Interim / Quarterly Report • Sep 21, 2023
Interim / Quarterly Report
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Industrial Commercial Technical Societe Anonyme 85 Mesogeion Ave., 115 26 Athens, Greece Societe Anonyme Reg. No. 318/06/Β/86/28 GENERAL COMMERCIAL REGISTER No. 000312701000
for the period ended as of June 30th , 2023
(1 January - 30 June 2023)
According to article 5 of Law 3556/2007 and relevant executive decisions of Hellenic Market Commission Board of Directors
| I. | REPRESENTATIONS OF THE MEMBERS OF THE BOARD OF DIRECTORS 3 | |
|---|---|---|
| II. | SEMI-ANNUAL MANAGEMENT REPORT OF THE BOARD OF DIRECTORS OF "TERNA ENERGY | |
| ANONYMOUS INDUSTRIAL COMMERCIAL TECHNICAL COMPANY" ON THE CONSOLIDATED AND | ||
| COMPANY FINANCIAL STATEMENTS FOR THE PERIOD 01/01/2023 - 30/06/2023 | 4 | |
| III. | INDEPENDENT AUDITOR'S REPORT20 | |
| IV. | NOTE AND DISCLOSURES OF FINANCIAL STATEMENTS 32 | |
| 1. | GROUP GENERAL INFORMATION32 | |
| 2. | FRAMEWORK FOR THE PREPARATION OF THE FINANCIAL STATEMENTS 33 | |
| 3. | RISK MANAGEMENT37 | |
| 4. | CONSOLIDATED COMPANIES AS AT 30/06/202338 | |
| 5. | SEGMENT REPORTING46 | |
| 6. | INTANGIBLE ASSETS 51 | |
| 7. | RIGHTS IN USE OF ASSETS52 | |
| 8. | TANGIBLE ASSETS52 | |
| 9. | OTHER LONG-TERM RECEIVABLE53 | |
| 10. | FINANCIAL ASSETS – CONCESSIONS54 | |
| 11. | TRADE RECEIVABLES, RECEIVABLES FROM CONTRACTS WITH CUSTOMERS, PREPAYMENTS AND | |
| OTHER RECEIVABLES 54 | ||
| 12. | CASH AND CASH EQUIVALENTS 57 | |
| 13. | LOANS57 | |
| 14. | LEASE LIABILITIES 59 | |
| 15. | FINANCIAL DERIVATIVES 60 | |
| 16. | OTHER PROVISIONS61 | |
| 17. | GRANTS 62 | |
| 18. | SUPPLIERS, ACCRUED AND OTHER LONG – TERM AND SHORT-TERM LIABILITIES62 | |
| 19. | SHARE CAPITAL RESERVES AND EARNING PER SHARE63 | |
| 20. | INCOME TAX – DEFERRED TAXATION 65 | |
| 21. | OTHER INCOME/(EXPENSES)66 | |
| 22. | INVESTMENT INCOME FINANCIAL INCOME-(EXPENSES)67 | |
| 23. | 23. PERSONNEL NUMBER68 | |
| 24. | TRANSACTIONS WITH RELATED PARTIES 68 | |
| 25. | FAIR VALUE MEASUREMENT71 | |
| 26. | EFFECTIVE LIENS73 | |
| 27. | CONTIGENT ASSETS AND LIABILITIES 73 | |
| 28. | EVENTS AFTER THE REPORTING DATE OF STATEMENT OF FINANCIAL POSITION78 | |
(according to article 5, par. 2, Law 3556/2007)
The following representatives:
To the best of our knowledge that:
The Certifiers
Chairman of the BoD Chief Executive Officer Member of the BoD
George Peristeris Emmanouil Maragoudakis George Spirou
This Semi-Annual Report of the Board of Directors, which refers to the interim period from 1 January to 30 June 2023, has been prepared and is in compliance with the provisions of law 4548/2018 and article 5 of Law 3556/2007, as currently in force and the executive resolutions issued by the Board of Directors of the Hellenic Capital Market Commission (article 4 of the decision number 8/754/14.4.2016 of the Board of Directors of the Hellenic Capital Market Commission).
The financial statements have been prepared in accordance with the International Financial Reporting Standards adopted by the European Union and in particular IAS 34.
This Report summarizes the financial information for the half-yearly reporting period , and the major events that occurred (before and after the reporting date of the Financial Statements). Furthermore, it describes the main risks and uncertainties that the Group may be exposed to during the second semester of 2023 and, finally, provides a list of the significant transactions that took place between the issuer and its related parties.
Despite the continuing geopolitical uncertainty related to the war in Ukraine, high inflation and the subsequent tight monetary policy, the Greek economy appears to maintain in the first half of 2023 a considerable part of the growth momentum of the previous year. As a result, economic growth continued in the first quarter of the year but at a slower pace compared to the pace of the post-pandemic period of the previous year. Consequently, economic growth continued in the second quarter of the year but at a more moderate rhythm compared to the post-pandemic period of the previous year. GDP in the second quarter of 2023 strengthened by 2.7% on an annual basis, while it recorded an increase of 1.3% compared to the previous quarter. This was assisted by higher investment and growth in private consumption (at a lower rate compared to the same period last year). In total in the first half of the year, Greek GDP grew by 2.3% on an annual basis. It is notable that the rate of growth of Greek GDP in the first half of the year was higher than that of the European Union over the same period, standing at 0.8% (and 0.5% for the second quarter).
At the component level, in the second quarter of 2023, private consumption increased by 3.2% and investment (Gross Fixed Capital Formation) increased by 7.9%. On the other side, Public consumption decreased by 1.4% with imports increasing by 0.6% and exports increasing by 0.1%.
On the inflation front, the downward trend that started at the end of 2022 continued in line with the decline in international energy prices. In contrast, food inflation peaked in December 2022 with a slow deceleration expected. Based on the latest ELSTAT data for June 2023, the harmonized consumer price index for June 2023 stands at 2.8% on an annual basis compared to 4.1% for May, with the decline, however, mainly focused on the prices of energy products, while the upward trends continued for food commodities. As a result, structural inflation reached 4.8% for June despite a decline from 7.8% in May, continuing to burden the cost of living.
Semi-Annual Financial Report for the period from January 1st to June 30th, 2023 (Amounts in thousands of Euros unless mentioned otherwise)
At the level of leading indicators, the Economic Climate Index in Q2 2023 slightly increased compared to the previous quarter (109.0 vs. 106.9) and the corresponding quarter of the previous year (105.1). Business expectations significantly strengthened in the recent quarter compared to the previous quarter in Services, moderately in Retail Trade and Construction, and declined moderately in Manufacturing. The Consumer Confidence Index improved markedly in the April-June period compared with the previous quarter, to -36.7 (from -43.3). At the same time, it is moving sharply higher compared to a previous year (-53.0 points).
Regarding the expected trend to the end of the year, the Greek economy is expected to maintain at least a similar expansion rate, with most institutions estimating a growth rate of 2.3%. The easing of inflationary pressures and the benefits from the implementation of targeted private and public sector investment, combined with the lower-than-expected slowdown of the European economies and the positive contribution of tourism are expected to have an important impact. On the other hand, the peak of tight fiscal policy but also the continuing normalization of private consumption growth and the rate of import growth are factors that will have an impact on economic activity.
For the years ahead, however, the Greek economy is expected to accelerate further at higher rates than the European average, with the latest estimations of the Bank of Greece projecting a 3.0% boost in GDP for 2024 and 2.7% for 2025. Prerequisites for the realisation of these forecasts are the further de-escalation of the geopolitical crisis, the decrease of the energy prices and the gradual adjustment of the European Economies to the new environment of monetary and fiscal policy tightening. Regarding Greece, the continuing solid performance of tourism, the implementation of the envisaged investments and the further reduction of the commercial trade deficit will continue to be a key factor.
An important opportunity for the Greek economy is the upgrade of the country's credit rating. In early September, the DBRS rating agency (one of the 4 officially recognized by the European Central Bank) upgraded the rating of Greek government bonds to "BBB-", placing them within investment grade for the first time since the financial crisis, an event that is expected to have significant benefits for the Greek economy. In this context, the Parliamentary Budget Office estimates that the recovery of the investment grade and the diffusion of lower borrowing costs to the private sector could boost GDP growth by 0.5 percent for 2024 compared to the baseline scenario of an average increase in private investment.
The increase in investment activity through the actions of the European Commission's Recovery and Resilience Facility (RRF) is also expected to have a significant impact. Greece has so far received €11 billion in funding (pre-financing and the first 2 tranches) and has already submitted a request for a disbursement of €1.7 billion under the 3rd tranche. In total, 425 investment projects have been submitted for RRF loans for a total value of 15.7 billion by May 2023 (of which 6.4 billion RRF loans, 3.8 billion equity and 5.5 billion bank loans). Up until now about 178 financing agreements have been signed for a total value of 6,8 billion. As regards grants, by the end of March, 617 projects have applied for a total of 17.8 billion, while 3.2 billion of disbursements have already been implemented.
Since the beginning of the year and the partial de-escalation of geopolitical tensions, the energy market has entered a phase of normalisation with many parameters remaining volatile, however, affecting visibility in the medium term. Combined with lower demand as a result of high prices and milder temperatures prevailing during the winter period, leading to a continuation of the energy price deceleration that was observed at the end of 2022 and a further decline in the first half of 2023. Indicatively, Title Transfer Facility
Semi-Annual Financial Report for the period from January 1st to June 30th, 2023 (Amounts in thousands of Euros unless mentioned otherwise)
(TTF) prices fell from record levels in the third quarter of 2022 ( an average of 206 EUR/MWh) to 76.3 EUR/MWh in December and continue their downward trend, closing at 25.8 EUR/MWh for June 2023. In a similar pattern, the electricity price on the wholesale market showed an average price of 142 EUR/MWh for the first half of the year (100 EUR/MWh for June) compared to around 300 EUR/MWh for 2022.
The electricity demand in the first half of 2023 recorded a decline of 8.5% on an annual basis, mainly influenced by the seasonally high temperatures that prevailed during the first months of the year (compared to very low temperatures for the corresponding months of 2022) and by the measures to limit consumption of households and businesses.
The reduced demand led to a reduction in production from thermal plants in the interconnected system (13.1% decrease in lignite production, 30.1% decrease in gas production), while hydroelectric production also decreased by 26%. On the counterpoint, production from RES increased by 6.1% in line with the increase in installed capacity, while imports also increased by 27.3%. Overall, renewables covered 43% of demand in the first half of the year (an all-time high) compared to 37.1% in the corresponding period in 2022. It is notable that including generation from large hydropower plants, total green energy production in the country met 49.7% of demand in the first half of 2023.
In the Renewable Energy Sector and specifically in the Wind Energy Sector, the installed capacity as of the end of June 2023 totalled 4,935 MW, representing an increase of 252 MW (+5.4%) compared to the end of 2022. Consequently, during the first half of 2023, there were more new wind turbines connected to the grid than during the whole of 2022. The acceleration of growth is due to the gradual completion of major wind investments through the efforts of companies, the scientific community and wind energy professionals operating in Greece. In terms of market shares, according to ELETAEN data, as of June 2023 in Greece, TERNA Energy held 18.9% of installed wind capacity, with the second and third producers holding 14.3% and 8.3% respectively.
According to the same source, at the end of the first half of 2023, more than 600 MW of new wind farms were under construction or had been contracted, the vast majority of which are expected to be connected to the grid within the next 12 months. A further 450 MW are in the process of being contracted or about to commence construction. To these must be added another 400 MW that have been tendered, submitted performance guarantees but do not belong to any of the above categories. Thus, total wind capacity is expected to approach 6.5 GW within the next three years.
Regarding photovoltaics, the latest data for the entire country (DAPEEP-March 2023) indicate that the installed capacity reached 5,490 MW, with an increase of 220 MW for the first quarter compared to the end of 2022, while according to the estimates of the DAPEEP, additions at least similar to 2022 (1,235 MW) are expected to be added in the entire year.
TERNA ENERGY Group, in the first half of the year, continued the implementation of its investment plan with the construction of mature projects and the reinforcement of its investment portfolio with the further maturation of projects from the existing portfolio and the addition of new projects in various stages. As part of this plan, the grid connection of the wind farm cluster at Kafirea with a total capacity of 327 MW has been initiated. By the end of June, 59% of the wind turbines (204.4 MW) had been installed and connected, with the project being fully operational as of the publication date of the Financial Statements.
Furthermore, for the long-duration Pumped Storage project in the area of Amphilochia (680 MW), which had already started at the end of last year, construction work continues and its completion is scheduled to take about three years.
Specifically:
a) In the energy sector the installed capacity settled as follows:
| TOTAL | GREECE | POLAND | BULGARIA | |
|---|---|---|---|---|
| WIND PARKS | 1.066,8 | 934,8 | 102 | 30 |
| HYDROELECTRIC | 17,8 | 17,8 | ||
| PHOTOVOLTAIC | 8,5 | 8,5 | ||
| BIOMASS | 2,6 | 2,6 | ||
| TOTAL | 1.095,7 | 963,7 | 102 | 30 |
*The table includes 167.4 MW of wind farms that are in testing operation in Greece
At the same time, several new projects of significant capacity in Greece and abroad (mainly photovoltaics) are ready for implementation. As a result of the above-mentioned, the total capacity of projects in operation, under construction and ready for construction exceeds 2,000 MW now, aiming to exceed 6,000 MW by the end of the decade.
TERNA ENERGY Group possesses the largest and most diversified portfolio of renewable energy projects in the country at various stages of maturity with a total capacity of more than 12 GW.
b) In the waste management sector, the Group operates the project Waste Management of Epirus Region, while during 2022 it started operating the Transitional Management Unit of Arcadia, the Waste Transloading Station of Argolida and the Waste Transloading Station of Corinthia as part of the Public-Private Partnership (PPP) project "Integrated Waste Management of the Peloponnese Region", which is implemented by the Group company PERIVALLONTIKI PELOPONNISOU M.A.E.
In the context of the same contract, the construction of the Transitional Management Units of Messinia and Laconia and further the construction of the Waste Management Units is in progress. This project is being implemented with the main objective of providing modern waste management services aiming to protect the environment, ensuring public health, and providing multiple benefits to local communities as development cells of the circular economy.
c) Construction segment refers mainly to the construction of new RES production units, the installation of waste management units and other facilities that the Group has undertaken based on PPP contracts publicprivate partnership agreements.
For the six-month period ended 30 June 2023 the consolidated sales of the Group from continuing operations reach the amount of € 145,6 million compared to € 155,9 mill. in 2022, decrease of 6,6%. Operating earnings before interest, taxes, depreciation, and amortization (EBITDA) from the Group's continuing operations amounted to € 74,3 million compared to € 80,4 million of the corresponding six-month period of the previous year, decreased by 7,7%, The decrease in both sales and operating earnings before interest, taxes, depreciation and amortization (EBITDA) was influenced by the decrease in the production of electricity from wind farms as a consequence of the extremely low wind power that was registered during the first half of 2023.
Semi-Annual Financial Report for the period from January 1st to June 30th, 2023 (Amounts in thousands of Euros unless mentioned otherwise)
Profit before taxes from continuing operations amounted to € 29,8 million, decreased by 32,4% compared to € 44,0 million in the six-month period of the previous year 2022. Net operating profit from continuing operations attributed to the shareholders of the parent company amounted to 22,2 million, decreased by 24,6% compared to six-month period of the previous year (2022: € 29,4 million).
The decrease in net operating profit from continuing operations attributed to the shareholders of the parent company by € 7,2 million is mainly due to the reduced wind power. Net profit from continuing and discontinued operations excluding the Share Distribution Plan's expense and results from financial instruments at fair value amounted to € 23,8 million, decreased by 50,8% compared to the six-month period of the previous year. Finally, earnings before interest, taxes, financial, investment results and depreciation (EBITDA) from continuing operations excluding the Share Distribution Plan's expense amounted to € 74,7 million, decreased by 25,0% compared to the six-month period of the previous year.
Regarding the results from continuing operations of the individual sectors:
The Group's financial position remains stable, as cash and cash equivalents amounted to € 393,2 million, while an amount of € 69.8 million relates to restricted cash deposits related to the borrowing obligations of the Group companies. Loan liabilities amounted to € 1.164,1 million forming the net debt position (borrowings less cash and cash equivalents less restricted deposits related to borrowings) as at 30/06/2023 to € 770,9 million compared with € 669,3 million of the previous year. It is noted that the Group's cash and cash equivalents include amounts of € 3,0 million, to be returned, that are related with grants due to cancellation of construction or expiry of the deadlines for decisions regarding certain Wind Farms. These
Semi-Annual Financial Report for the period from January 1st to June 30th, 2023 (Amounts in thousands of Euros unless mentioned otherwise)
amounts will be returned as soon as the relevant procedures of the competent departments of the Ministry of Development have been completed and as soon as they have been excluded from the total restricted cash for the above calculation.
For the six-month period ended at 30/06/2023, TERNA ENERGY Group's investments totaled € 125,6 million The Group's continued investment activity creates the conditions for the stabilisation of an increased revenue stream and profitability on a long-term basis.
During the first half of 2023 the following significant events occurred:
On 14/06/2023, the Annual General Meeting of the Shareholders of TERNA ENERGY S.A. convened, which approved the Management Board's proposal for the shareholders' distribution of earnings and reserves in the total amount of EUR 44.604.209,65, i.e., € 0,38 per share, according to article 162 par. 3 of Law 162 162, para. 4548/2018. This amount will be increased by the dividend corresponding to the treasury shares that the Company holds.
On 10 February 2023, the Company proceeded with the acquisition of the total shares of the company ANAX IKE, which was subsequently renamed into TERNA ENERGY SAPPON IKE. The company is developing a 246.35 MW photovoltaic power plant in the region of Rodopi Prefecture.
On 17 May 2023, the Group's parent company, TERNA ENERGY S.A. founded, in cooperation with the GRID TELECOM S.A. a company under the name of TERNA FIBER SPECIAL PURPOSE S.A. This company is a Company Vehicle for the implementation of the Partnership Agreement that will be signed between the Greek State through the Ministry of Digital Governance (hereinafter referred to as "the Contracting Authority"), the Company and the founders - original shareholders of the Company as third party contractors, for the execution of the project "Ultra Ultra High Broadband Infrastructure - ULTRA FAST BROADBAND through PPP" for Geographical Zones 2, 4, 5 and 6, as indicated in the Call for Expression of Interest and the Call for Tenders Document.
Within the framework of the Share Distribution Plan, the Management of "TERNA ENERGY S.A." informed the Investors that for the implementation of the Share Distribution Plan approved by the decision of the Extraordinary General Meeting of the Company's shareholders on December 16, 2020, and following their contribution to the achievement of the financial objectives, the implementation of new projects and the increase of the Company's profitability, it has distributed to twenty-six (26) Directors a total of 2. 250,000 New Shares, which resulted from increases in its share capital with capitalization of share premium reserves and represent 1.9% of the paid-up share capital. The shares were distributed through an off-market transaction on 22/6/2023.
