28 February 2023

Soltec exceeds forecasts with a net profit of 13.1 million euros

  • The group’s net profit came to EUR 13.1 million in the period, compared to EUR -1.2 million in 2021
  • Revenues for the year reached EUR 568 million (compared to EUR 347 million in 2021, up 64%), reaching a company record, with 3.8 GW delivered in the year, thanks to strong demand for solar trackers and vertical integration
  • EBITDA margins in the industrial division reached 12.7% in the fourth quarter of the year (4.7% in full year 2022), consolidating the positive trend in the division’s margins
  • The results have exceeded forecasts and are above analysts’ consensus, as well as the guidance provided to the market

Soltec has published its financial results for the 2022 financial year this morning, achieving a net profit of EUR 13.1 million, representing an improvement of EUR 14 million compared to 2021. In addition to the economic factors that prove the strength in demand, Soltec has implemented the right strategy to cope with the economic situation and accelerate the advance of the recovery.

Thus, the company has reached a record annual turnover of EUR 568 million, an increase of EUR 222 million compared to the figure of EUR 347 million reported in 2021 (+64%).

It should also be noted that Soltec recorded EUR 165 million in revenues in the fourth quarter of the year, achieving a quarterly record for the company, 5 million above the

EUR 160 million recorded in the same quarter of 2021 (+3%). These revenues are explained by three main factors: the strength of demand for solar trackers globally, the value proposition of the solar tracker compared to other alternatives and the company’s positioning in high-growth markets in the photovoltaic sector.

Likewise, adjusted EBITDA exceeded EUR 32.6 million, an increase of EUR 39.5 million from EUR -6.9 million in 2021. This EBITDA represents a consolidated margin of 6% over revenues and consolidates the positive trend that the company began to observe in the second quarter of the year. This positive development in profitability is largely due to the strength of demand, the result of the measures implemented over the last few quarters to counteract the disruptions that have plagued the photovoltaic industry, as well as the improvement in international logistics conditions.

The figures achieved in 2022 confirm the sector’s sound recovery, after a very difficult start to 2022 stemming from the geopolitical tensions in Europe, coupled with the Omicron COVID variant, and which have shown a positive upward trend throughout the year despite the instability of the financial markets and the duration of the war in Europe.

Raúl Morales, Soltec CEO states: “After a very challenging start to 2022, business performance has continued to improve throughout the year, surpassing all-time records in the fourth quarter in terms of revenues as well as profitability. These results confirm our strong commitment to vertical integration and the robustness of our business model. In this regard, our roadmap is to further integrate the company and improve operational efficiency.

Thanks to the quality of the projects we have under development and the financing obtained at the beginning of 2023, we have all the necessary ingredients to execute our business plan with a view towards 2025 and make a significant contribution to the energy transition in the countries where we operate”.


Industrial division: record demand and unique value proposition

The industrial division (Soltec Industrial) has demonstrated its global leadership position in the supply of solar trackers, with an accumulated track record of 15.6 GW, having supplied 3.8 GW in 2022.

Out of the industrial division’s revenue, 74% comes from the sale of solar trackers, and 26% corresponds to the other services provided by the company (installation, civil works, etc.).

This division achieved a margin of 4.7% in the year ended 2022, while in the fourth quarter of the year it recorded EUR 163.3 million in sales, and an EBITDA margin of 12.7%.

In terms of the division’s operating indicators, the backlog (signed contracts pending execution) reached EUR 252 million in contracts for the supply of solar trackers and other additional services, corresponding to 1.2 GW of projects, while the pipeline (contracts with a certain probability of execution) came to EUR 3,637 million.

Development division: balanced pipeline

The photovoltaic project development division (Soltec Development) closed the year with a pipeline of 14.4 GW in projects at different stages of completion, spread across eight countries: Spain, Italy, Denmark, Romania, Brazil, Colombia, the United States and Mexico. It should be noted that the aim of this division is to develop projects up to RTB (“Ready to build”), at which point they are sold to a third party or to the asset management and operation division (Soltec Assets).

Soltec Development has rotated 372 MW over the 2022 financial year in Spain and Italy, and currently has several M&A processes open in different geographical regions with strong interest, given the high quality of the assets under development.

The pipeline of projects under development is geographically balanced, with 44% of projects located in Europe and 56% in the Americas.

It is also worth mentioning that the company obtained favourable environmental impact statements (DIA) for 401 MW in January 2023, corresponding to 16 projects in Murcia and Alicante. With these, and in accordance with Royal Decree Law 23/2020, Soltec now has all the necessary environmental impact statements, the deadline for which expired in January 2023.

Asset management division: differentiation and risk minimisation

Last year, Soltec began implementing its 2022-2025 Strategic Plan, through which it announced the creation of a new business line focussing on asset management: Soltec Assets. Through this division, the company expects to obtain an additional revenue stream from the sale of energy that will provide the company with strong, recurrent, stable income. It also allows the company to differentiate itself from its competitors and maximise the value of its projects, mitigating existing risks in the value chain thanks to geographical and business diversification.

There are currently 138 MW of assets under construction in Brazil (Araxá) and in Spain (La Isla, Totana IV and Los Valientes I and II), as well as 117 MW in operation corresponding to two projects in Spain and Brazil.

Soltec Assets is expected to have a portfolio of close to 1 GW by 2025.

In January 2023, Soltec announced the signing of a EUR 100 million financing agreement with the credit fund advised by Incus Capital to finance its renewable asset management and exploitation business (Soltec Assets). With this transaction, Soltec seeks to enhance the value and accelerate the growth of this division dedicated to the investment, exploitation, and management of renewable energy assets. It also guarantees the construction and operation of some of the projects in the project development portfolio, mainly in Europe (Spain, Italy) and Brazil.

Outlook 2023

Although the environment remains challenging and complex, the company is anticipating positive trends in the PV sector for 2023, driven by the global need to increase energy independence and strengthen the industrial chain, coupled with the good value proposition of solar trackers in countries with high solar irradiation.

The photovoltaic industry is at an unprecedented moment. Each nation has taken steps to accelerate the journey towards energy security and lower energy costs. The United States has already implemented various protectionist measures to boost its production of renewable components. The IRA guidelines are expected in the middle of the second quarter of the year, and from that moment on, the impact on the sector will have to be evaluated, which is expected to be by the end of 2023 and, essentially, the year 2024.

Likewise, the Spanish government clearly supports the development of renewable energies, and recent environmental authorisations gave the greenlight to a large number of projects whose construction will start at the end of 2023 and in 2024.

Based on industry trends and regional regulatory developments, the company expects high demand for the industrial division, which will clearly materialise at the end of 2023 and during 2024.

The company also expects EBITDA margins to improve to the range of 6-7% on an annualised basis.

Guidance 2023

About Soltec Power Holdings

Soltec Power Holdings (ticker: ‘SOL’) is a company specialising in vertically integrated solutions in the solar PV sector, with a strong commitment to innovation and sustainability. Headquartered in Murcia, the company was founded in 2004 and currently operates in 16 countries, with a strong presence in Spain, North America and Latin America. The company has been listed on the Spanish Continuous Market since 2020.

Soltec structures its activity through three main business areas: i) the photovoltaic project development division, with a strong environmental, social and good governance commitment, under the Powertis brand; ii) the industrial division, Soltec is the third largest manufacturer of solar trackers in the world, offering its customers additional construction services to ensure a complete and integrated value proposition; iii) Soltec Asset Management, a third business division through which Soltec manages the assets that the company holds in its portfolio, with the aim of maximising its profits in the medium and long term.