Reply of the Company to a Letter by HCMC

 

Following the letter of the Hellenic Capital Market Commission with protocol number 2596 / 09.11.2021, which was notified to the issuers with listed securities on the regulated market of the Athens Stock Exchange, GEK TERNA Group makes the following update regarding the formation of its financials for the 9-month period of 2021.

The increase of turnover and operating profitability (adjusted EBITDA) are the main characteristics of the financial results from continuing operations of GEK TERNA Group during the 9-month period of 2021, in which net profits from continuing operations were recorded at ¤ 31.7 million compared to net profits from continuing operations at ¤ 27.1 million in the corresponding period last year.

The construction backlog of the Group has further strengthened and is expected to reach the historic high of 4.5 billion Euros along with the projects to be signed.

The Group's investment plan continues intensively in all areas of activity (infrastructure, concessions - PPPs, energy production and storage, circular economy - environmental projects), with the total investments implemented by the Group or in which the Group participates, currently exceeding in value the level of 6.5 billion Euros. The above include the emblematic concession projects of Egnatia Odos and the Integrated Tourist Complex with Casino in Hellinikon, where the finalization of their assignment to investment schemes in which GEK TERNA Group participates is expected in the following period.

The consolidated financial figures for the 9-month period of 2021 of GEK TERNA Group are as follows:

Summary presentation of GroupΆs financial results for the 9-Month Period of 2021 from Continuing Operations

  • The consolidated sales of GEK TERNA Group amounted to 700.7 million Euros (of which 261.3 million Euros relate to the third quarter of 2021), compared to 658.5 million Euros in the corresponding period of 2020 (of which 238.6 million Euros related to the third quarter of 2020), posting an increase of 6.4%.
  • Operating results before interest and taxes (ΕΒΙΤ)1 amounted to 113.3 million Euros (of which 45.7 million Euros concern the third quarter of 2021), compared to 95.6 million Euros in the corresponding period of 2020 (of which 38.7 million Euros concerned the third quarter of 2020), recording an increase of 18.5%.
  • Operating profitability (adjusted EBITDA)[1] settled at 212.7 million Euros (of which 76.4 million Euros correspond to the third quarter of 2021), compared to 181.8 million Euros in the same period of 2020 (of which EUR 67 million corresponded to the third quarter of 2020), edging higher by 17.0%.
  • Net results of the 9-month period of 2021 from continuing operations attributable to shareholders amounted to earnings of 4.9 million Euros (13.7 million Euros in the third quarter of 2021) compared to earnings of 3.9 million Euros in the corresponding period of the previous year (EUR 1.6 million in the third quarter of 2020).

Detailed information on the results of the key operating divisions of the Group

Construction

The main financial figures of the Construction division in the 9-month period of 2021 were as follows:

  • Turnover amounted to 398.8 million Euros (of which 150.8 million Euros relate to the third quarter of 2021) compared to 390.8 million Euros in the corresponding period of 2020 (of which 136 million Euros corresponded to the third quarter of 2020).
  • Operating results before interest and taxes (ΕΒΙΤ)1 amounted to 29.4 million Euros (of which 6.5 million Euros in the third quarter of 2021), compared to 7.9 million Euros in the corresponding period of 2020 (¤ 8.0 million in the third quarter of 2020).
  • Operating profitability (adjusted EBITDA)1 amounted to 38.4 million Euros (of which 10.5 million Euros concern the third quarter of 2021) compared to 16.9 million Euros in the corresponding period of 2020 (of which ¤ 10.4 million related to the third quarter of 2020).

The construction backlog of the Group with regards to the signed contracts amounted to approximately 2.4 billion Euros, maintaining the prospects of a healthy construction activity in the next period. With the addition of the new contracts to be signed, the GroupΆs construction backlog is further rising and settling at the historically high level of 4.5 billion Euros.

Electricity from RES from continuing operations

In the division of renewable energy sources (RES), the main financial figures for the 9-month period of 2021 are as follows:

  • Turnover amounted to 150.6 million Euros (of which 52.1 million Euros relate to the third quarter of 2021), compared to 138.9 million Euros in the corresponding period of 2020 (of which 46.6 million Euros corresponded to the third quarter of 2020).
  • Operating results before interest and taxes (ΕΒΙΤ)1 amounted to 72.2 million Euros (26.1 million Euros relate in the third quarter of 2021), compared to 70.7 million Euros in the corresponding period of 2020 (22.3 million Euros concerned the third quarter of 2020).
  • Operating profitability (adjusted EBITDA)1 amounted to 104.2 million Euros (of which 36.8 million Euros relate to the third quarter of 2021) compared to 97.4 million Euros in the corresponding period of 2020 (of which 30.7 million Euros related to the third quarter of 2020).

The total Capital Expenditures on 30.09.2021 amounted to 130.6 million Euros (of which 61 million Euros correspond to the third quarter of 2021). It is worth noting that the investment plan of TERNA ENERGY, which currently exceeds 2 billion Euros, is evolving smoothly and at an intensive pace in all areas of the CompanyΆs activity. The goal remains for the total installed capacity to reach 3,000 MW within the next five years.