Semi-Annual Financial Report for the period from January 1st to June 30th, 2023 (Amounts in thousands of Euros unless mentioned otherwise)
It is noted that given that the New Shares are of the same class as the Company's shares already traded on the Main Market of the Athens Stock Exchange and represent, over a period of twelve months, approximately 1.9% of the Company's already listed shares, i.e. less than 20% of the number of shares of the same class already listed for trading on the Stock Exchange. A. without any other listing beyond that in the last twelve months, there is no obligation to publish a prospectus for the listing of the New Shares for trading on the Stock Exchange, in application of the exception in paragraph (a) of subparagraph (a). 5 of Article 1 of Regulation (EU) 2017/1129. Accordingly, the Company's share capital currently amounts to €35,431,527.00 divided into 118,105,090 common voting registered shares with a nominal value of €0.30 each.
From 01/07/2023 and until the preparation date of the present report, the following important events occurred:
• Completion of the installation of all the wind turbines of the Wind Farm in the area of Kafireas
The installation of all the wind turbines of the Group's Wind Farm Complex in the area of Karystos & Kafirea with a total capacity of 327 MW has been completed. This project is the largest project of Terna Energy Group in the field of renewable energy and Wind Energy in particular.
• Start of operation of the Transitional Waste Management Station of the 2nd DE (Messinia) of the Peloponnese Region.
On 30/06/2023 the Independent Auditor issued the Acceptance Certificate of the Transitional Waste Management Station 2nd DE (Messinia) following the successful completion of the trial period of the abovementioned Station, whereby on the above mentioned date the Planned Date of Availability of the Transitional Waste Management Services of the Transitional Waste Management Station 2nd DE (Messinia) was reached. The successful completion of the trial period and the issuance of the aforementioned Acceptance Certificate marks the start, as of 1 July 2023 , of the Transitional Management Services Period of the Transitional Waste Management Station 2nd DE (Messinia) for the acceptance and treatment of municipal solid waste in accordance with the terms of the Partnership Agreement.
The performance of the first half of the current year has been negatively affected by the weak wind conditions recorded in the country and in the Northern Hemisphere generally, compared to the particularly strong conditions recorded in the first half of last year. This fact is consistent with the stochasticity that characterises wind farm production and is reflected in any forecasting model, but does not affect the longterm performance of the projects, which are estimated to have a lifespan of 25 years.
Regarding the immediate future periods, Terna Energy Group expects a significant increase of revenues and operating profitability subsequent to the commissioning of the Kafireas wind farm before the end of the third quarter of the current year. The commissioning marks an increase in installed capacity of approximately 35% and is expected to have a proportionate impact on operating profitability (on an annualised basis). It is also worth mentioning that, the Peloponnese waste management project that is now fully in commercial
Semi-Annual Financial Report for the period from January 1st to June 30th, 2023 (Amounts in thousands of Euros unless mentioned otherwise)
operation, together with the other concessions/ PPP projects (waste management in Epirus, Electronic Ticketing) further enhance the Group's long-term performance.
Regarding the mid-term perspective, the Group continues with its investment plan, having now under construction the large pumped storage project in Amfilochia with a total investment of EUR 650 million. The construction of new parks (mainly photovoltaic) in Greece is scheduled to be started gradually from the end of this year and within 2024, while projects abroad continue to be considered on a case-by-case basis. At the same time, the Group is advancing the procedures for the maturation of projects of various technologies (e.g. hydroelectric, storage, hybrid, etc.) in Greece that are expected to be able to progressively starting construction from next year. Finally, emphasis is also being given to new concessions/ PPP projects (waste management, digital transformation, etc.) that can further enhance the Group's revenues in the long term while also offering synergies.
Given the above and despite the continuous challenges and the ever-volatile conditions in the energy markets in Greece and abroad, as the recent past has shown, Terna Energy Group is going to continue playing a leading part. The Group's long-term target to approach a portfolio of projects of more than 6.0 GW in operation before the end of the current decade should be mentioned.
The Group's activities expose it to various financial risks such as market risk (including foreign exchange risk, interest rate risk and price volatility risk), credit risk and liquidity risk.
The Group, in order to deal with the financial risks and to limit their negative impact on its financial results, monitors the fluctuations of the variables that affect cost and sales and uses the appropriate products, as the case may be.
The main risks and uncertainties related to the Group's operations are as follows:
The Group examines its receivables on an on-going basis and incorporates the arising data in its credit control. The total of the energy segment receivables relates to the broader domestic (including ΕΝΕΧ, DAPEEP and DEDDIE) and foreign Public Sector, while the same is the case regarding the main part of the construction segment receivables.
Given the nature of its operations, the Group traditionally, is not exposed to significant credit risk from trade receivables. In the past, there have been delays in collections from DAPEEP, which have been significantly reduced with the implementation of Law 4254 /14 as well as the extraordinary levy imposed for the fiscal year 2020 to address the side effects of the coronavirus pandemic, on electricity producers from Renewable Energy Sources (RES) power plants, which have been brought into normal or trial operation by 31 December 2015 (Government Gazette 245/09.12.2020). In other transactions with individuals, the Group operates with a view to limiting credit risk and securing its receivables.
The credit risk in respect of cash and cash equivalent and other receivables is low, since the parties to transaction are banks of high-quality capital structure, the State or the entities of the broader Public Sector or strong business groups.
Lastly, the Group Management estimates that all the financial assets, for which the necessary impairments have been performed, are of high credit quality.
Semi-Annual Financial Report for the period from January 1st to June 30th, 2023 (Amounts in thousands of Euros unless mentioned otherwise)
Besides Greece, the Group operates in Eastern Europe and, therefore, it may be exposed to foreign exchange risk, potentially arising from the exchange rate of Euro against other currencies. This type of risk may arise only from trade transactions in foreign currency, from financial investments in foreign currency, as well as from net investments in foreign entities. To limit this risk, the Group uses the cash surpluses generated in local currency. During the operational phase, all related costs and revenues are made in local currency, thus excluding any possibility of generating currency exchange differences.
To mitigate this risk, the Group's financial management department systematically monitors exchange rate fluctuations and ensures that they do not adversely affect its cash flow.
Regarding the Company's transactions with foreign entities, such transactions primarily take place with European Groups, where Euro is the settlement currency and, therefore, such transactions are not exposed to foreign exchange risk.
The Group's policy is to minimize its exposure to cash flow interest rate risk with regards to its long-term financing.
In this context, long-term loans received by the Group either bear a fixed interest rate or are hedged for almost the entire duration. Thus, 16,5%% of the Group's long-term borrowing refers to fixed interest rate loans, 61,4% refers to floating-rate loans that have been hedged through derivatives with which future fixed rate payments are exchanged against floating rate collections, while 22,2% in floating rate loans on a caseby-case basis euribor or wibor.
The Group's total short-term bank loans are in Euro under floating interest rates linked to euribor. Short‐ term loans are primarily received as bridge financing during the phase of implementation and construction of the Group's investments (Wind parks). These loans are expected to be repaid within one year, while new short‐term loans are expected to be received to finance the construction of new wind parks Therefore, the Group is exposed to interest rate risk arising from short-term debt and the part of long‐term debt that is under floating interest rates.
The Group is not exposed to other interest rate risks.
The Group's financial assets are not exposed to market risk.
The Group's liquidity is considered satisfactory, as apart from the effective cash and cash equivalents, currently operating wind farms generate satisfactory cash flows on an on-going basis. In the year 2023 net cash flows from continuing operating activities amounted to € 55 million versus € 57 million in 2022. The Group manages its liquidity needs by applying a cautious cash flow planning, by carefully monitoring the balance of long‐term financial liabilities as well as by systematically managing the payments which take place daily. The liquidity needs are monitored at different time zones, on a daily and weekly basis, as well as based on a moving 30‐day period. The liquidity needs for the next 6 months, and the next year are defined monthly. The Company maintains cash and cash equivalents in banks, in order to cover its liquidity needs for periods up to 30 days. The capital for mid‐term liquidity needs is released from the Company's term deposits.
Semi-Annual Financial Report for the period from January 1st to June 30th, 2023 (Amounts in thousands of Euros unless mentioned otherwise)
The Group remains exposed to short‐term fluctuations of wind and hydrologic data, a fact, which does not affect the long‐term efficiency of its projects, as prior to the implementation of the investments extensive studies take place with regards to the long‐term behavior of such factors.
The construction sector of TERNA ENERGY is subject to significant fluctuations, both with regards to turnover and with regards to the profitability of each construction project, because the construction activity, particularly of specialized companies such as TERNA ENERGY, entails increased volatility that is mainly related to the ongoing renewal of the backlog of construction agreements towards third parties, which are mainly Public entities.
The military conflict in the region of Ukraine continues and the chances for resolution remain slim. TERNA ENERGY Group continues to closely monitor the situation, which has not and is not expected to have a direct impact on its figures and performance. Given that the majority of the Wind Parks have a fixed sales price, the significant costs are depreciation of equipment and borrowing costs refer to fixed rate loans, the impact is still insignificant, and this is not expected to change in the foreseeable future. In the operating segment of "Concessions" no significant impact is expected due to the structure of the contracts governing these functions.
Finally, due to the dynamics of these events, new risks may arise. Considering the current uncertainty in the broader economic climate, the Group's management is trying to assess in a prompt manner any indirect effects on the Group.
Regarding its activity in the energy sector, the Group remains exposed to the short-term fluctuations of wind and hydrological data, without affecting the long-term profitability of its projects, if the implementation of its investments is preceded by extensive studies involving long-term studies of the above factors. From now on, calculation models should incorporate new factors allowing for the occurrence of potential events of force majeure, such as the current epidemic, in order to examine in greater depth, the viability of any projected investment.
In the context of applying the Guidelines "Alternative Performance Measures" of the European Securities and Markets Authority (ESMA/2015/1415el) which are applied from 3rd of July 2016 in the Alternative Performance Measures Indicators (APMI)
The Group utilizes Alternative Performance Measurement Indicators ("APMI") in its financial, operational and strategic planning decisions, as well as in evaluating and publishing its performance. These APMI serves to better understanding the Group's financial and operating results as well as its financial position when describing the Company's performance, the following indicators are used: Alternative indicators should always be considered in conjunction with the financial results prepared in accordance with IFRSs and in no case should they replace them.
The following indicators are used when describing the Group's performance by sector:
EBIΤ (Earnings before Interest & Taxes): It is a ratio by which the Company's Management assesses its operating performance. It is defined as: Turnover, - Cost of sales, - Administrative & distribution expenses, - Research & development expenses, +/- Other Income / (Expenses) and other Gains / (Losses) included in ΕΒΙΤ. The other Income / (Expenses) determinants are defined as Other Income (Expenses), not including foreign exchange valuation differences, Impairment / (Recovery of impairment) of assets as presented in Note 21.
EBITDA (Earnings before Interest Taxes Depreciation & Amortization): The ratio is calculated as Earnings before Interest & Tax (EBIT) adding the total depreciation of tangible and intangible assets and deducting grants depreciations. The greater the indicator is, the more efficient the operation of the Company becomes. The EBITDA is defined as EBIT adding assets depreciation, less grants depreciation.
"Net debt / (Surplus)" is a ratio by which the Company's Management assesses each time the respective cash position. The ratio is defined as total long-term loan liabilities, short-term loan liabilities, long-term liabilities carried forward, less cash and cash equivalents (excluding the amounts of grants to be repaid) less restricted deposits related to bank debt.
"Gross Profit Margin" is a ratio by which the Company's Management assesses the return level and is defined as Gross Profit to Turnover.
"Loan Liabilities to Total Capital in Use" is an indicator by which management assesses the Group's financial leverage. Borrowings are defined as the total of Short-term borrowings, Long-term borrowings and Longterm borrowings payable in the following financial year. Total Capital Employed is defined as total Equity, Borrowings, Lease Obligations, Lease Obligations, Grants less the amount of cash and cash equivalents that are not subject to any usage restriction or commitment other than commitments related to borrowings.
The following tables configures the ratios "EBIT", "EBITDA", "Net debt / (Surplus)" , "Gross Profit Margin" and "Loan Liabilities to Total Capital Employed":
| Operating segments | Construction | Electricity from RES | Waste management |
E-Ticket | Intersegment consolidation eliminations |
Consolidated total |
|---|---|---|---|---|---|---|
| 30th June 2023 | ||||||
| Revenue | ||||||
| Sales of products and services | 26.784 | 105.424 | 6.549 | 6.883 | − | 145.640 |
| Intersegment revenue | 27.376 | − | − | − | (27.376) | − |
| Total revenue from continuing operations | 54.160 | 105.424 | 6.549 | 6.883 | (27.376) | 145.640 |
| Cost of sales | (49.471) | (47.904) | (4.834) | (5.709) | 25.387 | (82.531) |
| Gross profit from continuing operations | 4.689 | 57.520 | 1.715 | 1.174 | (1.989) | 63.109 |
| Administrative and distribution expenses | (90) | (16.121) | (367) | (288) | 15 | (16.851) |
| Research and development expenses | (415) | (3.304) | (1) | − | − | (3.720) |
| Other income/(expenses) and other gain/(losses)-ΕΒΙΤ determinants | (1.394) | 8.427 | 1.523 | 77 | − | 8.633 |
| Operating results (EBIT) from continuing operations | 2.790 | 46.522 | 2.870 | 963 | (1.974) | 51.171 |
| Depreciation | (249) | (26.556) | (89) | (10) | 1.148 | (25.756) |
| Grants' amortization | − | 2.676 | − | − | − | 2.676 |
| EBITDA from continuing operations | 3.039 | 70.402 | 2.959 | 973 | (3.122) | 74.251 |
| Long‐term loans | − | 937.539 | 56.441 | 10.181 | − | 1.004.161 |
| Short‐term loans | − | 216 | − | − | − | 216 |
| Long‐term liabilities carried forward | − | 136.608 | 19.585 | 3.549 | − | 159.742 |
| Cash and cash equivalents | − | (296.168) | (21.124) | (6.065) | − | (323.357) |
| Restricted cash | − | (68.124) | (1.320) | (399) | − | (69.843) |
| Net debt/(surplus) | − | 710.071 | 53.582 | 7.266 | 770.919 |
(Amounts in thousands of Euros unless mentioned otherwise)
| Operating segments | Construction | Electricity from RES | Waste management |
E-Ticket | Intersegment consolidation eliminations |
Consolidated total |
|---|---|---|---|---|---|---|
| 30th June 2022* | ||||||
| Revenue | ||||||
| Sales of products and services | 24.268 | 122.359 | 3.080 | 6.143 | − | 155.850 |
| Intersegment revenue | 68.157 | − | − | − | (68.157) | − |
| Total revenue from continuing operations | 92.425 | 122.359 | 3.080 | 6.143 | (68.157) | 155.850 |
| Cost of sales | (83.511) | (47.667) | (2.865) | (5.193) | 64.014 | (75.222) |
| Gross profit from continuing operations | 8.914 | 74.692 | 215 | 950 | (4.143) | 80.628 |
| Administrative and distribution expenses | (296) | (25.693) | (229) | (231) | 6 | (26.443) |
| Research and development expenses | (113) | (3.519) | − | − | − | (3.632) |
| Other income/(expenses) and other gain/(losses)-ΕΒΙΤ determinants | 523 | 8.013 | 13 | − | (10) | 8.539 |
| Operating results (EBIT) from continuing operations | 9.028 | 53.493 | (1) | 719 | (4.147) | 59.092 |
| Depreciation | (96) | (24.401) | (70) | (7) | 554 | (24.020) |
| Grants' amortisation | − | 2.685 | − | − | − | 2.685 |
| EBITDA from continuing operations | 9.124 | 75.209 | 69 | 726 | (4.701) | 80.427 |
| Long‐term loans | − | 865.793 | 73.633 | 11.900 | − | 951.326 |
| Short‐term loans | − | 60.632 | − | − | − | 60.632 |
| Long‐term liabilities carried forward | − | 104.381 | 3.184 | 3.536 | − | 111.101 |
| Cash and cash equivalents | − | (359.204) | (21.765) | (7.667) | − | (388.636) |
| Restricted cash | − | (63.379) | (1.320) | (399) | − | (65.098) |
| Net debt/(surplus) | − | 608.223 | 53.732 | 7.370 | − | 669.325 |
*The comparative figures of the Group's and the Company's results for the financial year 2022 have been revised in order to include only continuing operations, as a consequence of the recognition of the discontinued operations of the Company's segment (see. Notes 7.1 and 7.2 of the Annual Financial Statements at 31 December 2022), in accordance with the requirements of IFRS 5 "Non-current assets held for sale and discontinued operations".
(Amounts in thousands of Euros unless mentioned otherwise)
| Operating segments | Construction | Electricity from RES | Waste management |
E-Ticket | Intersegment consolidation eliminations |
Consolidated total |
|---|---|---|---|---|---|---|
| 30th June 2023 | ||||||
| Revenue from continuing operations | 54.160 | 105.424 | 6.549 | 6.883 | (27.376) | 145.640 |
| Cost of sales from continuing operations | (49.471) | (47.904) | (4.834) | (5.709) | 25.387 | (82.531) |
| Gross profit from continuing operations | 4.689 | 57.520 | 1.715 | 1.174 | (1.989) | 63.109 |
| Gross profit margin from continuing operations | 8,66% | 54,56% | 26,19% | 17,06% | 7,27% | 43,33% |
| Operating segments | Construction | Electricity from RES | Waste management |
E-Ticket | Intersegment consolidation eliminations |
Consolidated total |
|---|---|---|---|---|---|---|
| 30th June 2022* | ||||||
| Revenue from continuing operations | 92.425 | 122.359 | 3.080 | 6.143 | (68.157) | 155.850 |
| Cost of sales from continuing operations | (83.511) | (47.667) | (2.865) | (5.193) | 64.014 | (75.222) |
| Gross profit from continuing operations | 8.914 | 74.692 | 215 | 950 | (4.143) | 80.628 |
| Gross profit margin from continuing operations | 9,64% | 61,04% | 6,98% | 15,46% | 6,08% | 51,73% |
*The comparative figures of the Group's and the Company's results for the financial year 2022 have been revised in order to include only continuing operations, as a consequence of the recognition of the discontinued operations of the Company's segment (see. Notes 7.1 and 7.2 of the Annual Financial Statements at 31 December 2022), in accordance with the requirements of IFRS 5 "Non-current assets held for sale and discontinued operations".
