Norway-based independent power producer Scatec reported a net profit of NOK95 million (~$8.5 million) in the third quarter (Q3) of 2023, a decrease of 72% year-over-year (YoY) from NOK335 million (~$30 million).

The decline in net profit can be attributed to the significant increase in operating expenses, which rose by NOK55 million (~$4.9 million) to reach NOK250 million (~$22.4 million) compared to the corresponding quarter in the previous year. The primary driver of this increase is an accrual of NOK40 million (~$3.6 million) associated with a claim from the National Irrigation Administration in the Philippines related to water fee charges for previous periods related to the lease of the Magat Dam.

Furthermore, the uptick in operating expenses for the quarter can also be ascribed to the adverse impact of foreign currency fluctuations.

The company’s revenue stood at NOK947 million (~$85 million), a 19% YoY decrease from NOK1.16 billion (~$104.4 million).

This decrease is primarily due to reduced revenues in the Philippines, stemming from decreased production, lower prices, and limited ancillary services. Net income from joint ventures and associated companies was NOK 143 million (~$12.8 million) in the quarter, a decrease of NOK236 million (~$21 million) compared to the same quarter the previous year, largely driven by reduced net income from the Philippines. Revenues in South Africa also declined due to the sale of the 258 MW Upington power project in the second quarter.

Scatec recorded earnings before interest, taxes, depreciation, and amortization of NOK686 million (~$61.5 million), a 22% YoY decrease from NOK 886 million (~$79.5 million).

“We take pride in our progress since our capital markets update and in recent months. Our dedicated team is committed to driving transformative change through world-class renewable energy initiatives spanning South Africa, the Philippines, and Brazil. Scatec has realized significant renewable growth through our highest construction activity ever, and the projects have strong economics with robust returns and attractive gross margins,” said Scatec CEO Terje Pilskog.

In July, Scatec signed an agreement with Globeleq, an independent power producer, to sell its 52.5% equity share in the 40 MW Mocuba solar power project in Mozambique for $8.5 million. The Mocuba solar power plant is located in the Zambézia Province of Mozambique and was commissioned in August 2019.

Scatec reported a net profit of NOK402 million (~$36 million) in Q2 2023, a significant improvement from the loss of NOK68 million (~$6.1 million) in Q2 2022, on higher income from renewable power generation and project development.