Release Date: July 16, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Successful completion of the joint venture between Aker Carbon Capture and SLB, resulting in a net accounting gain of NOK4.9 billion.
- Mainstream Renewable Power expanded its footprint in Australia with a 2.5 gigawatt offshore wind feasibility license and a 500 megawatt onshore wind investigative permit.
- Positive recommendation for the 2.5 gigawatt Mareld floating offshore wind farm in Sweden.
- Significant progress in the hydrogen segment, including the scaling up of the Rjukan Project to 40 megawatts gaseous hydrogen capacity.
- Strong market interest and cooperation agreements for data center development in Northern Norway.
Negative Points
- Mainstream Renewable Power faced challenges in Chile due to decreased transmission capacity and lower wind resources.
- The Elena wind farm in Chile experienced delays due to an incident with a turbine tower.
- The regulatory framework for offshore wind in Vietnam remains unclear, delaying the commercialization of the Sock Chang project.
- Mainstream Renewable Power reported a loss of NOK393 million, with Aker Horizons' share being NOK201 million.
- Liquidity decreased by NOK256 million since Q1, driven mostly by currency exchange rate changes and underlying cash use.
Q & A Highlights
Q: How does ACC plan to use the proceeds from the SLB ACC transaction?
A: Kristian Rokke, CEO: The Board of Directors of ACC ASA is in the process of defining the future strategy and structure of the company, including the framework for the use of proceeds. These are important topics and will take some time, with the Board reverting to the market in due course.
Q: What are the plans for the Sock Chang wind park in Vietnam, including FID and commercial operation dates?
A: Mary Quaney, CEO of Mainstream Renewable Power: The Sock Chang project is in late-stage development and ready for commercialization. However, the regulatory framework in Vietnam has been slow to establish, delaying the FID. Timing of FID will follow once the regulatory framework is determined.
Q: How has construction in South Africa and Chile progressed in the first half of the year, and what are the key milestones for the second half of 2024?
A: Mary Quaney, CEO of Mainstream Renewable Power: In South Africa, the 97.5 MW solar project is on track for COD in the first half of 2025. In Chile, construction on the 109 MW Ckhúri wind farm has recommenced, with substation work ongoing and COD targeted for 2025.
Q: How far along are discussions with data center players, and when is a transaction expected?
A: Kristian Rokke, CEO: Significant interest has been shown in our sites in the Narvik area. We expect significant developments and a transaction within the next 12 months.
Q: Mainstream reported EBITDA of EUR5 million in Q2 versus negative EUR8 million in Q1. How should we understand the underlying cost development performance in Q2 versus Q1?
A: Mary Quaney, CEO of Mainstream Renewable Power: The underlying performance in Q2 is stable relative to Q1. The cost base reduction target of over 30% annual savings is on track.
Q: Regarding the EUR20 million incoming cash from the Tariff Stabilization Law in Chile, is the cash inflow capped at EUR37 million by year-end 2024?
A: Mary Quaney, CEO of Mainstream Renewable Power: Yes, the cash inflow is expected to be a maximum of EUR37 million by year-end, and we do not expect this amount to increase.
Q: Can you elaborate on the key prioritizations for Mainstream going forward?
A: Mary Quaney, CEO of Mainstream Renewable Power: Key targets include completing construction programs in South Africa and Chile, advancing late-stage pipeline projects, and continuing cost reductions.
Q: What are the financial highlights from Aker Horizons' asset development?
A: Kristoffer Dahlberg, CFO: The Rjukan Project has been upscaled to 40 MW of gaseous hydrogen capacity. The Narvik Green Ammonia project has strong market interest, and discussions with data center players are progressing. The main priority is on Norwegian projects for short-term value creation.
Q: What is the status of the Mareld floating offshore wind farm in Sweden?
A: Mary Quaney, CEO of Mainstream Renewable Power: The County Administrative Board has recommended government approval for the Mareld project. The government is expected to make a final decision by the first half of 2025, with financial close targeted for 2028 and first electricity production by 2032.
Q: What are the financial results for Aker Horizons in Q2 2024?
A: Kristoffer Dahlberg, CFO: The SLB transaction in ACC resulted in a gain of NOK4.9 billion. Mainstream reported a positive EBITDA of NOK55 million, but a net loss of NOK393 million. Total net income for Aker Horizons was close to NOK4.4 billion, with Aker Horizons' share being NOK1.8 billion.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