The ratio "Loan Liabilities to Total Capital Employed" at the end of 2023 and 2022 is as follows:
| Amounts in thousand € | 30/06/2023 | 31/12/2022 |
|---|---|---|
| Short‐term loans | 216 | 60.632 |
| Long‐term loans | 1.004.161 | 951.326 |
| Long‐term liabilities carried forward | 159.742 | 111.101 |
| Loan liabilities | 1.164.119 | 1.123.059 |
| Total equity | 471.266 | 491.175 |
| Loan liabilities | 1.164.119 | 1.123.059 |
| Lease liabilities (Long-term and Short-term portion) | 29.236 | 27.026 |
| Grants | 164.643 | 167.146 |
| Subtotal | 1.829.264 | 1.808.406 |
| Less: | ||
| Cash and cash equivalents | 326.356 | 391.896 |
| Restricted cash related with loans (Note 12) | 69.843 | 65.098 |
| Grants to be rebated (Note 17) | (3.000) | (3.260) |
| Subtotal | 393.199 | 453.734 |
| Total employed capital | 1.436.065 | 1.354.672 |
| Loan Liabilities / Total employed capital | 81% | 83% |
The Company's transactions with related parties pursuant to the provisions of IAS 24 have been conducted under normal market conditions. In the year 2023 the amounts of sales and purchases as well as balances of the Company's and Group's assets and liabilities as of 30/06/2023 arising from transactions with related parties are presented in Note 24 of the financial statements.
The total amounts paid to the members of the Board of the Group accounted for 2.362.000 Euros (for the Parent Company: 2.064.000 Euros), 1.503.000 Euros (for the Parent Company: 1.370.000 Euros) related with Board Rewards, while amount of 859.000 Euros (for the Parent Company: 694.000 Euros) are related with remuneration for professional services.
The Company during the period 01/01/2023 – 31/12/2023 did not purchase own shares. Hence, on 31/12/2021 the Company owned 653.046 Treasury Shares. These shares represented a percentage 0,55% of the paid-up share capital of the Company.
In the context of its business activity, the Company creates Branches, Construction sites and other similar facilities. On 30th of June 2023 the Company had 68 facilities.
Athens, 21/09/2023 On behalf of the Board of Directors,
Georgios Peristeris Chairman of the Board of Directors
(This review report has been translated from the Greek Original Version)
We have reviewed the accompanying condensed separate and consolidated statement of financial position of TERNA ENERGY SOCIETE ANONYME COMMERCIAL TECHNICAL COMPANY as of 30 June 2023 and the related separate and consolidated condensed income statement and statement of comprehensive income, statement of changes in equity and cash flows for the six-month period then ended, and the selected explanatory notes that comprise the interim condensed financial information, which forms an integral part of the sixmonth financial report under Law 3556/2007.
Management is responsible for the preparation and fair presentation of this interim condensed financial information in accordance with the International Financial Reporting Standards as adopted by the European Union and apply for Interim Financial Reporting (International Accounting Standard "IAS 34"). Our responsibility is to express a conclusion on these interim condensed financial statements based on our review.
We conducted our review in accordance with International Standard on Review Engagements 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Auditing Standards as incorporated into the Greek Law and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim financial information is not prepared, in all material respects, in accordance with IAS 34.
Based on our review, we did not identify any material misstatement or error in the representations of the members of the Board of Directors and the information included in the six-month Board of Directors Management Report, as required under article 5 and 5a of Law 3556/2007, in respect of condensed separate and consolidated financial information.
Athens, 21 September 2023 The Certified Auditor Accountant George P. Panagopoulos SOEL Reg. No.36471
According to the International Financial Reporting Standards (IFRS) as adopted by the European Union, and,
The attached Condensed Interim Separate and Consolidated Financial Statements were approved by the Board of Directors of TERNA ENERGY S.A. as at 21/09/2023 and have been published on the website www.terna‐ energy.com as well as on the Athens Exchange's website.
| GROUP | COMPANY | ||||
|---|---|---|---|---|---|
| Note | 30/06/2023 | 31/12/2022 | 30/06/2023 | 31/12/2022 | |
| ASSETS | |||||
| Non-current assets | |||||
| Intangible assets | 6 | 64.666 | 60.473 | 2.708 | 2.872 |
| Tangible assets | 8 | 1.272.113 | 1.169.349 | 62.364 | 63.336 |
| Right-of-use assets | 7 | 29.324 | 27.057 | 21.283 | 19.570 |
| Investement in subsidiaries | − | − | 366.183 | 390.829 | |
| Investment in joint ventures | 4.214 | 4.164 | 4.475 | 4.425 | |
| Investment in associates | 33 | 34 | − | − | |
| Other long‐term receivables | 9 | 5.037 | 6.461 | 140.558 | 142.783 |
| Receivables from derivatives | 23.758 | 26.544 | 771 | 935 | |
| Financial Assets – Concessions | 10 | 77.179 | 70.873 | − | − |
| Investments in equity interests | 3.752 | 3.499 | 3.752 | 3.499 | |
| Deferred tax assets | 20 | 20.620 | 18.350 | 6.747 | 9.411 |
| Total non‐current assets | 1.500.696 | 1.386.804 | 608.841 | 637.660 | |
| Current assets | |||||
| Inventories | 9.545 | 9.902 | 6.285 | 7.067 | |
| Trade receivables | 11 | 62.381 | 64.736 | 99.000 | 150.868 |
| Receivables from contracts with customers | 11 | 27.161 | 30.551 | 14.095 | 13.050 |
| Prepayments and other receivables | 11 | 134.201 | 131.745 | 61.668 | 36.537 |
| Income tax receivables | 6.865 | 7.487 | 5.016 | 5.806 | |
| Other short-term investments | 4.220 | 4.322 | − | − | |
| Receivables from derivatives | 15 | 6.272 | 7.973 | 489 | 176 |
| Cash and cash equivalents | 12 | 326.356 | 391.896 | 99.105 | 110.917 |
| Total current assets | 577.001 | 648.612 | 285.658 | 324.421 | |
| TOTAL ASSETS | 2.077.697 | 2.035.416 | 894.499 | 962.081 | |
| EQUITY AND LIABILITIES | |||||
| Share capital | 19 | 35.432 | 34.757 | 35.432 | 34.757 |
| Share premium | 19 | 209.195 | 209.870 | 209.195 | 209.870 |
| Reserves | 19 | 63.848 | 107.180 | 5.090 | 48.012 |
| Retained earnings | 152.867 | 129.287 | 73.379 | 43.718 | |
| Total equity attributable to the shareholders of the parent |
461.342 | 481.094 | 323.096 | 336.357 | |
| Non‐controlling interest | 9.925 | 10.082 | − | − | |
| Total equity | 471.267 | 491.176 | 323.096 | 336.357 |
| GROUP | ENTITY | ||||
|---|---|---|---|---|---|
| Note | 30/06/2023 | 31/12/2022 | 30/06/2023 | 31/12/2022 | |
| Long‐term liabilities | |||||
| Long‐term loans | 13 | 1.004.161 | 951.326 | 364.847 | 388.408 |
| Lease liabilities | 14 | 27.218 | 25.372 | 19.609 | 18.185 |
| Liabilities from derivatives | 15 | 8.328 | 14.596 | 1.250 | 7.845 |
| Provision for staff indemnities | 16 | 269 | 245 | 243 | 218 |
| Other provisions | 16 | 21.918 | 19.416 | 4.858 | 4.741 |
| Grants | 17 | 164.643 | 167.146 | 10.627 | 11.257 |
| Liabilities from contracts with customers | 2.706 | 2.766 | 2.706 | 2.766 | |
| Deferred tax liabilities | 20 | 51.476 | 48.080 | − | − |
| Other long‐term liabilities | − | 7.496 | − | 7.388 | |
| Total long‐term liabilities | 1.280.719 | 1.236.443 | 404.140 | 440.808 | |
| Short‐term liabilities | |||||
| Suppliers | 18 | 57.200 | 75.084 | 43.272 | 63.068 |
| Short‐term loans | 13 | 216 | 60.632 | 216 | 60.632 |
| Long‐term liabilities carried forward | 13 | 159.742 | 111.101 | 35.307 | 14.086 |
| Lease liabilities | 14 | 2.018 | 1.654 | 1.413 | 1.369 |
| Liabilities from derivatives | 15 | 7.046 | 5.768 | 4.991 | 5.670 |
| Liabilities from contracts with customers | 3.852 | 8.611 | 9.147 | 17.494 | |
| Accrued and other short‐term liabilities | 18 | 82.779 | 33.458 | 72.714 | 22.597 |
| Income tax payable | 20 | 12.858 | 11.489 | 203 | − |
| Total short‐term liabilities | 325.711 | 307.797 | 167.263 | 184.916 | |
| Total liabilities | 1.606.430 | 1.544.240 | 571.403 | 625.724 | |
| TOTAL LIABILITIES AND EQUITY | 2.077.697 | 2.035.416 | 894.499 | 962.081 |
Note:
The accompanying notes form an integral part of these Annual Separate and Consolidated Financial Statements.
| GROUP | COMPANY | |||||
|---|---|---|---|---|---|---|
| Note | 01/01 - 30/06/2023 |
01/01 - 30/06/2022* |
01/01 - 30/06/2023 |
01/01 - 30/06/2022* |
||
| Continuing operations | ||||||
| Revenue | 145.640 | 155.850 | 73.732 | 106.684 | ||
| Cost of sales | (82.531) | (75.222) | (63.669) | (96.514) | ||
| Gross profit | 63.109 | 80.628 | 10.063 | 10.170 | ||
| Administrative and distribution expenses | (16.852) | (26.443) | (8.790) | (20.191) | ||
| Research and development expenses | (3.719) | (3.632) | (3.089) | (3.546) | ||
| Other income/(expenses) | 21 | 7.466 | 9.466 | 3.915 | 1.935 | |
| Operating results | 50.004 | 60.019 | 2.099 | (11.632) | ||
| Financial income | 22 | 4.444 | 3.740 | 2.792 | 2.981 | |
| Financial expenses | 22 | (24.426) | (19.944) | (10.415) | (9.482) | |
| (Losses)/gains from financial instruments measured at fair value |
(270) | 210 | (270) | 210 | ||
| Revenue from participating interest and other investments |
22 | − | − | 33.763 | 41.675 | |
| Losses from disposals and valuation of participations and other investments |
4 | − | − | (1.211) | − | |
| profit before tax from continuing operations | 29.752 | 44.025 | 26.758 | 23.752 | ||
| Income tax expense | 20 | (6.706) | (13.348) | (1.285) | (427) | |
| Net profit for the year from continuing operations |
23.046 | 30.677 | 25.473 | 23.325 | ||
| Discontinued operations | ||||||
| Net profit for the year from discontinued operations |
7.2 | − | 4.664 | − | 3.208 | |
| Net profit for the year from continuing and discontinuing operations |
23.046 | 35.341 | 25.473 | 26.533 | ||
| Other comprehensive income Items subsequently reclassified in the Income |
||||||
| Statement Foreign exchange translation differences from incorporation of foreign operations |
||||||
| - Gains of the current year Cast flows hedges |
2.206 | 314 | − | − | ||
| -(Losses)/gains of the current year | 777 | 11.531 | 7.694 | (8.335) | ||
| Corresponding income tax | (166) | (2.651) | (1.689) | 1.834 | ||
| Total | 2.817 | 9.194 | 6.005 | (6.501) | ||
| Items not subsequently reclassified in the | ||||||
| Income Statement Gains/(losses) from valuation of participating interest at fair value |
51 | (79) | 51 | (79) | ||
| Actuarial losses from defined benefit plans | (7) | − | − | − | ||
| Corresponding income tax | (12) | 17 | (11) | 17 | ||
| Total | 32 | (62) | 40 | (62) | ||
| Other comprehensive (loss)/income for the year (after tax) |
2.849 | 9.132 | 6.045 | (6.563) | ||
| Total comprehensive income for the year | 25.895 | 44.473 | 31.518 | 19.970 |
| GROUP | |||||
|---|---|---|---|---|---|
| Note | 01/01 - 30/06/2023 |
01/01 - 30/06/2022* |
|||
| Net profit for the year attributed to: | |||||
| Shareholders of the parent from: | |||||
| - continuing operations | 22.180 | 29.416 | |||
| - discontinued operations | − | 4.235 | |||
| Total | 22.180 | 33.651 | |||
| Non‐controlling interests from: | |||||
| - continuing operations | 866 | 1.261 | |||
| - discontinued operations | − | 429 | |||
| Total | 866 | 1.690 | |||
| Net Earnings/(losses) after taxes from continuing and discontinued operations |
23.046 | 35.341 | |||
| Total comprehensive income for the year | |||||
| attributed to: Shareholders of the parent from: |
|||||
| - continuing operations | 25.028 | 38.548 | |||
| - discontinued operations | − | 4.235 | |||
| Total | 25.028 | 42.783 | |||
| Non‐controlling interests from: | |||||
| - continuing operations | 867 | 1.261 | |||
| - discontinued operations | − | 429 | |||
| Total | 867 | 1.690 | |||
| Total comprehensive income | 25.895 | 44.473 | |||
| Basic Earnings per share (in Euro) attributed to shareholders of the parent |
|||||
| - from continuing operations | 19 | 0,19039 | 0,25464 | ||
| - from discontinued operations | 19 | − | 0,03666 | ||
| - from continuing and discontinued operations | 19 | 0,19039 | 0,29130 |
*The comparative figures of the Group and the Company for the financial year 2022 have been restated in order to include only continuing operations, as a consequence of the recognition of the discontinued operations of the Company's segment (see. Notes 7.1 and 7.2 of the Annual Financial Statements at 31 December 2022), in accordance with the requirements of IFRS 5 "Non-current assets held for sale and discontinued operations".
| GROUP | COMPANY | |||||
|---|---|---|---|---|---|---|
| Note | 01/01 - 30/06/2023 |
01/01 - 30/06/2022* |
01/01 - 30/06/2023 |
01/01 - 30/06/2022* |
||
| Cash flows from operating activities Profit before tax from continuing operations Adjustments for reconciliation of net flows from operating activities |
29.752 | 44.025 | 26.758 | 23.752 | ||
| Amortisation/depreciation of intangible, tangible and right-of-use assets |
6, 7, 8 | 25.757 | 24.020 | 4.068 | 3.783 | |
| Grants' amortisation | 17 | (2.676) | (2.685) | (629) | (629) | |
| Impairment | 2.044 | 1 | 1.231 | − | ||
| Provisions | 16 | (1.747) | (140) | (1.749) | (144) | |
| Interest and related income | 22 | (4.443) | (3.740) | (2.792) | (2.981) | |
| Interest and other financial expenses | 22 | 24.426 | 19.944 | 10.415 | 9.482 | |
| Results from intangible and tangible assets, investment property and right-of-use assets |
− | (42) | 1 | − | ||
| Revenue from participating interest and other investments |
− | − | (33.763) | (41.675) | ||
| Results from derivatives | 15 | 270 | (210) | 270 | (210) | |
| Foreign currency exchange differences | 21 | (854) | (1.057) | − | − | |
| Results from Share based payments programms | 19 | 448 | 13.132 | 448 | 13.132 | |
| Operating profit before changes in working capital | 72.977 | 93.248 | 4.258 | 4.510 | ||
| (Increase)/Decrease in: | ||||||
| Inventories | 356 | (2.328) | 781 | (1.990) | ||
| Trade receivables and receivables from contracts with customers |
(11.076) | 4.917 | 23.949 | 14.640 | ||
| Prepayments and other short term receivables | (7.825) | (8.091) | (24.748) | 2.319 | ||
| Increase/(Decrease)\ in: | ||||||
| Suppliers and liabilities from contracts with customers | 11.437 | (15.723) | (14.382) | (16.976) | ||
| Accrued and other short term liabilities | (3.833) | 8.773 | (1.924) | (463) | ||
| Other long term receivables and liabilities | (2.434) | (16.430) | (59) | 2.161 | ||
| Income tax paid | (4.549) | (7.417) | 50 | (1.706) | ||
| Net cash (outflows)/inflows from operating activities continuing operations |
55.053 | 56.949 | (12.075) | 2.495 | ||
| Cash flows from operating activities - discontinued | 2.523 | 12.595 | 2.523 | (5.387) | ||
| Net cash (outflows)/inflows from operating activities | 57.576 | 69.544 | (9.552) | (2.892) |
| GROUP | ENTITY | ||||
|---|---|---|---|---|---|
| Note | 01/01 - 30/06/2023 |
01/01 - 30/06/2022* |
01/01 - 30/06/2023 |
01/01 - 30/06/2022* |
|
| Cash flows from investing activities | |||||
| Acquisition of tangible and intangible fixed assets | 6, 8 | (132.724) | (138.859) | (2.613) | (3.392) |
| Disposal of tangible and intangible fixed assets | 6, 8 | 27 | 989 | 10.016 | − |
| Return of grants | 17 | (260) | − | − | − |
| Interest and related income collected | 487 | 294 | 962 | 318 | |
| Payments for acquisition of companies | 7.4 | (1.429) | (723) | (1.369) | (2.177) |
| Disposal of interest in subsidiaries | 7.1, 7.3 | 5.498 | − | 5.498 | − |
| Payments for acquisition or increase in participating interest in associates and joint ventures |
(50) | − | (50) | − | |
| Payments for acquisition of shares, bonds and other securities |
(179) | (3.699) | (201) | (329) | |
| Dividends received | − | − | 28.639 | 40.674 | |
| Issued loans | (156) | − | (1.206) | − | |
| Proceeds from issued loans | − | − | 2.265 | − | |
| Net cash (outflows)/inflows from investing activities continuing operations |
(128.786) | (141.998) | 41.941 | 35.094 | |
| Cash flows from investing activities - discontinued | 36 | (2) | 36 | − | |
| Net cash (outflows)/inflows from investing activities | (128.750) | (142.000) | 41.977 | 35.094 | |
| Cash flows from financing activities | |||||
| Acquisition of treasury shares | 19 | − | (2.077) | − | (2.077) |
| Proceeds from changes in participating interest | − | − | 29.292 | 172 | |
| Proceeds from long term loans | 13 | 171.098 | 133.100 | 6.800 | 10.164 |
| Payments for long term loans | 13 | (74.367) | (42.689) | (13.205) | (14.803) |
| Lease liability payments | 14 | (1.652) | (1.340) | (1.230) | (888) |
| Payments of short term loans | 13 | (60.000) | − | (60.000) | − |
| Dividends paid | 19 | (250) | − | − | − |
| Interest paid | (29.733) | (18.483) | (5.891) | (5.561) | |
| Net cash (outflows)/inflows from financing activities continuing operations |
5.096 | 68.511 | (44.234) | (12.993) | |
| Cash flows from financting activities - discontinued | (3) | (83) | (3) | (6) | |
| Net cash (outflows)/inflows from financing activities | 5.093 | 68.428 | (44.237) | (12.999) | |
| Net (decrease)/increase in cash and cash equivalents from continuing operations |
(68.637) | (16.538) | (14.368) | 24.596 | |
| Net (decrease)/increase in cash and cash equivalents from discontinued operations |
2.556 | 12.510 | 2.556 | (5.393) | |
| Net (decrease)/increase in cash and cash equivalents | (66.081) | (4.028) | (11.812) | 19.203 | |
| Effect of exchange rate changes on cash & cash equivalents |
541 | 1.084 | − | − | |
| Opening cash and cash equivalents | 12 | 391.896 | 397.409 | 110.917 | 100.536 |
| Closing cash and cash equivalents | 12 | 326.356 | 394.465 | 99.105 | 119.739 |
Note:
*The comparative figures of the Group and the Company for the financial year 2022 have been restated in order to include only continuing operations, as a consequence of the recognition of the discontinued operations of the Company's segment (see. Notes 7.1 and 7.2 of the Annual Financial Statements at 31 December 2022), in accordance with the requirements of IFRS 5 "Non-current assets held for sale and discontinued operations".
