Report on the Annual General Meeting of Energiekontor AG
Bremen, 23 May 2018. Today, Energiekontor AG held its Annual General Meeting in Ritterhude near Bremen. It was attended by about 120 invited shareholders, shareholder representatives and guests. In his presentation, the CEO of Energiekontor AG, Peter Szabo, reported on the current market conditions, the past 2017 financial year and the Company’s first successes in its new markets. He also described how Energiekontor AG sets itself apart from other market players in its pioneering role in the industry.
In line with the 2017 annual report figures published on 12 April, Group earnings before taxes (EBT) amounted to EUR 16.7 million (previous year: EUR 35.5 million) with consolidated net income of EUR 11.9 million (previous year: EUR 25.3 million). At EUR 202.1 million, the Group’s total output in the reporting year was well above the previous year (previous year: EUR 166.7 million), which underlines the Company’s sustained high productivity and ability to create value. Given the significant additions to Group-owned wind farms from own developments, Energiekontor AG’s earnings for the financial year were in line with expectations. At the level of the AG, Energiekontor generated net income of EUR 15.5 million (previous year: EUR 28.7 million). Given distributable profits of EUR 8,746,896.00, the Management Board and the Supervisory Board proposed to pay a dividend of EUR 0.60 for every individual bearer share with dividend rights; the proposal was accepted by a large majority.
Overall, ten wind power projects with total rated power of approximately 66 MW were commissioned, seven of which, with a total of 36 MW, were sold to investors. Half of the wind farms with about 18 MW were sold to a previous owner. The remaining three wind farms with a total of 21 MW were transferred to Group ownership. Another three projects with some 25 MW, including a solar park, were under construction at year-end. Moreover, the Company filed applications for more than 70 MW in Scotland and secured sites in West Texas for potential solar park capacity of 300 MW. To date, these secured sites have increased to 650 MW.
Upon describing the market environment, Mr Szabo pointed out the current challenges in the industry. Despite the fact that renewable energy sources meanwhile account for one third of gross electricity generation in Germany, state subsidies for renewables are decreasing across the world. Instead of the fixed feed-in tariffs to determine the remuneration for electricity from renewable energies, Germany introduced an auctioning system for solar energy in 2015 and for onshore wind in 2017. As a result, the price per kilowatt of power generated dropped by about half of the original remuneration - for solar parks within three years and for wind farms even within just one year. According to the CEO, a special regulation in wind auctions that favoured citizens' energy initiatives in terms of monetary aspects and time-line led to the massive price drop and distorted the market competition quite severely. Average bidding prices are meanwhile increasing again as these special regulations were suspended in the first two auction rounds for onshore wind 2018. The first project that Energiekontor AG has ever entered in a wind auction was among the winners of the most recent auction in May 2018.
Peter Szabo depicted the particular strengths of the Company using the Energiekontor Group’s mission statement. He explained that Energiekontor has always followed a very clear vision: a society where the energy needs are fully met by renewable energies. The most important contribution that Energiekontor can make is to realise wind farms and solar parks that have a levelized cost of electricity below the cost of generating electricity from fossil and nuclear resources. Szabo named the recent financial close for the UK onshore wind project Withernwick II as an example to show that its many efficiency measures have already rendered Energiekontor capable of realising wind farms at pure market prices by entering into long-term power purchase agreements (PPA). As far as the Company is aware, this is the first wind farm project in the UK to be realised without state subsidies.
Energiekontor AG’s self-contained growth model provides for the Group’s financial stability as the project development costs are always covered by income from the sale of electricity. In order to expand its own portfolio, half of the solar park and wind farm projects developed each year are to be included in the Group-owned portfolio. This means the potential margins, which would be realised as profits if a project was sold, remain as hidden reserves in property, plant and equipment. However, the Group-owned plants continuously generate profits over the years. Energiekontor prefers this strategy of sustainable growth, which also safeguards the business for the long term, to short-term profit-taking. At the beginning of 2018, Garzau-Garzin was the first solar park to be included in the Group-owned portfolio.
Finally, the CEO underlined the importance of the regional principle and went on to say this was the only way that the best solutions could be found for the respective needs and thus for the individual regions. The decentralised organisational structure with its flat hierarchical structure in the Company and the individual responsibility and autonomy given to the employees also provide a motivated, creative working environment in which every single person can use individual knowledge and talents to contribute to achieving these excellent results.
While many project developers have more or less similar business models, this triad is, according to Mr. Szabo, probably unique in the industry. It therefore forms the backbone of the Company’s entire growth strategy. The 2018 financial year is expected to be a year of transition, followed by a return to significant Company growth in 2019. This growth will be driven by the expansion of the solar business both in Germany and abroad as well as the realisation of the first large projects in the Scottish project pipeline, the establishment of Energiekontor in the new markets of The Netherlands, France and the US as well as first PPA-based projects in Germany that are to be realised outside of the provisions of the existing German Renewable Energy Sources Act (EEG).
About Energiekontor AG:
For the last 25 years, Energiekontor has stood for a sound approach to business and a wealth of experience in wind power. Formed in Bremerhaven in 1990, the Company was one of the pioneers in the industry and is now one of the leading German project developers. Its core business covers the planning, construction and operational management of wind farms in Germany and abroad, and was expanded to include solar power in 2010. Energiekontor also currently owns and operates 34 wind farms and one solar park with total rated power of nearly 270 megawatts. Now, Energiekontor AG intends to extend its pioneering role to commercial aspects and to realise wind farms and solar parks at market prices without state subsidies in all target markets as quickly as possible.
In addition to its headquarters in Bremen, Energiekontor also maintains offices in Bremerhaven, Hagen im Bremischen, Aachen, Bernau (near Berlin), Potsdam and Dortmund. The Company also has branch offices in England (Leeds), Scotland (Glasgow), Portugal (Lisbon), the Netherlands (Nijmegen), the US (Austin/Texas) and France (Toulouse). The formation of an additional branch office in France is currently in the making.
Our track record speaks for itself: We have realised 118 wind farms with total rated power of around 940 megawatts and three solar parks with total rated power of about 30 megawatts. This corresponds to an investment volume of more than EUR 1.6 billion.
Energiekontor went public on 25 May 2000. The shares of Energiekontor AG (WKN 531350/ISIN DE0005313506) are listed in the General Standard segment of the Frankfurt Stock Exchange and can be traded on all German stock exchanges.
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