In the Management’s opinion, Q1 2021 results have massively confirmed ALTEO’s strategy along with the successful investment projects of the recent period.
As results for 2020 also showed, the COVID pandemic still has only moderate impact on ALTEO’s profitability compared to other, more pro-cyclical sectors, thanks in part to the protective measures put in place by the company, and the arising negative effects have been far overshadowed by the outstanding results on other activities, according to the company’s Q1 report.
Consolidated EBITDA increased by 98% year-on-year, primarily (i) on account of the remarkable profitability of the Control Center controlling heat and electricity generation, which was positively supported by the expansion of the center’s gas engine capacities last year with an additional 18 MW, (ii) within the subsidized electricity generation segment, the surplus profits of the 15 MW wind farm acquired last year and the reconstructed Gibárt Hydropower Plant contributed to EBITDA growth, and (iii) the profits of the Energy Retail segment (which was hit the hardest by the pandemic) exceeding the preceding year also supported the substantial increase in consolidated EBITDA.
Consolidated net profit shows a 137% increase over the same period last year.
Underlying this substantial growth in profit lies the strategy centering on strengthening the capabilities of the Control Center, the resulting capacity expansion implemented, and rising demand for balancing energy services. The latter is the result of the spreading of renewable energy developments ongoing in Hungary, particularly the significant expansion in solar power plant capacities.
In line with the 2020-2024 strategy presented in the fall of 2019, the implementation of the planned investment programs, the uncovering of potential investment and capital expenditure opportunities, restructuring serving as basis for other points of the strategy, as well as the implementation of required processes have all continued.
The pandemic only caused a slight deceleration in respect of the Waste Management, E-mobility and Renewable Production Management business lines launched. The rise in balancing energy prices had an unfavorable impact on the Renewable Production Management business, but for the time being this negative effect is very well compensated for by the results shown by the Control Center. We are conducting a review in order to mitigate the market risks of Renewable Production Management. ALTEO has a vested interest in the long-term stability of the regulatory market, and to this end cooperates with both the professional community and the regulator.
BC-Therm Kft., owned by ALTEO but consolidated as a lease asset, is sold by ALTEO to Borsodchem as fulfillment of its contractual obligation. The transfer of title concludes when the closing conditions are fulfilled, and the transaction does not affect ALTEO Group’s profit-generation capacity, with ALTEO responsible for the operation of the power plant until the expiration of the contract.
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