Semi-Annual Financial Report for the period from January 1st to June 30th 2023
(Amounts in Euro thousand unless stated otherwise)
| Note | Share capital |
Share premium |
Reserves | Retained Earnings |
Subtota l |
Non controlling interests |
Total | |
|---|---|---|---|---|---|---|---|---|
| 1 January 2022 | 34.757 | 209.870 | 63.071 | 113.191 | 420.889 | 10.754 | 431.643 | |
| Net profit for the year from continuing operations | − | − | − | 33.651 | 33.651 | 1.690 | 35.341 | |
| Other comprehensive income | − | |||||||
| Foreign exchange translation differences from incorporation of foreign | − | − | 314 | − | 314 | − | 314 | |
| operations Gains/(losses) from valuation of participating interest at fair value (not reclassified in the Statement of Comprehensive Income) |
− | − | (62) | − | (62) | − | (62) | |
| Cast flows hedges | 15 | − | − | 8.880 | − | 8.880 | − | 8.880 |
| Other comprehensive income for the year (after tax) | − | − | 9.132 | − | 9.132 | − | 9.132 | |
| Total comprehensive income for the year | − | − | 9.132 | 33.651 | 42.783 | 1.690 | 44.473 | |
| Formation of reserves | 19 | − | − | 14.567 | (1.435) | 13.132 | − | 13.132 |
| Distribution of dividends | 19 | − | − | − | (34.572) | (34.572) | − | (34.572) |
| Treasury shares | 19 | − | − | (2.077) | − | (2.077) | − | (2.077) |
| Change in the percentage of a consolidated subsidiary | 5 | − | − | 6 | 1.127 | 1.133 | (1.013) | 120 |
| Distribution of reserves | − | − | (4.818) | − | (4.818) | − | (4.818) | |
| Transfers-Other movements | − | − | (8.020) | 8.020 | − | − | − | |
| Transactions with shareholders | − | − | (342) | (26.860) | (27.202) | (1.013) | (28.215) | |
| Total equity 30th June 2022 | 34.757 | 209.870 | 71.861 | 119.982 | 436.470 | 11.431 | 447.901 | |
*The comparative figures of the Group and the Company for the financial year 2022 have been restated in order to include only continuing operations, as a consequence of the recognition of the discontinued operations of the Company's segment (see. Notes 7.1 and 7.2 of the Annual Financial Statements at 31 December 2022), in accordance with the requirements of IFRS 5 "Non-current assets held for sale and discontinued operations".
Semi-Annual Financial Report for the period from January 1st to June 30th 2023
(Amounts in Euro thousand unless stated otherwise)
| Note | Share capital |
Share premium |
Reserves | Retained Earnings |
Subtotal | Non controlling interests |
Total | |
|---|---|---|---|---|---|---|---|---|
| 1 January 2023 | 34.757 | 209.870 | 107.180 | 129.287 | 481.094 | 10.082 | 491.176 | |
| Net profit for the year from continuing operations | − | − | − | 22.180 | 22.180 | 866 | 23.046 | |
| Other comprehensive income | − | |||||||
| Foreign exchange translation differences from incorporation of foreign | − | − | 2.206 | − | 2.206 | − | 2.206 | |
| operations Gains/(losses) from valuation of participating interest at fair value (not reclassified in the Statement of Comprehensive Income) |
− | − | 40 | − | 40 | − | 40 | |
| Cast flows hedges | 15 | − | − | 611 | − | 611 | − | 611 |
| Actuarial losses from defined benefit plans | 16 | − | − | (7) | − | (7) | − | (7) |
| Other comprehensive income for the year (after tax) | − | − | 2.850 | − | 2.850 | − | 2.850 | |
| Total comprehensive income for the year | − | − | 2.850 | 22.180 | 25.030 | 866 | 25.896 | |
| Capitalization of reserves & retained earnings | 19 | 675 | (675) | − | (3) | (3) | − | (3) |
| Formation of reserves | 19 | − | − | 3.444 | (2.997) | 447 | − | 447 |
| Distribution of dividends | 19 | − | − | − | (42.400) | (42.400) | (1.023) | (43.423) |
| Distribution of reserves | 19 | − | − | (2.826) | − | (2.826) | − | (2.826) |
| Transfers-Other movements | − | − | (46.800) | 46.800 | − | − | − | |
| Transactions with shareholders | 675 | (675) | (46.182) | 1.400 | (44.782) | (1.023) | (45.805) | |
| Total equity 30th June 2023 | 35.432 | 209.195 | 63.848 | 152.867 | 461.342 | 9.925 | 471.267 |
Note:
Semi-Annual Financial Report for the period from January 1st to June 30th 2023
(Amounts in Euro thousand unless stated otherwise)
| Note | Share capital |
Share premium |
Reserves | Retained Earnings | Subtotal | |
|---|---|---|---|---|---|---|
| 1 January 2022 | 34.757 | 209.870 | 17.469 | 50.385 | 312.481 | |
| Net profit for the year from continuing operations | − | − | − | 26.533 | 26.533 | |
| Other comprehensive income | ||||||
| Gains/(losses) from valuation of participating interest at fair value (not reclassified in the Statement of Comprehensive Income) |
− | − | (62) | − | (62) | |
| Cast flows hedges | 15 | − | − | (6.501) | − | (6.501) |
| Other comprehensive income for the year (after tax) | − | − | (6.563) | − | (6.563) | |
| Total comprehensive income for the year | − | − | (6.563) | 26.533 | 19.970 | |
| Formation of reserves | 19 | − | − | 13.272 | (140) | 13.132 |
| Distribution of dividends | 19 | − | − | − | (34.572) | (34.572) |
| Treasury shares | 19 | − | − | (2.077) | − | (2.077) |
| Change in the percentage of a consolidated subsidiary | − | − | − | (180) | (180) | |
| Distribution of reserves | − | − | (4.818) | − | (4.818) | |
| Transfers-Other movements | − | − | 1 | (1) | − | |
| Transactions with shareholders | − | − | 6.378 | (34.893) | (28.515) | |
| 30th June 2022 | 34.757 | 209.870 | 17.284 | 42.025 | 303.936 |
*The comparative figures of the Group and the Company for the financial year 2022 have been restated in order to include only continuing operations, as a consequence of the recognition of the discontinued operations of the Company's segment (see. Notes 7.1 and 7.2 of the Annual Financial Statements at 31 December 2022), in accordance with the requirements of IFRS 5 "Non-current assets held for sale and discontinued operations".
Semi-Annual Financial Report for the period from January 1st to June 30th 2023
(Amounts in Euro thousand unless stated otherwise)
| Note | Share capital | Share premium |
Reserves | Retained Earnings |
Total | |
|---|---|---|---|---|---|---|
| 1 January 2023 | 34.757 | 209.870 | 48.012 | 43.718 | 336.357 | |
| Net profit for the year from continuing operations | − | − | − | 25.473 | 25.473 | |
| Other comprehensive income | ||||||
| Gains/(losses) from valuation of participating interest at fair value (not reclassified in the Statement of Comprehensive Income) |
− | − | 40 | − | 40 | |
| Cast flows hedges | 15 | − | − | 6.005 | − | 6.005 |
| Other comprehensive income for the year (after tax) | − | − | 6.045 | − | 6.045 | |
| Total comprehensive income for the year | − | − | 6.045 | 25.473 | 31.518 | |
| Capitalization of reserves & retained earnings | 19 | 675 | (675) | − | (3) | (3) |
| Formation of reserves | 19 | − | − | 659 | (211) | 448 |
| Distribution of dividends | 19 | − | − | − | (42.399) | (42.399) |
| Distribution of reserves | 19 | − | − | (2.826) | − | (2.826) |
| Transfers-Other movements | − | − | (46.800) | 46.800 | − | |
| Transactions with shareholders | 675 | (675) | (48.967) | 4.187 | (44.780) | |
| 30th June 2023 | 35.432 | 209.195 | 5.090 | 73.378 | 323.095 |
TERNA ENERGY Group of companies (hereinafter "the Group" or "TERNA ENERGY") is a Greek Group of companies operating in the sectors of renewable energy sources, construction, trading of electric energy and concessions. The key operations of the Group pertain to construction and exploitation of installations of renewable sources of wind and hydroelectric energy, photovoltaic parks as well as other renewable energy sources (RES).
TERNA ENERGY holds Class 6 contractor certificate and its operations in the construction sector include construction of private and public projects as a main contractor or subcontractor or through joint ventures. Based on the effective legislation, it can undertake private or self-financed projects (based on Law 4412/2016), regardless of budgeting, depending on the technical and financial criteria established every time, independently or through a joint venture.
TERNA ENERGY has succeeded the Technical Constructions Company (ETKA SA), established in 1949 (Government Gazette 166/21.06.1949), which TERNA ENERGY S.A. absorbed in 1999 and which was established in 1997 (Government Gazette 6524/11.09.1997). TERNA ENERGY is domiciled in Athens, Greece, 85 Mesogeion Ave. The Company has been listed on ATHEX since 2007.
The Group's operations are mainly performed in Greece, while the Group also has a strong presence in the Balkans and Eastern Europe. The Group's operations focus on the following operating segments:
• Constructions: almost exclusively, contracts regarding technical works.
• Electric energy from RES: production of electricity through wind farms, solar and hydroelectric energy and biomass.
• Concessions: construction and operation of public sector works (Unified Automatic Collection System and municipal waste treatment facility) in exchange for their long-term exploitation rendering services to the public.
The companies of TERNA ENERGY Group included in the consolidated Financial Statements and their tax noninspected FYs are analytically recorded in Note 4 of the Financial Statements.
The parent company of TERNA ENERGY is GEK TERNA S.A., also a listed entity on the Athens Stock Exchange, Greece. On 30/06/2023. GEK TERNA SA held 36,587% (31/12/2022: 37,298%) of TERNA ENERGY's issued share capital and voting rights. The financial statements of TERNA ENERGY Group are consolidated in the financial statements of GEK TERNA S.A. under the full consolidation method, given the fact that they comply with the provisions of IFRS 10 assessing that GEK TERNA S.A. exercises control over TERNA ENERGY S.A.
The enclosed separate and consolidated Financial Statements as of 31st December 2021 were approved by the Board of Directors on 21/09/2023.
The Company's Interim Condensed Consolidated Financial Statements as at 30 June 2023 covering the sixmonth period from 1 January to 30 June 2023 omply with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB), and their Interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC) and adopted by the European Union by 30 June 2023. The Financial Statements for the six-month period ended 30 June 2023 have been prepared in accordance with the provisions of International Accounting Standard (IAS) 34 "Interim Financial Reporting". The Group applies all International Accounting Standards (IASs), International Financial Reporting Standards (IFRSs) and their Interpretations that are applicable to its operations.
The Group applies all the International Accounting Standards (IAS), the International Financial Reporting Standards (IFRS) and their Interpretations that apply to its operations. The relevant accounting policies, a synopsis of which is presented in the Note 2.6, have been consistently applied in all the presented periods.
In determining the appropriate basis for the preparation of the Consolidated and Company Financial Statements, management should consider whether the Group is capable of continuing in business for the foreseeable future. Management believes that the Group and the Company have sufficient resources to ensure that the Group and the Company will continue to operate as a "Going Concern" for the foreseeable future.
The accompanying Condensed Interim Consolidated and Standalone Financial Statements as of June 30th , 2023, have been prepared according to the principle of historical cost, apart from financial derivatives, liability for contingent consideration and investments in equity instruments which are being measured at fair value.
The presentation currency is Euro (the currency of the Group's parent Headquarters) and all the amounts are presented in thousand Euro unless otherwise mentioned.
The comparative figures in the Consolidated and Separate Statements of Comprehensive Income and the Consolidated and Separate Statements of Cash Flows have been restated to present the adjustments required to reflect only the Group's continuing operations. (see Note 7.1 of the Annual Financial Statements 31.12.2022)
The preparation of the Financial Statements according to IFRS requires the use of estimates and judgments on the application of the Company's accounting policies. Judgments, assumptions and estimates of the Management affect the amount of valuation of several asset and liability items, the amount recognized during the year regarding specific income and expenses as well as the presented estimates of contingent liabilities.
Assumptions and estimates are assessed on an on-going basis according to historic experience and other factors, including expectations of future event outcomes, considered reasonable given the current conditions. The estimates and assumptions relate to the future and, consequently, the actual results may differ from the accounting calculations.
The areas requiring the highest degree of judgment as well as the factors mostly affecting the consolidated Financial Statements are presented in Note 3 of the Annual Financial Statements ended on 31st of December 2022.
In particular, the Management examined the special circumstances that could have a significant impact on the business operations of the RES operating segment and the risks which the Group is exposed to (see analytically Note 3 to the accompanying Interim Condensed Financial Statements as of 30/06/2022).
In the electricity sector from RES, in Greece, Central and Eastern Europe, there was no interruption or other negative impact on the operation of the facilities that the Group exploits. In accordance with the accounting policies followed and the requirements of IAS 36, the Group performs impairment tests on the assets at the end of each annual reporting period. The impairment test, in accordance with the requirements of IAS 36, may be carried out earlier, when there are indications of possible impairment loss. From the relevant impairment test carried out on 30/06/2022, and focusing on both external and internal factors, there was no need to recognize impairment losses in the Interim Condensed Financial Statements as of 30 June 2022. It is noted that the Management will continue to monitor the developments for the rest of the year and adjust its estimates accordingly if required.
Regarding the Group's revenue collections, the Group has not identified significant discrepancies regarding the course of collections in each key operating segment, to the extent they could constitute an indication of significant delays in the collections of each operating segment. In this context, there was no need to recognize additional credit loss provisions in accordance with the requirements of IFRS 9.
The Condensed Interim Financial Statements for the six-month period ended as at 30/06/2023 comprise of a limited scope of information as compared to that presented in the annual Financial Statements. The accounting policies, based on which the Financial Statements were prepared, are consistent with those used under the preparation of the annual Financial Statements for the year ended as at 31/12/2022, except for the changes to Standards and Interpretations in force since 01/01/2023 (see Notes 2.6.1 and 2.6.2.).
Therefore, the attached condensed interim six-month financial statements should be read in line with the latest published annual Financial Statements as of 31/12/2022 that include a full analysis of the accounting policies and valuation methods used.
The following new Standards, Interpretations, and amendments of IFRSs have been issued by the International Accounting Standards Board (IASB), are adopted by the European Union, and their application is mandatory from or after 01/01/2023.
In February 2021, the IASB issued limited purpose amendments relating to disclosures of accounting policies. The purpose of the amendments is to improve disclosures of accounting policies to provide more useful information to investors and other users of financial statements. In particular, the amendments require disclosure of significant information about accounting policies, rather than disclosure of significant accounting policies. The Group will consider the impact of all of the above on its Financial Statements. The above have been adopted by the European Union with an effective date of 01/01/2023.
In February 2021, the IASB issued limited purpose amendments that clarify the difference between a change in accounting estimate and a change in accounting policy. This distinction is important because a change in accounting estimate is applied without retrospective effect and only to future transactions and other future events, as opposed to a change in accounting policy, which is retrospective and applies to past transactions and other past events. The Group will consider the impact of all of the above on its Financial Statements, although it is not expected to have any. The above has been adopted by the European Union with an effective date of 01/01/2023.
In May 2021, the IASB issued targeted amendments to IAS 12 to specify how entities should treat deferred tax arising from transactions such as leases and release obligations - transactions for which entities simultaneously recognise a receivable and a liability. In certain circumstances, entities are exempt from recognising deferred tax when they recognise assets or liabilities for the first time. The amendments clarify that this exemption does not apply and entities are required to recognise deferred tax on these transactions. The Group will consider the impact of all of the above on its Financial Statements, although it is not expected to have any. The above has been adopted by the European Union with an effective date of 01/01/2023.
The following new Standards, Interpretations and amendments to Standards have been issued by the International Accounting Standards Board (IASB) but are either not yet effective or have not yet been adopted by the European Union.
In May 2023, the International Accounting Standards Board (IASB) issued amendments to IAS 12 "Income Taxes" related to the Pillar Two Rules of the International Tax Reform,. The amendments introduced: a) a temporary exemption from the recognition requirements for accounting for deferred taxes arising from the implementation of the International Tax Reform (Pillar II) and b) additional disclosures for affected entities. Entities may apply the temporary exemption immediately, but the disclosures are required for the annual period beginning on or after 1 January 2023. The Group will consider the impact of all of the above on its Financial Statements, although it is not expected to have any. The above have not been adopted by the European Union.
In January 2020, the IASB issued amendments to IAS 1 that affect the presentation requirements for liabilities. Specifically, the amendments clarify one of the criteria for classifying a liability as non-current, the requirement for an entity to have the right to defer settlement of the liability for at least 12 months after the reporting period. The amendments include: (a) clarification that an entity's right to defer settlement should exist at the reporting date; (b) clarification that the classification of the liability is not affected by management's intentions or expectations regarding the exercise of the right to defer settlement, (c) explain how borrowing conditions affect the classification; and (d) clarify the requirements for classifying liabilities of an entity that is to be or may be settled by issuing its own equity instruments. In addition, in July 2020, the IASB issued an amendment to defer by one year the effective date of the originally issued amendment to IAS 1 as a result of the spread of the Covid-19 pandemic. However, in October 2022, the IASB issued an additional amendment aimed at improving the information that companies provide about long-term debt covenants. IAS 1 requires a company to classify a loan as long-term only if the company can avoid settlement of the loan within 12 months after the reporting date. However, a company's ability to do so often depends on compliance with its covenants. The amendments to IAS 1 specify that covenants that must be met after the reporting date do not affect the classification of the loan as current or non-current at the reporting date. Instead, the amendments to the Standard require an entity to disclose information about those commitments in the notes to the financial statements. The amendments are effective for annual periods beginning on or after January 1, 2024, with early adoption permitted. The Group will consider the impact of all of the above on its Financial Statements, although it is not expected to have any. The above have not been adopted by the European Union.
