Norway-based independent power producer Scatec reported a net loss of NOK 26 million (~$2.3 million) during the first quarter (Q1) of 2024, marking an improvement of 73% on a year-over-year (YoY) basis from a net loss of NOK98 million (~$8.8 million).

While the company got a tax benefit of NOK12 million (~$1.08 million) during the quarter, the overall profit for the quarter was still negative.

The company said its distribution of profits between non-controlling interests (other investors) and Scatec is influenced by the fact that the non-controlling interests or NCI only represent shareholdings in fully consolidated power projects, whereas Scatec bears the costs of project development, construction, operation & maintenance, and corporate functions.

Profits allocated to NCI do not include net income from joint ventures and associated companies.

During the January and March period, Scatec recorded a revenue of NOK1.2 billion (~$ 108.4 million), a 44.9% YoY increase, and achieved EBITDA of NOK848 million (~$76.6 million), a 10.8% YoY increase.

The increased contribution from newly operational projects was the primary factor behind the rise in EBITDA.

During the quarter, the company completed its most extensive construction program to date, achieving commercial operations for solar plants in Mendubim, Brazil, and Sukkur, Pakistan.

Alongside the Kenhardt hybrid solar and battery storage plant in South Africa, which commenced operations the previous quarter, these projects were pivotal in driving significant revenue and EBITDA growth.

Power production reached 901 GWh in the quarter, up from 887 GWh in the same quarter last year on a proportional basis, generating revenues of NOK1.06 billion (~$885 million).

Scatec also initiated construction on 333 MW of solar power at the Grootfontein plant in South Africa and the first phase of a solar complex in Botswana.

These projects are expected to yield development and construction revenues of NOK2.5 billion (~$225.9 million) during the construction period, with an estimated combined gross margin aligning with the company’s 8-10% guidance.

The equity returns surpass Scatec’s hurdle rate of 1.2x cost of equity, underscoring the company’s dedication to adding profitable growth to its portfolio.

Development and construction revenues for the quarter amounted to NOK152 million (~$13.7 million), with a gross margin of 49%, including a contingency release for Kenhardt. The underlying gross margin for the new projects under construction stood at 9%.

Scatec CEO Terje Pilskog said, “In recent months, we finalized the largest construction program in Scatec’s history, and we celebrated the inauguration of our two largest plants to date: Mendubim in Brazil and Kenhardt in South Africa. We have commenced commercial operations at our solar plant in Pakistan and marked the official ceremony for the Mmadinare solar complex in Botswana. It fills me with immense pride to have been part of these milestones, witnessing firsthand how these projects drive the green transition and bring positive change to local communities and individuals’ lives.”

The company reported a net profit of NOK724 million (~$70 million) in the fourth quarter of 2023, improving from a loss of NOK433 million (~$41.5 million) a year ago, as the company executed various asset sales in the quarter to streamline its operations.

Scatec’s net profit in the previous quarter fell 72% compared to last year on a significant increase in operating expenses 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.