Concessions

In the operating division of Concessions, the key financial figures for the 9-month period of 2021 are as follows:

  • Turnover amounted to 124.2 million Euros (of which 54.4 million Euros in the third quarter of 2021) compared to 117.5 million Euros in the corresponding period of 2020 (of which 50.2 million Euros related to the third quarter of 2020).
  • Operating results before interest and taxes (ΕΒΙΤ)1 settled at 31.0 million Euros (of which 18.8 million Euros in the third quarter of 2021), compared to 33.3 million Euros in the corresponding period of 2020 (of which 14.1 million Euros related to the third quarter of 2020).
  • Operating profitability (adjusted EBITDA)1 amounted to ¤ 81.8 million (of which ¤ 35.6 million Euros in the third quarter of 2021) compared to ¤ 79 million Euros in the corresponding period of 2020 (of which 29.1 million Euros corresponded to the third quarter of 2020).        

It is reminded that the joint scheme of the entities GEK TERNA - EGIS was declared Preferred Investor for the granting of the right to use and operate “Egnatia Odos” highway and the three vertical road axes for a period of 35 years, marking the significant expansion of the Group's portfolio in the area of Concession projects.

At the same time, the new Master Plan for Kasteli Airport was approved, based on which the implementation of the project will be accelerated.

In addition, regarding the Integrated Resort Casino (IRC) project in Hellinikon, it is noted that the procedures for the assignment of the project, in which the Group participates, are further evolving.

Electricity from thermal energy and electricity trading activity

In the field of thermal energy production and electricity trading, the main financial figures for the 9-month period of 2021 are as follows:

  • In the operating division of electricity trading, the turnover in the 9-month period of 2021 amounted to 69.4 million Euros (of which 42.9 million Euros relate to the third quarter of 2021) compared to 26.5 million Euros in the corresponding period of 2020 (10.2 million Euros in the third quarter of 2020).   
  • Operating results before interest and taxes (ΕΒΙΤ)1 amounted to minus 0.2 million Euros (0.3 million Euros in the third quarter of 2021), compared to 0.7 million Euros in the corresponding period of 2020 (of which EUR 0.2 million were recorded in the third quarter of 2020).  
  • Operating profitability (adjusted EBITDA)1 in the 9-month period of 2021 amounted to minus 0.2 million Euros (0.4 million Euros for the third quarter of 2021) compared to 0.6 million Euros in the corresponding period of 2020 (of which 0.2 million Euros concerned the third quarter of 2020).

It is noted that the Group entered into an agreement for the acquisition of 75% and 50% of the companies HERON II and HERON ENERGEIAKI, respectively. Within October 2021 and after the approval granted by the competent authorities, the acquisition of the additional 75% of the shares of HERON II VOIOTIA was completed. After the approval by the competent authorities of the agreement for the acquisition of 50% of the company HERON ENERGEIAKI, the Group will own 100% of both companies. The implementation of this agreement increases the footprint of GEK TERNA in the production and trading of energy, at a critical point in time, further creating the conditions for an even more important role of the Group in the constantly changing energy market of Greece.   

The Groups of GEK TERNA and MOTOR OIL announced on 11.06.2021 their partnership for the joint development, construction and operation of the new state-of-the-art Combined Cycle Gas Turbine Station with natural gas fuel, with a combined installed capacity of 877 MW, in the Industrial Area of Komotini, Northern Greece. This is one of the most important investments in the Greek energy market, amounting to 375 million Euros, which will create about 500 jobs during the construction period and another 100 jobs during the operating period.

Main Financial Figures of the Statement of Financial Position of the Group on 30.09.2021

Regarding the accounts of the consolidated Financial Position, the following are observed:

Total Assets on 30.09.2021 amounted to 4,090 million Euros, increased by 86.3 million Euros compared to the corresponding level of 30.06.2021. The Net Debt1 of the Group (loan liabilities less cash and cash equivalents) amounted to approximately 1,268.9 million Euros on 30.09.2021, compared to 1,226.4 million Euros on 30.06.2021. It should be noted that the Group's cash and cash equivalents amounted to 1,023.8 million Euros at the end of the 9-month period of 2021.   

Total Equity on 30.09.2021 settled at 755.4 million Euros increased by 19.7 million Euros compared to the level of 30.06.2021.   

Information on the impact of the Covid-19 pandemic and the energy crisis on the GEK TERNA Group

Despite the new conditions created by the Covid-19 pandemic, the Group's activities continue as smoothly as possible, given that its main areas of activity (RES and Concessions) display important defensive characteristics. The Group has taken all necessary measures in order to continue the development of its core business (Construction, RES, Concessions) and its investment program in the energy and concessions sectors. Specifically, in the Operational Sector of Constructions, although there were delays during the lockdown period, the construction works continue without particular problems within 2021, while there is no risk of non-compliance with conventional schedules as the relevant deadlines are extended respectively. In the field of electricity from RES, there has been no shutdown of the facilities, while for the investments in the facilities under construction there has been no delay and the estimated time of completion and commissioning of the projects has not changed. Finally, in the Operational Sector of Concessions, the Group is adequately protected.

Regarding the energy crisis, the Management is constantly assessing the situation and its possible consequences, such as the recent revaluations of basic materials, equipment and services - including construction materials - in order to ensure that all necessary and possible measures are taken in time and actions to minimize any impact on the Group's activities. It is noted that the TERNA ENERGY Group has not been affected by the energy crisis given the sector in which it operates and the structure of electricity sales contracts.

Following the above and in accordance with the change of the Results and the basic elements of the financial position of the Group for the third quarter of 2021, the fundamental financial figures and the prospects of the financial situation of the Group, have not been substantially affected by the spread of Covid -19 and the evolution of the energy crisis so far.



[1]  The alternative performance measures (APM) were determined in the Semi-Annual Financial Report as of 30.06.2021 and specifically in the note “F” of the Board of DirectorsΆ Management Report.


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