In September 2022, the IASB issued limited purpose amendments to IFRS 16 Leases that add requirements on how an entity accounts for a sale and leaseback ("sale and leaseback") after the transaction date. A sale and leaseback is a transaction in which an entity sells an asset and leases the same asset back for a period of time from the new owner. IFRS 16 includes requirements on the accounting treatment of a sale and leaseback at the date of the transaction. However, the Standard had not specified how to measure the transaction after that date. The amendments issued add to the requirements in IFRS 16 on sale and leaseback, thereby supporting consistent application of the accounting standard. These amendments will not change the accounting treatment for leases other than those arising from a sale and leaseback transaction. The Group will consider the impact of all the above on its Financial Statements, although it is not expected to have any. The above has not been adopted by the European Union.
In May 2023, the International Accounting Standards Board (IASB) issued amendments ("Supplier Finance Arrangements"), which amended IAS 7 "Statement of Cash Flows" and IFRS 7 "Financial Instruments: Disclosures". The IASB issued Supplier Financing Arrangements requiring an entity to provide additional disclosures about supplier financing arrangements. The amendments require additional disclosures that supplement the existing disclosures in those two standards. Those disclosures are intended to help users of financial statements (a) assess how supplier financing arrangements affect an entity's liabilities and cash flows, and (b) understand the effect of supplier financing arrangements on liquidity risks and how the entity might be affected if those financial instruments are no longer available. The amendments to IAS 7 and IFRS 7 are effective for the accounting period beginning on or after 1 January 2024. The Group will consider the impact of all the above on its Financial Statements, although it is not expected to have any. The above have not been adopted by the European Union.
In August 2023, the International Accounting Standards Board (IASB) issued amendments to IAS 21 "The Effects of Changes in Foreign Exchange Rates" that require entities to provide more useful information in their financial statements when a currency cannot be exchanged for another currency. The amendments include the introduction of a definition of the exchangeability of a currency and the process by which an entity should assess that exchangeability. In addition, the amendments provide guidance on how an entity should calculate the spot rate in situations where the currency is not exchangeable and require additional disclosures in situations where an entity has calculated an exchange rate because of a lack of exchangeability. The amendments to IAS 21 are effective for accounting periods beginning on or after 1 January 2025. The Group will consider the impact of all of the above on its Financial Statements, although it is not expected to have any. The above have not been adopted by the European Union.
The Group's activities expose it to various financial risks such as market risk (including currency risk, interest rate risk and price volatility risk), credit risk and liquidity risk.
The interim condensed financial information does not include all the financial risk management information and disclosures required in the annual financial statements as of 31st December 2022 and should therefore be read in conjunction with them. There has been no change in risk management policies compared to 31 December 2022.
The military conflict in the region of Ukraine continues and the chances for resolution remain slim. TERNA ENERGY Group continues to closely monitor the situation, which has not and is not expected to have a direct impact on its figures and performance. Given that most of the Wind Parks have a fixed sales price, the significant costs are depreciation of equipment and borrowing costs refer to fixed rate loans, the impact is still insignificant, and this is not expected to change in the foreseeable future. In the operating segment of "Concessions" no significant impact is expected due to the structure of the contracts governing these functions.
Finally, due to the dynamics of these events, new risks may arise. Considering the current uncertainty in the broader economic climate, the Group's management is trying to assess in a prompt manner any indirect effects on the Group.
Regarding its activity in the energy sector, the Group remains exposed to the short-term fluctuations of wind and hydrological data, without affecting the long-term profitability of its projects, if the implementation of its investments is preceded by extensive studies involving long-term studies of the above factors. From now on, calculation models should incorporate new factors allowing for the occurrence of potential events of force majeure, such as the current epidemic, in order to examine in greater depth, the viability of any projected investment.
The following table presents the consolidated companies of TERNA ENERGY as at 30/06/2023, their headquarters, business activity, the Company's direct and indirect shareholding interests in their share capital, method of consolidation and tax non-audited years.
The following companies are included in the corporate financial statements using the proportionate consolidation method.
| ECONOMIC ENTITY | DOMICIL E |
DIRECT PARTI CIPATIO N % |
INDIRE CT PARTI CIPATIO N % |
TOTAL PARTI CIPATIO N % |
CONSOLIDAT ION METHOD |
SUBSIDIARY OF INDIRECT PARTICIPATION |
UNAUDITE D FISCAL YEARS |
|---|---|---|---|---|---|---|---|
| CONSTRUCTION SEGMENT - JOINT OPERATIONS |
|||||||
| J/V GEK TERNA - TERNA ENERGY (INSTALLATION AND OPERATION ASSK) |
Greece | 50,00 | − | 50,00 | Proportional | - | 2017-2022 |
| RES ENERGY SEGMENT - JOINT OPERATIONS |
|||||||
| ILIAKI PIKROLIMNIS S.A. | Greece | 51,00 | − | 51,00 | Proportional | - | 2020-2022 |
| ILIAKA VAKOUFIA SINGLE MEMBER PC | Greece | − | 51,00 | 51,00 | Proportional | ILIAKI PIKROLIMNIS S.A. | 2020-2022 |
| FOTOVOLTAIKA KILKIS SINGLE MEMBER PC | Greece | − | 51,00 | 51,00 | Proportional | ILIAKI PIKROLIMNIS S.A. | 2020-2022 |
As at 30/06/2023, the Group structure is as follows:
(Amounts in Euro thousand unless stated otherwise)
| ECONOMIC ENTITY | DOMICIL E |
DIRECT PARTI CIPATIO N % |
INDIRE CT PARTI CIPATIO |
TOTAL PARTI CIPATIO N % |
CONSOLIDAT ION METHOD |
SUBSIDIARY OF INDIRECT PARTICIPATION |
UNAUDITE D FISCAL YEARS |
|---|---|---|---|---|---|---|---|
| HOLDINGS AND FINANCING - SUBSIDIARIES |
N % | ||||||
| TERNA ENERGY FINANCE S.A. | Greece | 100,00 | − | 100,00 | Full | - | 2017-2022 |
| TERNA ENERGY OVERSEAS LTD | Cyprus | 100,00 | − | 100,00 | Full | - | 2017-2022 |
| TERNA ENERGY USA HOLDING CORPORATION |
U.S.A. | − | 100,00 | 100,00 | Full | TERNA ENERGY TRANSATLANTIC sp.z.o.o. |
2011-2022 |
| TERNA ENERGY TRANSATLANTIC sp.z.o.o. | Poland | − | 100,00 | 100,00 | Full | TERNA ENERGY OVERSEAS LTD |
2015-2022 |
| GALLETTE LTD | Cyprus | − | 100,00 | 100,00 | Full | ENERGIAKI SERVOUNIOU S.A. |
2015-2022 |
| RES ENERGY SEGMENT - SUBSIDIARIES | |||||||
| AIOLIKI PANORAMATOS DERVENOCHORION S.A. |
Greece | 100,00 | − | 100,00 | Full | - | 2017-2022 |
| PPC RENEWABLES - TERNA ENERGY S.A. | Greece | 51,00 | − | 51,00 | Full | - | 2017-2022 |
| ENERGIAKI SERVOUNIOU S.A. | Greece | 100,00 | − | 100,00 | Full | - | 2017-2022 |
| IWECO HONOS CRETE S.A. | Greece | 100,00 | − | 100,00 | Full | - | 2017-2022 |
| TERNA ENERGY EVROU S.A. | Greece | 100,00 | − | 100,00 | Full | - | 2017-2022 |
| AIOLIKI RACHOULAS DERVENOCHORION S.A. |
Greece | 100,00 | − | 100,00 | Full | - | 2017-2022 |
| ENERGIAKI DERVENOCHORION S.A. | Greece | 100,00 | − | 100,00 | Full | - | 2017-2022 |
| AIOLIKI MARMARIOU EUVOIAS M.A.E. | Greece | 100,00 | − | 100,00 | Full | - | 2017-2022 |
| ENERGEIAKI DYSTION EUVOIAS M.A.E. | Greece | 100,00 | − | 100,00 | Full | - | 2017-2022 |
| AIOLIKI KARYSTIAS EVOIA S.A. | Greece | 100,00 | − | 100,00 | Full | - | 2017-2022 |
| ENERGEIAKI KAFIREOS EUVOIAS S.A. | Greece | 100,00 | − | 100,00 | Full | - | 2017-2022 |
| ENERGIAKI STYRON EVIAS M.A.E. | Greece | 100,00 | − | 100,00 | Full | - | 2017-2022 |
(Amounts in Euro thousand unless stated otherwise)
| ENERGIAKI NEAPOLEOS LAKONIAS S.A. | Greece | 100,00 | − | 100,00 | Full | - | 2017-2022 |
|---|---|---|---|---|---|---|---|
| AIOLIKI MALEA LAKONIAS S.A. | Greece | 100,00 | − | 100,00 | Full | - | 2017-2022 |
| TERNA ENERGY SA AND CO ENERGEIAKI VELANIDION LAKONIAS G.P. |
Greece | 99,00 | 1,00 | 100,00 | Full | IWECO HONOS CRETE S.A. | 2017-2022 |
| AIOLIKI EASTERN GREECE M.A.E. | Greece | 100,00 | − | 100,00 | Full | - | 2017-2022 |
| AIOLIKI PASTRA ATTIKIS S.A. | Greece | 99,00 | 1,00 | 100,00 | Full | IWECO HONOS CRETE S.A. | 2017-2022 |
| ENERGIAKI PELOPONNISOU S.A. | Greece | 100,00 | − | 100,00 | Full | - | 2017-2022 |
| AIOLIKI PROVATA TRAIANOUPOLEOS M.A.E. |
Greece | 100,00 | − | 100,00 | Full | - | 2017-2022 |
| AIOLIKI DERVENI TRAIANOUPOLEOS S.A. | Greece | 100,00 | − | 100,00 | Full | - | 2017-2022 |
| ENERGIAKI FERRON EVROU M.A.E. | Greece | 100,00 | − | 100,00 | Full | - | 2017-2022 |
| TERNA ENERGY S.A. AND CO ENERGIAKI ARI SAPPON G.P. |
Greece | 99,00 | 1,00 | 100,00 | Full | IWECO HONOS CRETE S.A. | 2017-2022 |
| TERNA ENERGY S.A. AND Co AIOLIKI POLYKASTROU G.P. |
Greece | 99,00 | 1,00 | 100,00 | Full | IWECO HONOS CRETE S.A. | 2017-2022 |
| ENERGEIAKI XIROVOUNIOU S.A. | Greece | 100,00 | − | 100,00 | Full | - | 2017-2022 |
| AIOLIKI ILIOKASTROU M.A.E. | Greece | − | 100,00 | 100,00 | Full | TERNA ENERGY EVROU S.A. |
2017-2022 |
| EUROWIND S.A. | Greece | − | 100,00 | 100,00 | Full | ENERGIAKI SERVOUNIOU S.A. |
2017-2022 |
| DELTA AXIOU ENERGEIAKI S.A. | Greece | 80,00 | − | 80,00 | Full | - | 2017-2022 |
| TERNA ENERGY S.A. AND VECTOR GREECE WIND PARKS - TROULOS WIND PARK G.P. |
Greece | 90,00 | − | 90,00 | Full | - | 2017-2022 |
| TERNA ENERGY SEA WIND PARKS S.A. | Greece | 85,00 | − | 85,00 | Full | - | 2017-2022 |
| TERNA ENERGY WIND PARKS XIROKAMPOS AKRATAS S.A. |
Greece | 77,00 | − | 77,00 | Full | - | 2017-2022 |
| TERNA ENERGY SAPPON PC | Greece | 100,00 | − | 100,00 | Full | - | 2020-2022 |
| VATHICHORI ENVIRONMENTAL S.A. | Greece | − | 100,00 | 100,00 | Full | TERNA ENERGY OVERSEAS LTD |
2017-2022 |
|---|---|---|---|---|---|---|---|
| VATHICHORI ONE PHOTOVOLTAIC S.A. | Greece | − | 100,00 | 100,00 | Full | VATHICHORI ENVIRONMENTAL S.A. |
2017-2022 |
| ALISTRATI ENERGY LTD | Greece | 80,00 | − | 80,00 | Full | - | 2017-2022 |
| ΤΕRΝΑ ENERGY AI-GIORGIS S.A. | Greece | 99,40 | 0,60 | 100,00 | Full | IWECO HONOS CRETE S.A. | 2017-2022 |
| TERNA AIOLIKI XEROVOUNIOU S.A. | Greece | − | 100,00 | 100,00 | Full | AIOLIKI PANORAMATOS DERVENOCHORION S.A. |
2017-2022 |
| ΤΕRΝΑ AIOLIKI AITOLOAKARNANIAS S.A. | Greece | − | 100,00 | 100,00 | Full | AIOLIKI MALEA LAKONIAS S.A. |
2017-2022 |
| ΤΕRΝΑ AIOLIKI AMARINTHOU S.A. | Greece | − | 100,00 | 100,00 | Full | ENERGIAKI SERVOUNIOU S.A. |
2017-2022 |
| ΤΕRΝΑ ILIAKI PANORAMATOS S.A. | Greece | 100,00 | − | 100,00 | Full | - | 2017-2022 |
| ΤΕRΝΑ ILIAKI PELLOPONISSOU S.A. | Greece | 100,00 | − | 100,00 | Full | - | 2017-2022 |
| ΤΕRΝΑ ILIAKI VIOTIAS S.A. | Greece | 100,00 | − | 100,00 | Full | - | 2017-2022 |
| AIOLIKI STEREAS ELLADOS M.A.E. | Greece | 100,00 | − | 100,00 | Full | - | 2017-2022 |
| VATHICHORI TWO ENERGY S.A. | Greece | − | 100,00 | 100,00 | Full | TERNA ENERGY OVERSEAS LTD |
2017-2022 |
| TERNA ENERGY OMALIES M.A.E. | Greece | 100,00 | − | 100,00 | Full | - | 2017-2022 |
| EVOIKOS ANEMOS S.A. | Greece | 70,00 | − | 70,00 | Full | - | 2020-2022 |
| KEY SOLAR ENERGY SINGLE MEMBER PC | Greece | 100,00 | − | 100,00 | Full | - | 2020-2022 |
| KASTRAKI SOLAR ENERGY SINGLE MEMBER PC |
Greece | 100,00 | − | 100,00 | Full | - | 2020-2022 |
| TERNA ENERGY-PUMPED STORAGE I S.M.S.A. |
Greece | 100,00 | − | 100,00 | Full | - | 2022 |
| TERNA ENERGY FIVE TOWERS GP | Greece | 90,00 | 10,00 | 100,00 | Full | IWECO HONOS CRETE S.A. | 2017-2022 |
| HAOS INVEST 1 EAD | Bulgaria | − | 100,00 | 100,00 | Full | TERNA ENERGY OVERSEAS LTD |
2017-2022 |
| ECO ENERGY DOBRICH 2 EOOD | Bulgaria | − | 100,00 | 100,00 | Full | TERNA ENERGY OVERSEAS LTD |
2017-2022 |
|---|---|---|---|---|---|---|---|
| ECO ENERGY DOBRICH 3 EOOD | Bulgaria | − | 100,00 | 100,00 | Full | TERNA ENERGY OVERSEAS LTD |
2017-2022 |
| ECO ENERGY DOBRICH 4 EOOD | Bulgaria | − | 100,00 | 100,00 | Full | TERNA ENERGY OVERSEAS LTD |
2017-2022 |
| EOLOS NORTH sp.z.o.o. | Poland | − | 100,00 | 100,00 | Full | TERNA ENERGY OVERSEAS LTD |
2017-2022 |
| EOLOS NOWOGRODZEC sp.z.o.o. | Poland | − | 100,00 | 100,00 | Full | TERNA ENERGY OVERSEAS LTD |
2017-2022 |
| EOLOS POLSKA sp.z.o.o. | Poland | − | 100,00 | 100,00 | Full | TERNA ENERGY OVERSEAS LTD |
2017-2022 |
| EOLOS EAST sp.z.o.o. | Poland | − | 100,00 | 100,00 | Full | TERNA ENERGY OVERSEAS LTD |
2017-2022 |
| JP GREEN sp.z.o.o. | Poland | − | 100,00 | 100,00 | Full | TERNA ENERGY OVERSEAS LTD |
2017-2022 |
| WIRON sp.z.o.o. | Poland | − | 100,00 | 100,00 | Full | TERNA ENERGY OVERSEAS LTD |
2017-2022 |
| BALLADYNA sp.z.o.o. | Poland | − | 100,00 | 100,00 | Full | TERNA ENERGY OVERSEAS LTD |
2017-2022 |
| EOLOS DEVELOPMENT Sp.z o.o | Poland | − | 100,00 | 100,00 | Full | TERNA ENERGY OVERSEAS LTD |
2021-2022 |
| AEGIS RENEWABLES, LLC | U.S.A. | − | 100,00 | 100,00 | Full | TERNA ENERGY USA HOLDING CORPORATION |
2011-2022 |
| MOUNTAIN AIR HOLDINGS, LLC | U.S.A. | − | 100,00 | 100,00 | Full | TERNA ENERGY USA HOLDING CORPORATION |
2011-2022 |
| TERNA RENEWABLE ENERGY PROJECTS LLC | U.S.A. | − | 100,00 | 100,00 | Full | TERNA ENERGY USA HOLDING CORPORATION |
2016-2022 |
| TERNA DEN LLC | U.S.A. | − | 100,00 | 100,00 | Full | TERNA ENERGY USA HOLDING CORPORATION |
2016-2022 |
| FLUVANNA I INVESTOR, LCC | U.S.A. | − | 100,00 | 100,00 | Full | TERNA ENERGY USA HOLDING CORPORATION |
2017-2022 |
| FLUVANNA INVESTMENTS 2, LLC | U.S.A. | − | 100,00 | 100,00 | Full | TERNA ENERGY USA HOLDING CORPORATION |
2018-2022 |
| CI-II BEARKAT QFPF, LLC | U.S.A. | − | 100,00 | 100,00 | Full | TERNA ENERGY USA HOLDING CORPORATION |
2016-2022 |
| CI-II BEARKAT HOLDING B, LLC | U.S.A. | − | 100,00 | 100,00 | Full | TERNA ENERGY USA HOLDING CORPORATION |
2016-2022 |
(Amounts in Euro thousand unless stated otherwise)
| SPONSOR BEARKAT I HOLDCO, LLC | U.S.A. | − | 100,00 | 100,00 | Full | TERNA ENERGY USA HOLDING CORPORATION |
2017-2022 |
|---|---|---|---|---|---|---|---|
| TERNA DER, LLC | U.S.A. | − | 100,00 | 100,00 | Full | TERNA ENERGY USA HOLDING CORPORATION |
|
| TERNA DER 2, LLC | U.S.A. | − | 100,00 | 100,00 | Full | TERNA ENERGY USA HOLDING CORPORATION |
|
| TERNA DER 3, LLC | U.S.A. | − | 100,00 | 100,00 | Full | TERNA ENERGY USA HOLDING CORPORATION |
0 |
| RES ENERGY SEGMENT - JOINT VENTURES | |||||||
| ΕΝ.ΕR.ΜΕL S.A. | Greece | 50,00 | − | 50,00 | Equity | - | 2016-2022 |
| RES ENERGY SEGMENT - ASSOCIATES | |||||||
| CYCLADES RES ENERGY CENTER SA | Greece | − | 45,00 | 45,00 | Equity | IWECO HONOS CRETE S.A. | 2016-2022 |
| ARMONIA ENERGY SOCIETY | Greece | 12,50 | − | 12,50 | Equity | - | 2019-2022 |
| CONCESSIONS SEGMENT - SUBSIDIARIES | |||||||
| HELLAS SMARTICKET S.A. | Greece | 35,00 | − | 35,00 | Full | - | 2017-2022 |
| PERIVALLONTIKI PELOPONNISOU M.A.E. | Greece | 100,00 | − | 100,00 | Full | - | 2017-2022 |
| EPIRUS SUSTAINABLE SINGLE OWNED SOCIETE ANONYME SPECIAL PURPOSE |
Greece | 100,00 | − | 100,00 | Full | - | 2017-2022 |
| CONCESSIONS SEGMENT - JOINT VENTURES |
|||||||
| WASTE CYCLO S.A. | Greece | 51,00 | − | 51,00 | Equity | - | 2017-2022 |
| ΤΕΡΝΑ FIBER SPECIAL PURPOSES SOCIETE ANONYME |
Greece | 50,10 | − | 50,10 | Equity | - | 2022 |
| CONSTRUCTION SEGMENT - JOINT VENTURES |
|||||||
| JV TENERGY-INDIGITAL-AMCO | Greece | 70,00 | − | 70,00 | Equity | - | 2020-2022 |
The percentage of voting rights of TERNA ENERGY SA in all the above holdings coincides with the percentage of the outstanding share capital or share capital of the companies.
