Spain's Ence records 41.4% drop in profit in 2019

Forest biomass. Author: Oregon Department of Forestry. License: Creative Commons, Attribution 2.0 Generic.

February 27 (Renewables Now) - The renewable energy business of Spanish group Ence Energia y Celulosa SA (BME:ENC) recorded a net profit of EUR 5.3 million (USD 5.8m) in 2019, a 41.4% drop from 2018 levels.

According to the latest financial report, the profit decline was owed to higher depreciation charges related to a concentrated solar power (CSP) plant acquired in December 2018 and net finance costs, which increased by a third.

The CSP plant, the 50-MW Puertollano, helped drive earnings before interest, taxes, depreciation and amortisation (EBITDA) to EUR 51.8 million, up by 14.5% year-on-year. EBITDA was partially negatively affected by the temporary closure of biomass-based plants for repowering, lower electricity prices and higher biomass costs.

The company invested EUR 127.7 million in efficiency and growth over the year, mainly to build two new biomass power plants, which were commissioned in this quarter.

Other financial details are presented in the table below:

In EUR million FY 2019 Y/Y change:
Total revenue 168.0 20.9%
EBITDA 51.8 14.5%
EBITDA margin 31% -1.7 pp
Depreciation and amortisation (29.2) 63.3%
EBIT 22.1 -14.2%
Net finance expenses (13.9) 33.7%
Pre-tax profit 8.2 -46.7%
Attributable net profit 5.3 41.4%

Energy sales volumes rose by 13.3% to 1.047 TWh in 2019, supported by the contribution of the Puertollano CSP plant and higher outputs from biomass-fired power plants, especially the ones that had been upgraded.

As of the first quarter of 2020, Ence operates 316 MW of generation capacity in Spain. This is divided between the 50-MW CSP plant Puertollano and eight biomass-based power plants totalling 266 MW.

Ence, also active in the pulp and forestry sectors, plans to further grow its renewables business and add photovoltaic (PV) projects to the portfolio. The company says it has a pipeline of 405 MW of grid-authorised projects for which locations have already been secured.

(EUR 1.0 = USD 1.095)

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Sladjana has significant experience as a Spain-focused business news reporter and is now diving deeper into the global renewable energy industry. She is the person to seek if you need information about Latin American renewables and the Spanish market.

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