Enlight Renewable Energy .(US:ENLT)2024-05-12 14:45Financial Data and Key Metrics Changes - The company's revenue increased to $90 million, up 27% year over year from $71 million, driven by new operational projects despite lower electricity prices in Spain [36][85] - Adjusted EBITDA grew by 28% to $68 million compared to $54 million in the same period last year [66][85] - Net income declined by 26% to $24 million from $33 million last year due to unusually high finance income in 2023 [66][85] Business Line Data and Key Metrics Changes - The Gecama project generated approximately $20 million in revenues, but its contribution fell 6% year over year due to lower Spanish power prices [6] - In Israel, 7 of the 12 solar plus storage cluster units are now operational, contributing $3 million, compared to none in the same period last year [14] - The Atrisco project in New Mexico is on schedule, with the solar component expected to reach COD in Q3 and the storage part in Q4 [8][33] Market Data and Key Metrics Changes - European energy prices are normalizing, leading to more attractive project acquisition opportunities [3] - In Spain, the average selling price of power was €65 per MWh this quarter, down from €85 per MWh in the same period last year [6] - The U.S. market is experiencing rising power demand, particularly from data centers, which is expected to drive PPA pricing higher [4][86] Company Strategy and Development Direction - The company plans to triple its generation and storage capacity to 5.1 GW and 5.7 GWh by 2026 [2] - The focus is on executing a robust project portfolio, with several projects expected to start construction in 2024 totaling 810 MW and 2.0 GWh [8][76] - The company is exploring M&A options related to the increasing electricity demand from data centers [42] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the operational track and the ability to meet construction timelines for major projects [46] - The company does not expect lower merchant prices to impact its financial outlook for 2024, with a resilient strategy in place [65] - Long-term power prices in Europe remain high, reflecting attractive returns for the operational and development portfolio [68] Other Important Information - The company reached financial close on two smaller projects in Hungary, recovering $29 million of excess equity invested [3] - Equipment prices for solar panels and batteries have fallen by 30% to 35% since the beginning of 2023, contributing to improved project returns [8][34] - The company has $325 million of revolving credit facilities available, none of which have been drawn [37] Q&A Session Summary Question: Changes in module supply due to AD/CVD case - Management noted that the market remains stable in terms of supply and pricing, with a focus on increasing U.S. content [16][17] Question: Timing for securing domestic content adder - The company is aligning projects to benefit from domestic content, expecting to secure the adder by 2027 [19] Question: Participation in RFPs from data centers - Management indicated that they are exploring opportunities related to increased demand from utilities driven by data centers [42][43] Question: Expectations for bottlenecks in project execution - Management expressed confidence in their operational and procurement decisions to avoid bottlenecks [46][47] Question: Impact of low merchant pricing in Spain - Management reassured that even with a 50% reduction in merchant prices, EBITDA would only drop by 2% from the midpoint of guidance [65][49] Question: Availability of tax equity for U.S. development pipeline - Management indicated strong demand for tax equity due to long-term PPAs and a solid project profile [51]