HELLAS SMARTICKET S.A. ('HST') is fully consolidated as a subsidiary, as the Group exercises control over it in accordance with the requirements of IFRS 10.
• On 10 February 2023, the Group's parent company, TERNA ENERGY SA, acquired the entire shareholding of the company ANAX INDIVIDUAL CEMPLE COMPANY, which was renamed TERNA ENERGY SAPPON PC. The above company develops Photovoltaic Stations in the wider area of the Regional Unit of Evros with a total capacity of 246,35 MW.
The purpose of this acquisition is the subsequent implementation of the Group's new investments in the production of energy from renewable sources. Upon examination of the requirements of IFRS 3, resulted that the acquired assets and assumed liabilities of the above company do not constitute an "enterprise" as defined in IFRS 3 and therefore do not fall within the scope of that Standard, but these transactions are accounted for as an acquisition of assets. The accounting policy for the recognition of the transaction is described in the explanatory Note 4.21 of the Annual Consolidated and Company Financial Statements as at 31/12/2022. The cost of the acquisition was allocated to the individual identifiable assets and liabilities based on their relative fair values at the date of acquisition, and no goodwill arises from this type of transaction. The total acquisition price of this company, based on the terms of the Share Sale and Transfer Agreement, will depend on the successful outcome of securing the necessary permits for the installation of the photovoltaic panel power generation units, and was estimated at € 6,306 thousand using an appropriate discount rate of 7.95%. The fair value of the liability for the contingent consideration will be measured at
each reporting date and up to the estimated date of final measurement and payment, i.e. until 1/12/2023.
Analytical figures related to the acquisition of the above companies are presented below:
| TERNA ENERGY SAPPON SINGLE MEMBER PC | Fair values at the acquisition of entity |
|---|---|
| Intangible assets & Right-of-use assets | 6.278 |
| Property, plant and equipment | 2 |
| Prepayments and other receivables | 145 |
| Cash and cash equivalents | − |
| TOTAL ASSETS | 6.425 |
| Liabilities | |
| Suppliers & Liabilities from contracts with customers | 21 |
| Accrued and other short‐term liabilities | 98 |
| Total liabilities | 119 |
| Fair Value of acquaried net assets | 6.306 |
| Cash paid as of June 30th, 2023 (a) | 829 |
| Minus: Cash received (b) | − |
| Total Cash outflow as of June 30th, 2023 (a) - (b) | 829 |
The estimated total consideration for the acquisition, including the cash of the acquired company, amounted to € 6,306 thousand, of which € 829 thousand was settled in cash and € 5,477 thousand is a contingent consideration liability (at discounted value).
As a consequence of the above acquisition, the Group recognized intangible assets (licenses for photovoltaic production plants) amounting to € 5.822thousand. The fair value of the intangible assets has been based on a report by an independent appraiser. During the period from the date of acquisition of the companies until 30 June 2023, no results related to these companies have been realized.
• - During the first half of 2023, TERNA ENERGY Group established TERNA DER, LLC TERNA DER 2, LLC TERNA DER 3, LLC which are based in the USA, for the development of new renewable energy projects and liquidated MOHAVE VALLEY ENERGY LLC, FLUVANNA INVESTMENTS LLC, FLUVANNA HOLDINGS LLC, TERNA HOLDCO INC which had no assets and liabilities.
• On 17 May 2023, the Group's parent company, TERNA ENERGY S.A. established jointly with GRID TELECOM S.A. the company named TERNA FIBER SPECIAL PURPOSE S.A. This company is a vehicle company for the execution of the Partnership Agreement to be signed between the Greek State through the Minister of Digital Governance (hereinafter referred to as "the Contracting Authority"), the Company and the founders - original shareholders of the Company as third party contractors, for the execution of the project "Ultra High Speed Broadband Infrastructure - ULTRA FAST BROADBAND through PPP" for Geographical Zones 2, 4, 5 and 6, as indicated in the Call for Expression of Interest and the Call for Tenders Document.
Under the provisions of IFRS 8, an operating sector is a component of an entity: a) that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the same entity), and, b) whose operating results are regularly reviewed by the entity's chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance.
The term "chief operating decision maker" defines the function of the Group, which is to allocate resources to and assess the performance of the operating segments of an entity. For the application of IFRS 8, this function is assigned to the Board of Directors.
The Management separately monitors the operating results of the Group's individual operating segments in order to make the necessary decisions, allocate the available resources and evaluate their performance.
For management reporting purposes, the Group is organized in the following operating segments:
| Operating segments | Construction | Electricity from RES | Waste management |
E-Ticket | Intersegment consolidation eliminations |
Consolidated total |
Discontinued activies of Electricity trading |
Consolidated total |
|---|---|---|---|---|---|---|---|---|
| 30th June 2023 | ||||||||
| Continuing operations | ||||||||
| Revenue | ||||||||
| Sales of products and services | 26.784 | 105.424 | 6.549 | 6.883 | − | 145.640 | − | 145.640 |
| Intersegment revenue | 27.376 | − | − | − | (27.376) | − | − | − |
| Total revenue from continuing operations | 54.160 | 105.424 | 6.549 | 6.883 | (27.376) | 145.640 | − | 145.640 |
| Cost of sales | (49.471) | (47.904) | (4.834) | (5.709) | 25.387 | (82.531) | − | (82.531) |
| Gross profit from continuing operations | 4.689 | 57.520 | 1.715 | 1.174 | (1.989) | 63.109 | − | 63.109 |
| Administrative and distribution expenses | (90) | (16.122) | (367) | (288) | 15 | (16.852) | − | (16.852) |
| Research and development expenses | (415) | (3.303) | (1) | − | − | (3.719) | − | (3.719) |
| Other income/(expenses) and other gain/(losses)-ΕΒΙΤ determinants | (1.394) | 8.427 | 1.523 | 77 | − | 8.633 | − | 8.633 |
| Operating results (EBIT) from continuing operations | 2.790 | 46.522 | 2.870 | 963 | (1.974) | 51.171 | − | 51.171 |
| Other income/(expenses) and other gain/(losses)- non-ΕΒΙΤ determinants |
− | (1.167) | − | − | − | (1.167) | − | (1.167) |
| Operating results from continuing operations | 2.790 | 45.355 | 2.870 | 963 | (1.974) | 50.004 | − | 50.004 |
| Financial income | − | 511 | 2.381 | 1.552 | − | 4.444 | − | 4.444 |
| Financial expenses | (204) | (21.553) | (2.332) | (505) | 168 | (24.426) | − | (24.426) |
| Gains/(Losses) from financial instruments measured at fair value | − | (270) | − | − | − | (270) | − | (270) |
| profit before tax from continuing operations | 2.586 | 24.043 | 2.919 | 2.010 | (1.806) | 29.752 | − | 29.752 |
| Income tax expense | 30 | (5.685) | (642) | (409) | − | (6.706) | − | (6.706) |
| Net profit for the year from continuing operations | 2.616 | 18.358 | 2.277 | 1.601 | (1.806) | 23.046 | − | 23.046 |
| Depreciation | (249) | (26.557) | (89) | (10) | 1.148 | (25.757) | − | (25.757) |
| Grants' amortisation | − | 2.676 | − | − | − | 2.676 | − | 2.676 |
| Operating segments | Construction | Electricity from RES |
Waste management |
E-Ticket | Intersegment consolidation eliminations |
Consolidated total |
Discontinued activies of Electricity trading |
Consolidated total |
|---|---|---|---|---|---|---|---|---|
| 30th June 2023 | ||||||||
| Segment assets (except of investments) | 57.185 | 1.909.369 | 107.019 | 35.617 | (61.805) | 2.047.385 | 26.068 | 2.073.453 |
| Investment in associates and joint ventures | - | 4.248 | - | - | - | 4.248 | - | 4.248 |
| Total assets | 57.185 | 1.913.617 | 107.019 | 35.617 | (61.805) | 2.051.633 | 26.068 | 2.077.701 |
| Segment liabilities | 30.355 | 1.471.568 | 82.975 | 21.493 | - | 1.606.391 | 43 | 1.606.434 |
| Long‐term loans | - | 937.539 | 56.441 | 10.181 | - | 1.004.161 | - | 1.004.161 |
| Short‐term loans | - | 216 | - | - | - | 216 | - | 216 |
| Long‐term liabilities carried forward | - | 136.608 | 19.585 | 3.549 | - | 159.742 | - | 159.742 |
| Cash and cash equivalents | - | (296.168) | (21.124) | (6.065) | - | (323.357) | - | (323.357) |
| Restricted cash (Note 12) | - | (68.124) | (1.320) | (399) | - | (69.843) | - | (69.843) |
| Net debt/(surplus) | - | 710.071 | 53.582 | 7.266 | - | 770.919 | - | 770.919 |
| Lease liabilities | 10.834 | 18.356 | - | 46 | - | 29.236 | - | 29.236 |
| Capital expenditures for the year | - | 128.360 | 5 | - | (2.732) | 125.633 | - | 125.633 |
Semi-Annual Financial Report for the period from January 1st to June 30th , 2023
| Operating segments | Construction | Electricity from RES | Waste management |
E-Ticket | Intersegment consolidation eliminations |
Consolidated total |
Discontinued activies of Electricity trading |
Consolidated total |
|---|---|---|---|---|---|---|---|---|
| 30th June 2022* | ||||||||
| Continuing operations | ||||||||
| Revenue | ||||||||
| Sales of products and services | 24.268 | 122.359 | 3.080 | 6.143 | − | 155.850 | 155.850 | |
| Intersegment revenue | 68.157 | − | − | − | (68.157) | − | − | − |
| Total revenue from continuing operations | 92.425 | 122.359 | 3.080 | 6.143 | (68.157) | 155.850 | − | 155.850 |
| Cost of sales | (83.511) | (47.667) | (2.865) | (5.193) | 64.014 | (75.222) | (75.222) | |
| Gross profit from continuing operations | 8.914 | 74.692 | 215 | 950 | (4.143) | 80.628 | − | 80.628 |
| Administrative and distribution expenses | (296) | (25.693) | (229) | (231) | 6 | (26.443) | (26.443) | |
| Research and development expenses | (113) | (3.519) | − | − | − | (3.632) | − | (3.632) |
| Other income/(expenses) and other gain/(losses)-ΕΒΙΤ determinants | 523 | 8.013 | 13 | − | (10) | 8.539 | − | 8.539 |
| Operating results (EBIT) from continuing operations | 9.028 | 53.493 | (1) | 719 | (4.147) | 59.092 | − | 59.092 |
| Other income/(expenses) and other gain/(losses)- non-ΕΒΙΤ determinants |
− | 927 | − | − | − | 927 | − | 927 |
| Operating results from continuing operations | 9.028 | 54.420 | (1) | 719 | (4.147) | 60.019 | − | 60.019 |
| Financial income | 617 | 293 | 912 | 1.918 | − | 3.740 | − | 3.740 |
| Financial expenses | (72) | (17.840) | (1.819) | (276) | 63 | (19.944) | (19.944) | |
| Gains/(Losses) from financial instruments measured at fair value | − | 210 | − | − | − | 210 | − | 210 |
| profit before tax from continuing operations | 9.573 | 37.083 | (908) | 2.361 | (4.084) | 44.025 | − | 44.025 |
| Income tax expense | (1.103) | (12.022) | 270 | (493) | − | (13.348) | − | (13.348) |
| Net profit for the year from continuing operations | 8.470 | 25.061 | (638) | 1.868 | (4.084) | 30.677 | − | 30.677 |
| Depreciation | (96) | (24.402) | (70) | (7) | 555 | (24.020) | − | (24.020) |
| Grants' amortisation | − | 2.685 | − | − | − | 2.685 | − | 2.685 |
(Amounts in thousands of Euros unless mentioned otherwise)
| Operating segments | Construction | Electricity from RES | Waste management | E-Ticket | Intersegmen t consolidatio n eliminations |
Consolidated total |
Discontinued activies of Electricity trading |
Consolidated total |
|---|---|---|---|---|---|---|---|---|
| Discontinued operations | ||||||||
| Revenue and other income from discontinued operations | − | − | − | − | − | (120.891) | (120.891) | |
| Net profit for the year from discontinued operations | − | − | − | − | − | − | 4.664 | 4.664 |
| Net profit for the year from continuing and discontinuing | 8.470 | 25.061 | (638) | 1.868 | (4.084) | 30.677 | 4.664 | 35.341 |
*The comparative figures of the Group's and the Company's results for the financial year 2022 have been revised in order to include only continuing operations, as a consequence of the recognition of the discontinued operations of the Company's segment (see. Notes 7.1 and 7.2 of the Annual Financial Statements on 31 December 2022), in accordance with the requirements of IFRS 5 "Non-current assets held for sale and discontinued operations".
| Operating segments | Construction | Electricity from RES |
Waste management |
E-Ticket | Intersegment consolidation eliminations |
Consolidated total |
Discontinued activies of Electricity trading |
Consolidated total |
|---|---|---|---|---|---|---|---|---|
| 31st December 2022 | ||||||||
| Segment assets (except of investments) | 44.855 | 1.865.487 | 101.915 | 33.752 | (59.998) | 1.986.011 | 45.207 | 2.031.218 |
| Investment in associates and joint ventures | − | 4.198 | − | − | − | 4.198 | − | 4.198 |
| Total assets | 44.855 | 1.869.685 | 101.915 | 33.752 | (59.998) | 1.990.209 | 45.207 | 2.035.416 |
| Segment liabilities | 26.931 | 1.398.300 | 82.320 | 20.066 | − | 1.527.617 | 16.623 | 1.544.240 |
| Long‐term loans Short‐term loans |
− − |
865.793 60.632 |
73.633 − |
11.900 − |
− − |
951.326 60.632 |
− − |
951.326 60.632 |
| Long‐term liabilities carried forward | − | 104.381 | 3.184 | 3.536 | − | 111.101 | − | 111.101 |
| Cash and cash equivalents | − | (359.204) | (21.765) | (7.667) | − | (388.636) | − | (388.636) |
| Restricted cash | − | (63.379) | (1.320) | (399) | − | (65.098) | − | (65.098) |
| Net debt/(surplus) | − | 608.223 | 53.732 | 7.370 | − | 669.325 | − | 669.325 |
| Lease liabilities | 9.116 | 17.905 | − | 5 | − | 27.026 | − | 27.026 |
| Capital expenditures for the year | 3 | 253.602 | 458 | − | (13.706) | 240.357 | 1 | 240.358 |
(Amounts in thousands of Euros unless mentioned otherwise)
| Geographical segments (continuing operations) | Greece | Eastern Europe |
USA | Consolidated total |
|---|---|---|---|---|
| 30/06/2023 | ||||
| Revenue | 130.423 | 15.217 | − | 145.640 |
| Non-current assets | 1.398.988 | 100.635 | 1.073 | 1.500.696 |
| Capital expenditures | 125.634 | − | − | 125.634 |
| 30/06/2022* | ||||
| Revenue | 137.167 | 17.985 | 698 | 155.850 |
| 31/12/2022* | ||||
| Non-current assets | 1.284.356 | 99.936 | 2.512 | 1.386.804 |
| Capital expenditures | 239.698 | − | 660 | 240.358 |
*The comparative figures of the Group's and the Company's results for the financial year 2022 have been revised in order to include only continuing operations, as a consequence of the recognition of the discontinued operations of the Company's segment (see. Notes 7.1 and 7.2 of the Annual Financial Statements on 31 December 2022), in accordance with the requirements of IFRS 5 "Non-current assets held for sale and discontinued operations".
The turnover in the energy segment, from continuing activities, due to its nature, depends on the legislative framework, which is locally in effect regarding the energy administrators, in both the domestic market and in Bulgaria, Poland.
During the period 01/01/2023 - 30/06/2023, an amount of € 72,8million (50,0%) 2022: € 70,4 million (45,2%) of the turnover from continuing activities of the Group derived from a single external customer (Customer A) active in the electricity sector.
The condensed statement of intangible assets of the Group and the Company is as follows:
| GROUP | COMPANY | |||
|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | |
| Net book value 1st of January | 60.473 | 50.909 | 2.872 | 2.857 |
| Additions | 436 | 208 | 119 | 208 |
| Disposals/Write offs | − | (74) | − | − |
| Impairment | (1.275) | − | (25) | − |
| Increase/(Decrease) with offsetting liabilities | (498) | − | − | − |
| Amortisation | (751) | (729) | (258) | (241) |
| Change due to take over of subsidiary | 6.278 | 6.473 | − | − |
| Foreign exchange differences | 3 | (1) | − | − |
| Net book value 30st of June | 64.666 | 56.786 | 2.708 | 2.824 |
The Group's intangible assets mainly include production, installation, and operation licenses for energy plants as well as rights of intervention and use of forested land, where the Wind Farms are installed, valued at € 63.531 thousand (30/06/2022: € 55,432 thousand). The account "Change due to acquisition of a new company" in the first half of 2023 mainly includes production licenses for the installation of new RES plants amounting to € 5.822 thousand as a result of the acquisition of the subsidiary Terna Energy Sappon PC (see in detail Note 4.3).
