Positive forecast: ENCAVIS also wants to increase sales and profits in 2021 – share drops | message


The solar park and wind power plant operator ENCAVIS is forecasting further growth for the current year. The new MDAX member intends to increase its operating result more than twice as much as in the previous year, according to the annual report published the previous evening in Hamburg. The Corona crisis hardly hit Encavis in 2020. While sales are expected to grow by more than 9 percent year-on-year to over 320 million euros, Encavis is maintaining earnings before interest, taxes, depreciation and amortization (Ebitda) – adjusted for one-off effects, among other things – an increase of almost 7 percent to over 240 million euros possible. The management refers to the two newly connected Spanish solar parks “La Cabrera” and “Talayuela” with a maximum generation capacity of 200 and 300 megawatts. In the current year, these will for the first time make a year-round sales and earnings contribution.

With the dividend, too, the management remains true to the practice of recent years: This is to be increased from 26 cents in the previous year to 28 cents. Analysts had already expected this. Since 2016, the dividend has increased by 2 cents a year.

On Wednesday, the news was received with skepticism on the stock exchange: Most recently, the Encavis shares were around 6 percent lower. Jefferies analyst Martin Comtesse described the targeted growth in sales and profits for 2021 as disappointing. He suspects this is due to the persistently low energy prices in Spain. Encavis operates its two largest solar parks here. According to Comtesse, the business figures for 2020 are as expected.

According to the annual report, the organic growth of the portfolio of wind and solar parks should remain the basis for achieving the strategic goals. At the beginning of 2020, Encavis set the goal of doubling its generation capacity by 2025, from 1.7 gigawatts (GW) at the time to 3.4 GW. In the same period, sales are expected to rise to 440 million euros and the operating result to 330 million euros.

For the past year, the increase in capacity was organically 0.2 gigawatts, as well as around 0.1 gigawatts through acquisitions, Encavis announced at the request of the financial news agency dpa-AFX. Inorganic growth also remains on the agenda: According to its own statements, the company intends to concentrate primarily on plants that benefit from guaranteed feed-in remuneration or are secured by long-term contracts with industrial customers.

In the past financial year 2020, Encavis also benefited from the continued change from conventional to renewable energy sources. This continued unaffected despite the pandemic. In the European Union, 2020 was the “greenest” electricity year of all time.

According to the figures, sales in 2020 rose by 18.5 to 292.3 million euros compared to the previous year. Experts had expected less. The adjusted Ebitda was meanwhile able to increase by 3 percent to 224.8 million euros. However, the corresponding margin fell from 79.5 to 77 percent. The Ebitda development has benefited from the ongoing portfolio expansion as well as the income from the sale of minority shares in three wind farms in Austria, it said. After taxes, the Encavis shareholders earned around 60 million euros in profits, almost 4 million euros more than in the previous year.

ENCAVIS are clearly falling behind – a strong year is not enough

ENCAVIS investors were only pleased about their promotion to the MDAX for a short time. On Wednesday, the titles of the operator of solar parks and wind turbines fell according to the annual figures and the forecast for 2021 at times by more than ten percent to a low since the end of October. Most recently, the minus via XETRA was 6.12 percent at 16.58 euros, which put them in last place in the index of medium-sized stocks and listed below the much-noticed 200-day line for the long-term trend.

There were somewhat more critical market voices on the outlook. It was said to be a bit conservative and disappointing. Analyst Jan Bauer from Warburg Research also downgraded the shares from “Buy” to “Hold”, but justified this with the only limited potential up to his price target of EUR 18.70. 2020 was a strong one for ENCAVIS despite the pandemic.


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