GuruFocus - Release Date: November 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- HELLENiQ ENERGY Holdings SA (HLPMF) reported a strong operational performance across all business units, including refining, marketing, and renewables.
- The company achieved a nine-month EBITDA of three-quarters of a billion, indicating robust financial health.
- Renewables are becoming more noticeable in the company's numbers, with plans to reach one gigawatt of capacity in the next 18 months.
- The company has approved an interim dividend of 20 cents per share, reflecting confidence in its financial outlook.
- HELLENiQ ENERGY Holdings SA (HLPMF) has successfully refinanced its debt, resulting in lower spreads and extended maturity profiles, improving financial stability.
- The benchmark refining market environment was one of the worst in years, negatively impacting third-quarter results.
- There is a delay in the renewables project due to connection terms, affecting the timeline for reaching net-zero electricity supply.
- The company faces challenges with inappropriate trading practices in the domestic market, impacting margins.
- HELLENiQ ENERGY Holdings SA (HLPMF) is dealing with the impact of a solidarity contribution, which affected financial results.
- There is uncertainty regarding the timeline and outcome of strategic decisions related to the company's stake in DEPA and its joint venture with Edison.
A: The overperformance depends on market volatility, and while it was low this quarter, we hope to see more opportunities in the future. Regarding DEPA, we expect a resolution within the next quarter, and selling to the state is an option. The one gigawatt renewables target has been delayed by about six months due to connection term delays.
Q: Can you explain the strong performance in the domestic marketing segment?
A: Our domestic marketing has been strong due to groundwork in the companies, increased market share, premium product penetration, and a new loyalty platform. However, challenges include price controls and inappropriate trading practices. Despite these, our marketing strategies and investments in human resources and digital transformation are yielding positive results.
Q: With many companies investing in renewables in Greece, are you concerned about market saturation and oversupply?
A: We are aware of the potential for oversupply, especially during high sun or wind periods. To mitigate this, we focus on asset positioning, adding battery storage, and leveraging our large short position in the market. Our projects are designed as hybrid projects, and we are awaiting legislation to enable these.
Q: Could you provide details on the pricing profile for your renewables business, particularly for the capacity coming online by 2026?
A: Our current portfolio is under feed-in tariffs and CFDs, while the next batch will mostly be through PPAs with limited merchant exposure. The PPAs typically range from eight to fifteen years.
Q: What is driving the rise in refining margins for the Aspropyrgos refinery, and what is the feasibility of reaching the one gigawatt renewables target by early 2026?
A: The Aspropyrgos refinery benefits from the strength in straight-run fuel oil due to the loss of similar Russian barrels. The one gigawatt renewables target is fully secured, with projects either under construction or ready to build. We expect CapEx for 2025 to be around 400-450 million euros.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.