The "Impairment" account includes impairments of intangible assets relating to under development plants that management has decided not to implement as in the context with its strategic planning.
The condensed statement of the Group's and the Company's rights of use of fixed assets has the following table:
| GROUP | COMPANY | |||
|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | |
| Net book value 1st of January | 27.057 | 19.535 | 19.570 | 12.158 |
| Additions and changes due to modification of existing contracts | 3.092 | 3.757 | 2.295 | 3.699 |
| Depreciation | (746) | (627) | (582) | (464) |
| Depreciation capitalized in Assets | (219) | (78) | − | |
| Foreign exchange differences | 140 | (48) | − | − |
| Net book value 30st of June | 29.324 | 22.539 | 21.283 | 15.393 |
The amortization of the Group's rights of use for the period 01/01 - 30/06/2023 has been recorded in Cost of sales by € 310 thousand (€ 284 thousand in the period 01/01 - 30/06/2022), in administrative expenses and disposal costs by € 305 thousand. (€ 274 thousand in the period 01/01 - 30/06/2022), to Research and development expenses by € 130 thousand (€ 68 thousand in the period 01/01 - 30/06/2022) and to Other income/(expenses) by € 1 thousand (€ 1 thousand in the period 01/01 - 30/06/2022).
Respectively, the amortization of the Company's property rights for the period 01/01 - 30/06/2022 has been recorded in Cost of sales by € 344 thousand (€ 175 thousand for the period 01/01 - 30/06/2022), in administrative and disposal costs by € 169 thousand (€ 220 thousand for the period 01/01 - 30/06/2022), and in Research and development expenses by € 67thousand (€ 67 thousand in the period 01/01 - 30/06/2022) and in Other income/(expenses) by € 1 thousand (€ 1 thousand in the period 01/01 - 30/06/2022).
The condensed statement of tangible assets of the Group and the Company is as follows:
| GROUP | COMPANY | |||
|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | |
| Net book value 1st of January | 1.169.349 | 983.391 | 63.336 | 73.645 |
| Additions | 113.024 | 116.098 | 2.259 | 2.311 |
| Borrowing cost | 10.402 | 2.958 | − | − |
| Disposals/Write offs | (2) | (873) | (2) | − |
| Increase/(Decrease) with offsetting liabilities | (1.327) | − | − | − |
| Dismatling provision | 1.773 | − | − | − |
| Impairment | (773) | − | − | − |
| Depreciation | (24.041) | (22.615) | (3.229) | (3.085) |
| Change due to take over of subsidiary | 2 | 29 | − | − |
| Foreign exchange differences | 3.706 | (1.277) | − | − |
| Net book value 30th June 2023 | 1.272.113 | 1.077.711 | 62.364 | 72.871 |
The Group's acquisitions in the first half of 2023 mainly relate to additions in the category "Fixed assets under construction" of the amount of € 96.387 thousand related to the construction of wind farms of total capacity of 327 MW in Evia, which belong to TERNA ENERGY OMALIES SA, ENERGY KAFIREOS EVOIAS SA, AIOLIKI KARISTIA EVOIAS SA as well as with the construction of the new pumped storage project that the Group is constructing in the wider area of Amfilochia Aitoloakarnania. In addition, the Group's additions for the period include an amount of € 82,197 thousand relating to prepayments to suppliers of the Company's construction business, which for the Group are classified as prepayments for the acquisition of fixed assets.
The amount of € 1.272.113thousand of the Group's property, plant and equipment account as at 30/06/2023 mainly relates to (a) "Fixed assets under construction" amounting to € 457.275 thousand for the Group and € 5.214 thousand for the Company and (b) "Technical and mechanical equipment" amounting to € 723.568 thousand for the Group and € 45.269 thousand for the Company, which includes wind turbines of Wind Farms pledged to credit institutions to secure long-term loans.
The Group and the Company, for the purpose of financing their new projects, establish a fictitious pledge on their mobile equipment as well as encumbrances (usually a mortgage lien) on real estate owned by them to secure the lenders.
Other Long-term receivables as at 30/06/2023 and 31/12/2022are analyzed as follows:
| GROUP | COMPANY | |||
|---|---|---|---|---|
| 30/06/2023 | 31/12/2022 | 30/06/2023 | 31/12/2022 | |
| Loans to subsidiaries of the Group and other related companies |
1.378 | 1.200 | 138.297 | 138.918 |
| Guarantees granted | 741 | 2.342 | 179 | 1.783 |
| Other long‐term receivables | 2.893 | 2.894 | 2.892 | 2.892 |
| Impairments | (810) | (810) | (810) | (810) |
| Long term grants receivables | 835 | 835 | − | − |
| Total | 5.037 | 6.461 | 140.558 | 142.783 |
The Company participated in bond loan issues of subsidiaries. The loans will be repaid either at their maturity date or through premature repayments and carry an interest rate within the range of 3,25%-4,00%. During the first half of 2023, loans of € 1,206 thousand were granted to subsidiaries and loans of € 1,230 thousand were repaid by subsidiaries.
The decrease in the line item "Miscellaneous guarantees granted" at the Group and Company level relates to the return of guarantees granted as a result of the discontinuation of the Trading segment's activity.
The "Long-term receivables from grants approved but not received" relates to the receivable of the Group's subsidiary Aeoliki Rachoulas Dervenochorion S.A.
The Group constructs and operates three concession contracts:
Α. Unified Automatic Fare Collection System: On 29/12/2014, a public and private partnership agreement (PPP) for the study, financing, installation, maintenance, and technical management of a Unified Automatic Fare Collection System was signed between the OASA (Athens Transport) Group and the subsidiary Company "HST SA" for the companies of the OASA Group. The total duration of the contract is 12 years and 6 months. The construction and installation were completed in 2017, and during the first half of 2017, the operation started, which is expected to last 10 years and 4 months. During the project, the company performs additional construction works on the fare collection system in the OASA line extensions.
Β. Urban Waste Treatment Plant of the Region of Epirus: On 21/07/2017 a public and private partnership agreement (PPP) was signed between the EPIRUS REGION and the subsidiary company "AEIFORIKI EPIRUS MONOPROSOPI SPECIAL PURPOSE SOCIETE ANONYME", for the implementation of the project for the "Urban Waste Treatment Plant" of the Region of Epirus. The contract is executed in two periods, the period of project and the service period and is of a duration of 27 years. The construction of the project was completed in the 1st quarter of 2019 when the start of the service period was performed.
On 27/03/2019, the project "Municipal Solid Waste Treatment Plant of Epirus Region" (hereinafter ΜΕΑ Epirus) commenced commercial operation. The project was implemented by Epirus Region and "Aeiforiki of Epirus" (a 100% subsidiary of TERNA ENERGY company), with the contribution of the Public & Private Partnerships (PPP) Special Secretariat. With Waste Treatment Plant of Epirus, an important part of the Regional Waste Management Plan (PESDA) of Epirus Region has been implemented, in compliance with the National Waste Management Plan (ESDEA) AND European legislation. The maximum annual capacity of MEA Epirus is 105,000 tn. MEA Epirus will be recycling a total of 17,000 tons of appropriate materials and will be producing 10,800 KWh/year of Green Energy, capable of covering the needs of 3,000 families, saving 12,000 tons of CO2.
C. Urban Waste Treatment Plant of Peloponnese Region: On 14/06/2018, a public and private partnership agreement was signed between the Peloponnese Region and the subsidiary company "PERIVALLONTIKI PELOPONNESE SINGLE MEMBER S.A. for the implementation of the project for the urban waste treatment plant of the Peloponnese Region for construction and operation of three (3) Waste Treatment Units (WTUs) and an equal number of (Landfills) in Arcadia, Messinia and Laconia, as well as two (2) Waste Transfer Stations (WTS) in Korinthia and Argolida. The Partnership Agreement includes study, licensing, financing, construction, insurance, operation and maintenance of the Project for the next 28 years. The construction term is 24 months, and from the 10th month after the contract enters into force, a transitional waste management plant is projected to alleviate the major problem of the Region.
In the year 2022, the Transitional Management Unit of Arcadia was put into operation, the Waste Transfer Station of Argolida and the Waste Transfer Station of Corinthia in the framework of the Public-Private Partnership (PPP) project "Integrated Waste Management of the Peloponnese Region", which is implemented by the Group company PERIVALLONTIKI PELOPONNESE SINGLE MEMBER S.A. Under the same contract, the construction of the Transitional Management Units of Messinia and Laconia and further the construction of the Waste Management Units is in progress. This project is being implemented with the main objective of providing modern waste management services aiming at protecting the environment, ensuring public health and providing multiple benefits to local communities as cells for the development of the circular economy.
Detailed information on the accounting policy followed and the concessions mentioned above is presented in Note 4.11 of the Group's Annual Financial Statements as at 31 December 2022.
The analysis of the changes of the generated Concession Financial Statements as well as the revenue per category are analyzed as follows:
| Financial Assets - Concessions | Unified Automated System for Ticket Collection |
Installation of civil waste processing Epirus Region |
Installation of civil waste processing Peloponnese Region |
Total |
|---|---|---|---|---|
| Opening balance as at 1 January 2022 | 23.428 | 17.129 | 20.796 | 61.353 |
| Increase/(decrease) in financial asset | (6.488) | (1.713) | 17.827 | 9.626 |
| Reversion of discounting | 3.549 | 1.301 | 3.089 | 7.939 |
| Recovery of impairment/(impairment) | 1 | (2) | 9 | 8 |
| Closing balance as at 31st December 2022 | 20.490 | 16.715 | 41.721 | 78.926 |
| Opening balance as at 1 January 2023 | 20.490 | 16.715 | 41.721 | 78.926 |
| Increase/(decrease) in financial asset | (3.442) | (883) | 7.110 | 2.785 |
| Reversion of discounting | 1.552 | 637 | 1.744 | 3.933 |
| Closing balance as at 30st June 2023 | 18.600 | 16.469 | 50.575 | 85.644 |
| Financial Assets - Concessions Long term | 14.695 | 15.970 | 46.514 | 77.179 |
| part Financial Assets - Concessions Short term part |
3.906 | 498 | 4.061 | 8.465 |
| Analysis of revenues per category of A' Half of 2022 |
||||
| Revenue from construction services | − | − | 23.303 | 23.303 |
| Revenue from operation services | 5.135 | 2.512 | 909 | 8.556 |
| Reversion of discounting | 1.918 | 650 | 879 | 3.447 |
| Total | 7.053 | 3.162 | 25.091 | 35.306 |
| Analysis of revenues per category of A' Half of 2023 |
||||
| Revenue from construction services | − | − | 23.162 | 23.162 |
| Revenue from operation services | 5.664 | 2.745 | 3.710 | 12.119 |
| Reversion of discounting | 1.552 | 637 | 1.744 | 3.933 |
| Total | 7.216 | 3.382 | 28.616 | 39.214 |
The decrease in trade receivables and receivables from customer contracts of € 5,745 thousand compared to the year 2022 is mainly due to the change in receivables of the Trading segment as a result of the discontinuation of the business (see Note 2.4).
The Group's and the Company's advances and other receivables as of June 30, 2023, and December 31, 2022 are as follows:
| GROUP | COMPANY | ||||
|---|---|---|---|---|---|
| 30/06/2023 | 31/12/2022 | 30/06/2023 | 31/12/2022 | ||
| Short-term part of receivables from long-term intra group loans and leases |
1 | − | 6.730 | 5.338 | |
| Restricted cash | 69.843 | 68.098 | 18.932 | 3.000 | |
| Other intra-group receivables / receivables from other related parties |
98 | 274 | 6.454 | 1.031 | |
| Other receivables | 6.310 | 7.553 | 2.683 | 6.443 | |
| Impairments | (31) | (31) | (29) | (29) | |
| Total | 76.221 | 75.894 | 34.770 | 15.783 |
| GROUP | COMPANY | |||
|---|---|---|---|---|
| 30/06/2023 | 31/12/2022 | 30/06/2023 | 31/12/2022 | |
| Prepayments to suppliers | 5.979 | 6.042 | 7.489 | 9.761 |
| Prepayments to social security funds | 435 | 353 | 382 | 306 |
| VAT for return-offsetting | 30.437 | 36.021 | 2.075 | 37 |
| Receivables from other taxes other than income tax | 93 | 88 | − | − |
| Prepaid expenses and other transitory asset accounts | 20.409 | 12.720 | 16.953 | 10.650 |
| Receivables from grants | 627 | 627 | − | − |
| Total | 57.980 | 55.851 | 26.899 | 20.754 |
| Total prepayments and other receivables | 134.201 | 131.745 | 61.669 | 36.537 |
On 30/06/2023, the line item "Short-term part of receivables from long-term intra-group loans and leases" of the Company, relates to the current portion of receivables from long-term intercompany loans granted to subsidiaries.
On 30/06/2023, the item "Other intragroup receivables / receivables from other related parties" of the Company, included amounts of € 5.384 thousand that relate to approved dividends of subsidiaries, which, until the date of approval of the attached financial statements, had not been collected (Note 24).
The increase in the "Committed deposits" account of the Company relates to the required commitment set out in the terms of the Bond Loan of TERNA ENERGY FINANCE SPSA, according to which distributions by the parent company to its shareholders are effected after the granting of guarantees to the subsidiary TERNA ENERGY FINANCE SPSA. These commitments are subsequently replaced by bank letters of guarantee, thus converting these amounts into cash.
The variation in the account "VAT refundable - offset" is mainly due to the VAT (refundable or offset) resulting from the construction of new projects of the Group's subsidiaries.
The increase in the account "Prepaid expenses and other transitional asset accounts" of both the Group and the Company is mainly due to prepayments related to the construction of the PPP project "Integrated Waste Management of the Peloponnese Region".
The cash and cash equivalents of the Group and the Company as of June 30 th , 2023 and December 31st , 2022 are analyzed as follows:
| GROUP | ENTITY | |||
|---|---|---|---|---|
| 30/06/2023 | 31/12/2022 | 30/06/2023 | 31/12/2022 | |
| Cash in hand | 6 | 7 | − | − |
| Sight deposits | 326.329 | 391.889 | 99.105 | 110.917 |
| Time deposits | 22 | − | − | − |
| Total | 326.357 | 391.896 | 99.105 | 110.917 |
The Group's cash and cash equivalents include amounts for return, of € 3.000 thousand (2022: € 3.260 thousand) which relate to grants received from subsidiaries, due to cancellation of construction or expiration of the time limits set by the decisions of inclusion of certain Wind Parks. The above amount of the grant to be returned had not been reimbursed until the date of approval of the attached financial statements, as the relevant audit by the competent services had not been completed.
In addition, on 30/06/2023 the Group and the Company possessed restricted deposits amounting to € 69.843 thousand and € 18.932 thousand respectively (31/12/2022: € 68.098 thousand for the Group and € 3.000 thousand for the Company), which were maintained in specific bank accounts to service their short-term operating and financial liabilities. Those restricted cash deposits were classified under "Prepayments and other receivables" (Note 11).
Of the above restricted cash deposits, those who are directly related to the bank borrowings, amounted on 30/06/2023 to € 69,843 thousand for the Group and € 18,932 thousand for the Company.
The analysis of changes in the aforementioned loan liabilities of the Group and the Company as of June 30th , 2023, and 2022, is presented below as follows:
| GROUP | COMPANY | |||
|---|---|---|---|---|
| Long‐term loans | 30/06/2023 | 30/06/2022 | 30/06/2023 | 30/06/2022 |
| Opening balance | 951.326 | 872.144 | 388.408 | 389.790 |
| New loans | 171.098 | 133.100 | 6.800 | 10.164 |
| Loan repayment | (4.758) | (8.066) | (7.300) | (8.700) |
| Capitalization of interest | 3.311 | 3.189 | 535 | 498 |
| Transfer between long-term and short-term loan liabilities |
(117.466) | (44.992) | (23.596) | (5.905) |
| Foreign exchange differences | 651 | (398) | − | − |
| Closing balance (a) | 1.004.162 | 954.977 | 364.847 | 385.847 |
| Long‐term liabilities carried forward | ||||
| Opening balance | 111.101 | 70.966 | 14.086 | 14.318 |
| Loan repayment | (69.609) | (34.623) | (5.905) | (6.103) |
| Capitalization of interest | 636 | (21) | 3.529 | 2.698 |
| Transfer between long-term and short-term loan liabilities |
117.466 | 44.992 | 23.596 | 5.905 |
| Foreign exchange differences | 148 | (58) | − | − |
| Closing balance (b) | 159.742 | 81.256 | 35.306 | 16.818 |
| Short‐term loans | ||||
|---|---|---|---|---|
| Opening balance | 60.632 | 40.425 | 60.632 | 40.425 |
| Loan repayment | (60.000) | − | (60.000) | − |
| Capitalization of interest | (415) | (2) | (415) | (2) |
| Closing balance (c) | 217 | 40.423 | 217 | 40.423 |
| Total loans (a) +(b) +(c) | 1.164.121 | 1.076.656 | 400.370 | 443.088 |
The Group's long-term loans are related to the financing of its activities and mainly concern the financing of the construction and operation of renewable energy facilities and waste management facilities. The Group's short-term loans relate to bank loans of regular maturity and are renewed according to necessity. The amounts drawn are mostly used to satisfy the liquidity needs in the construction period of the wind farms of the Group's energy business.
All loans are recognized at amortized cost. The Group estimates that the fair value of these loans does not differ significantly from their accounting value.
For the purpose of guaranteeing all the Group's loans, wind turbines of the wind farms, cash, insurance policies and receivables from the sale of electricity to ENEX, DAPEP or HEDNO and securities (i.e. bonds of subsidiaries owned by the parent company and shares of subsidiaries) are pledged as collateral for all the Group's loans. In the context of this type of financing, the Group of companies maintain several blocked bank accounts in order to support these liabilities. The collateral provided covers the amount of the Group's debt obligations.
