deposits and advance payments required. The significant increase in cash and cash equivalents is mainly due to the positive change in the generated profit and net working capital. By tying up its available cash and cash equivalents, ALTEO earns significant interest income in the short term in the rising interest rate environment.
- In addition to general loan repayments, the portfolio of LONG-TERMLIABILITIES, SHORT-TERMLOANS decreased with the repayment of the HUF 6 billion short-term loan disbursed by Wallis Asset Management Zrt. and the prepayment of the HUF 0.6 billion loan from FE-GROUP INVEST Zrt. The HUF 4 billion loan concluded with K&H in the preceding year was drawn down, and land rentals qualifying as leases under IFRS were recorded.
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ALTEO Energiaszolgáltató Nyrt. published this content on 13 November 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 13 November 2023 14:00:03 UTC.