On 30/06/2023, the total borrowings include amounts of subordinated loans (non-recourse debt to the parent company) of € 858.732 thousand, while the amounts of loans with the right of recourse to the parent company (recourse debt) amount to € 305.388 thousand. The loans guaranteed by the parent company include the common bond loan of TERNA ENERGY FINANCE SPSA issued in 2019, with a total unamortized value on June 3 th , 2023 of € 148.805 thousand
Regarding the Group's long-term borrowings totaling € 1.163.903 thousand liabilities plus long-term liabilities payable in the following year): (a) in Greece it consists in Euro standing 98,60% of the total, (b) in Poland ‐ in PLN 1,30% of the total and (c) in Bulgaria ‐ in EUR 0,10% of the total. Of the total Group long term debt, as reported at the end of the fiscal year, 16,50%, are at a fixed interest rate, 61,40%, are floating‐rate loans that have been hedged with future fixed rate payments against floating rate receipts, while 22,20% % are in floating rate loans on a case-by-case basis euribor or wibor.
The weighted average interest rate on the Group's long-term loans for the periods ended on 30/06/2023 and 30/06/2022 is 4,00% and 3,12% respectively. The weighted average interest rate for short-term loans was 5,00% and 3,35% for the periods ended on 30/06/2023 and 30/06/2022 respectively.
The total interest of the above loans for the periods ended on 30/06/2023 and 30/06/2022 regarding the Group amounted to € 21.176 thousand and € 17.110 thousand respectively, and for the Company amounted to € 8.895 thousand and € 8.192 thousand respectively (see Note 22).
The Company's long-term loans also include the loans received by its subsidiaries, amounted to € 325.965 thousand on June 30 th, 2023.
Significant changes in loan liabilities of the Group and the Company for the annual period ended on 30/06/2023 are presented below.
The Group's new borrowings taken up during the first half of 2023 were principally used to finance investments in wind farms of subsidiaries, specifically:
For the wind farm "Aidoni" of the subsidiary company AIOLIKI KARISTIAS EVOIAS S.A., a bond loan with a nominal value of € 19,570 thousand was raised, based on the loan agreement signed in 2022. This contract expires in 2040. The interest rate was determined at 6-month Euribor plus margin.
For the wind farms "Milia", "Muriza - Petra Megali - Vranouli", "Tsouka-Mandriyara", "Tsouka-Skoura", "Dugza-Antias" and "Vios-Kalamaki-Bathriza" of the subsidiary ENERGEIAKI KAFIREOS S.A., a bond loan with a nominal value of € 117,734 thousand was raised, based on the loan agreement signed in 2022. This contract expires in 2040. The interest rate was determined at 6-month Euribor plus margin.
For the wind farms "OMALIES I", "OMALIES II", "KORAKOVRACHOS I", "KORAKOVRACHOS II", "DEXAMENES II", "MILZA", "PRARO", "MOLIZZA", "KALAMAKI I" and "KALAMAKI II" of the subsidiary ENERGEIAKI OMALIES M.A.E., a bond loan with a nominal value of € 29,768 thousand was raised, based on the loan agreement signed in 2022. This contract expires in 2040. The interest rate was determined at 6-month Euribor plus margin.
A bond loan with a nominal value of € 4,025 thousand was raised for the financing needs of the subsidiary company PERIVALONITIKI PELOPONISOU S.A. in the context of the implementation of the construction of the municipal waste treatment facilities of the Peloponnese Region. The contract expires in 2041. The interest rate was set at Euribor 6 months plus margin.
The Group has the obligation to maintain specific financial ratios related to bond loans. As at 30 June 2023, the Group was in full compliance with the required limits of the financial ratios, in accordance with the requirements of its loan agreements, except for a loan with an amortized amount of €24,267 thousand which was reclassified to the Company's and the Group's current liabilities and specifically to the line item "Longterm liabilities payable in the next financial year" since as at 30 June 2023 the financial ratios of the specific loan agreement were not being complied with. It is noted that by the date of publication of the Financial Statements the reasons for non-compliance have been resolved.
The changes in lease liabilities as of June 30th , 2023 and 2022 are presented below as follows:
| GROUP | COMPANY | |||
|---|---|---|---|---|
| 30/06/2023 | 30/06/2022 | 30/06/2023 | 30/06/2022 | |
| Opening balance | 27.026 | 19.853 | 19.554 | 12.477 |
| Additions and changes due to modification of existing | ||||
| contract | 2.772 | 3.629 | 1.975 | 3.578 |
| Repayments under lease agreements | (1.333) | (1.219) | (911) | (766) |
| Financial cost for the year | 447 | 441 | 404 | 290 |
| Interest capitalised on assets | 166 | 63 | − | − |
| Foreign exchange differences | 158 | (55) | − | − |
| Closing balance | 29.236 | 22.712 | 21.022 | 15.579 |
For the period 01/01/2023 - 30/06/2023the Group and the Company recognized rental expenses from shortterm leases of € 389 thousand and € 677 thousand, respectively, while no leases of low values assets are effective.
The Group and the Company financial derivatives as at 30/06/2023 and 31/12/2022 are analyzed as follows:
| GROUP | COMPANY | ||||
|---|---|---|---|---|---|
| Liabilities from derivatives | Note | 30/06/2023 | 31/12/2022 | 30/06/2023 | 31/12/2022 |
| - Cash flow hedging | |||||
| Interest Rate Swaps | 15.1 | 9.133 | 6.849 | − | − |
| Fixed for floating swap contracts | 15.2.1 | 6.241 | 13.515 | 6.241 | 13.515 |
| Total liabilities from derivatives | 15.374 | 20.364 | 6.241 | 13.515 | |
| Long-term liabilities from derivatives | 8.328 | 14.596 | 1.250 | 7.845 | |
| Short-term liabilities from derivatives | 7.046 | 5.768 | 4.991 | 5.670 | |
| GROUP | ENTITY | ||||
| Receivables from derivatives | Note | 30/06/2023 | 31/12/2022 | 30/06/2023 | 31/12/2022 |
| - Cash flow hedging | |||||
| Interest Rate Swaps | 15.1 | 30.030 | 34.517 | 1.260 | 1.111 |
| Total receivables from derivatives | 30.030 | 34.517 | 1.260 | 1.111 | |
| Long-term receivables from derivatives | 23.758 | 26.544 | 771 | 935 | |
| Short-term receivables from derivatives | 6.272 | 7.973 | 489 | 176 |
The aforementioned financial instruments are measured at their fair value (see Note 25).
Within the interim period ended 30 June 2023, a total loss of € 270 thousand was recognized in the results of the year from changes in fair value, which is included in the item "Losses from financial instruments valued at fair value". The total changes in fair value recognized in other comprehensive income amounted to a loss of € 777 thousand (2022: profit of € 11.531 thousand).
In order to manage the interest rate risk, it is exposed to, the Group has entered into forward interest rate swaps.
The objective of interest rate swaps is to offset the risk of adverse cash flows of future cash flows arising from interest on loan contracts entered into as a result of activities, in particular the electricity generation sector. Specifically, interest rate swaps relate to contracts whereby the variable interest rate on the loan is converted to fixed over the entire term of the loan, so that the Group is protected against any increase in interest rates. The fair value of these contracts was estimated by displaying the effective interest rate (euribor) curve as of 30/06/2023, throughout the time horizon of such contracts.
The fair value of these contracts as of 30/06/2023 amounted to a total net liability of € 20.897 with the total nominal value of the contracts amounting to € 575.770 thousand for Greece and Bulgaria). As of 30/06/2023, these derivatives met the requirements for cash flow hedging, in accordance with the provisions of IFRS 9 and from their measurement at fair values a profit of € (6.767) thousand (2022: loss € 20.942 thousand) was recognized in the item "Cash flow hedging" in the other comprehensive income statement. These financial liabilities are classified in the fair value hierarchy at level 2 (see Note 25).
In year 2021, HERON ENERGY (ENERGIAKI) SA, in collaboration with TERNA ENERGY Group presented in the Greek market the plan "HERON EN.A", through which the TERNA ENERGY Group has agreed to sell the production of Renewable Energy Sources (RES) to HERON for 25 years. In addition, on 20/09/2021, HERON ENERGY SA, in collaboration with TERNA ENERGY Group presented to the Greek market the plan "HERON EN.A BUSINESS", through which the TERNA ENERGY Group has agreed to sell the production of Renewable Energy Sources (RES) to HERON for 20 years. TERNA ENERGY Group, based on these agreements, will receive fixed cash flows from the EN.A plan, while it will pay the floating cash flows (Proxy Market Revenues) to HERON (fixed for floating swap contract).
The fair value of this derivative on 30/06/2023 amounted to a total liability of € 6.241 thousand. On 31/12/2023, this derivative met the requirements for cash flow hedging, in accordance with the provisions of IFRS 9 and from its measurement at fair value a loss of € 7.544 thousand was recognized in the item "Cash flow hedging" in the other comprehensive income. For the effective part of the valuation while for the ineffective part of the valuation there was a valuation loss of € 270 thousand. This financial liability has been classified in the fair value hierarchy at level 3 (see Note 25).
The condensed movement of the Group's and the Company's other provisions for the six-month period ended June 30, 2023 June 30, 2022 , respectively, was as follows:
| Other provisions - Long term part | GROUP | COMPANY | |||
|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | ||
| Balance 1st January | 19.416 | 18.071 | 4.741 | 4.954 | |
| Provision recognized in the income statement | 590 | 431 | 117 | 111 | |
| Provision recognized in tangible assets | 1.773 | − | − | − | |
| Provisions used | − | (169) | − | (169) | |
| Foreign exchange differences | 139 | (49) | − | − | |
| Balance 30st June | 21.918 | 18.284 | 4.858 | 4.896 |
The aforementioned provisions of the Group and the Company are presented entirely as long-term provisions, except for provisions for loss-making construction projects, the short-term part of which is included in "Accrued and other current liabilities" (see Note 18).
All other provisions, with the exception of the provision for landscape restoration, are not shown at discounted amounts as there is no precise estimate of when they will be paid.
The companies of the Group's energy sector are under obligation to proceed with environmental rehabilitation in locations, where they have installed electricity production units following the completion of the operations based on the effective licenses granted by the states where the installations are being implemented. The above provision for the Group amounts to € 21.022 thousand (30/06/2022: € 17.123 thousand) and for the Company in € 4.098 thousand (30/06/2022 € 3,870 thousand) reflects the expenses required for the removal of equipment and restoration of the area in which the equipment used to be installed, applying available technology and materials.
The remaining amount of provisions relates to provisions for pending legal cases and potential tax audit litigation (Note 20).
A condensed summary of the Group's and the Company's grants as at 30/06/2023 and 30/06/2022 was as follows:
| GROUP | COMPANY | |||
|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | |
| Balance 1st January | 167.146 | 76.736 | 11.257 | 16.398 |
| Amortisation recognized in the Income Statement | (2.676) | (2.685) | (630) | (629) |
| Foreign exchange differences | 173 | (71) | − | − |
| Balance 30st June | 164.643 | 73.980 | 10.627 | 15.769 |
Grants relate to government grants for the development of Wind Farms and are amortized in the Statement of Total Income for the period they refer to, according to the depreciation rate of granted fixed assets. The above grants are being amortized in the revenue side only to the extent which corresponds to any fully completed and operating wind farms.
"Grants" include grants approved but not received, totalling € 835 thousand, which were classified under "Other long-term receivables" (see Note 9). These grants are related to the receivable of the Group's subsidiary Aeoliki Rahoulas Dervenochoria S.A.
In August 2022, the Group's subsidiary TERNA ENERGY - ANTLESIOTOMEISI I M.A.E. received the first instalment of € 100 million of investment aid through the Public Investment Programme for the project "Subproject 1. Pumping Station of Western Greece (Amphilochia), 680MW capacity" which has been included in the Recovery and Resilience Fund.
The Group's and the Company's trade payables as at 30/06/2023 and 31/12/2022 are as follows:
| GROUP | COMPANY | |||
|---|---|---|---|---|
| 30/06/2023 | 31/12/2022 | 30/06/2023 | 31/12/2022 | |
| Suppliers | 57.200 | 75.084 | 43.272 | 63.068 |
| Total | 57.200 | 75.084 | 43.272 | 63.068 |
Liabilities to suppliers mainly relate to liabilities related to the construction and operation of renewable wind and hydroelectric energy facilities, photovoltaic parks, as well as other Renewable Energy Sources (RES). The fluctuations in the Group's and the Company's trade payables for the six months ended 30/06/2023 were mainly attributed to the Group's construction activity and more specifically the construction of wind farms in the South Evia region.
Accrued and other current liabilities of the Group and the Company as at 30/06/2023 and 31/12/2022are as follows:
| GROUP | COMPANY | |||||
|---|---|---|---|---|---|---|
| 30/06/202 | 31/12/202 | 30/06/202 | 31/12/202 | |||
| Accrued and other short-term financial liabilities | 3 | 2 | 3 | 2 | ||
| Liabilities from dividends payable and return of capital | 45.849 | 495 | 44.849 | 245 | ||
| Other liabilities to related parties | 960 | 523 | 941 | 503 | ||
| Employee fees due | 566 | 525 | 504 | 478 | ||
| Accrued expenses | 1.911 | 5.021 | 887 | 2.007 | ||
| Short term liabilities from entities aqcusitions | 23.231 | 11.028 | 23.231 | 11.028 | ||
| Sundry creditors | 571 | 724 | 461 | 366 | ||
| Total | 73.088 | 18.316 | 70.873 | 14.627 | ||
| GROUP | COMPANY | |||||
| 30/06/202 | 31/12/202 | 30/06/202 | 31/12/202 | |||
| Other short-term non‐financial liabilities | 3 | 2 | 3 | 2 | ||
| Liabilities from taxes-duties other than income tax | 5.550 | 8.801 | 793 | 5.006 | ||
| Social security funds | 484 | 651 | 391 | 534 | ||
| Grants to be returned (see Note 17) | 3.000 | 3.260 | − | − | ||
| Provisions for loss-bearing construction contracts | 657 | 2.430 | 657 | 2.430 | ||
| Total | 9.691 | 15.142 | 1.841 | 7.970 |
The item "Dividend payable and return of capital" includes an amount of € 44,604 thousand which relates to dividend payable in accordance with the decision of the Annual General Meeting of Shareholders of the parent company dated 14 June 2023.
As of 30/06/2023, the share capital of the Company amounts to € 35.431.527,00 divided into 118.105.090 common shares with voting rights, with a nominal value of € 0,30 each. The difference in favour of the Company as at 30/06/2023 amounts to € 209,195 thousand.
According to the decision of the Board of Directors of the Company dated January 18, 2023, pursuant to the resolution of the Extraordinary General Meeting of Shareholders of December 16, 2020, the Company's share capital was increased by the amount of Euro Three Hundred and Sixty Thousand (€ 360. 000,00) by issuing one million two hundred thousand (1,200,000) new common voting registered shares with a nominal value of thirty cents (€ 0.30) each, by capitalizing reserves from the issuance of shares in excess of par value.
According to the decision of the Board of Directors of the Company dated 24 May 2023, pursuant to the resolution of the Extraordinary General Meeting of Shareholders of 16 December 2020, the Company's share capital was increased by the amount of Euro Three Hundred and Fifteen Thousand (€ 315. 000,00) by issuing one million fifty thousand (1,050,000) new common shares with voting rights, with a nominal value of thirty cents (€ 0.30) each, by capitalizing reserves from the issuance of bonus shares.
On 14/06/2023, the Annual General Meeting decided the distribution of profits and reserves in the total amount of EUR 44,604,209.65, i.e. € 0.38 per share, in accordance with article 162 par. 3 of the Law. 4548/2018. This amount is subject to 5% withholding tax, in accordance with article 24 of Law no. 4646/2019 and therefore the shareholders will receive a total net amount of EUR 42,373,999.17, i.e. a net amount of EUR 0,3587821589 per share. This amount will be increased by the dividend corresponding to the 653,046 treasury shares held by the Company. On July 3, 2023, the shareholders received a total amount of EUR 0.3797652908 per share, i.e. a total net amount of EUR 0.3607770263 per share.
Basic earnings per share as reported in the Statement of Comprehensive Income in the Interim Condensed Consolidated Financial Statements as of June 30, 2023 were calculated using the weighted average number of ordinary shares, minus the weighted average number of treasury shares. No adjustment is made to earnings (numerator). Lastly, there are no diluted earnings per share for the Group and the Company for the six-month period ended 30 June 2023 and the corresponding comparative six-month period.
The Company's reserves include Statutory Reserve, Treasury Share Reserve, Foreign Exchange Reserve, Hedging Reserve, Actuarial Gains/(Losses) Reserve, Development and Tax Act Reserve and Free Share Plan Reserve. In the Statement of Changes in Equity of the Interim Condensed Consolidated Financial Statements as at 30 June 2023, there is a transfer from the line item Reserves to the line item Retained earnings of €46,800 thousand relating to the distribution of reserves from the Company's free share plan.
The Extraordinary General Meeting of 16.12.2020 of TERNA ENERGY SA approved the distribution of up to two million five hundred thousand (2.500.000) new shares to be issued with capitalization of reserves from the issue of premium shares to Executive Members of the Board of Directors and senior executives of the Company due to their contribution to the achievement of financial goals, in the implementation of new projects as well as in increasing the profitability of the Company within the three-year period 01.01.2021- 31.12.2023. The Board of Directors was further authorized to determine the beneficiaries, the way of exercising the right and the conditions of the program, as well as the regulation of all relevant procedural issues for the implementation of the decision.
The Board of Directors of the Company at its meeting of 19.03.2021, in implementation of the above decision of the Extraordinary General Meeting of Shareholders, accepted the recommendation of the Nominations and Remuneration Committee regarding the Revision of the Remuneration Policy, the Review of the Program Implementation Period (extension of the Program by one year, i.e. ending on 31.12.2024 – the extension of the duration of the program, in combination with its inclusion in the Remuneration Policy was approved by the Regular General Meeting of the Company's Shareholders on 23.06.2021), the conditions for the implementation of the Program, as well as the Criteria - Objectives of the Program (refer to the fulfillment of performance conditions not related to the market - e.g. project construction objectives, EBITDA, etc.), as well as regarding the Distribution of the shares per Criterion – Objective. At the same meeting, the Board of Directors reserved to decide further on the selection criteria of the beneficiaries, the distribution of the shares to the beneficiaries and on the vesting criteria per beneficiary at a new meeting after a new relevant proposal from the Nominations and Remuneration Committee.
At the meeting of January 26, 2022, the Board of Directors proceeded with the selection of the beneficiaries of the Share based payments programs as well as the allocation percentages in accordance with the recommendation of the Nominations and Remuneration Committee.
The Board of Directors of "TERNA ENERGY", by its resolutions of 18/01/2023 and 24/5/2023, approved the increase of the Company's Share Capital by the amount of Euro Six Hundred and Seventy-Five Thousand (€ 675.000,00) through the issuance of Two Million Two Hundred and Fifty Thousand (2.250. 000) of new ordinary registered shares with voting rights, with a nominal value of thirty-euro cents (€0.30) each, with capitalization of share premium reserves and their free distribution to Executive Members of the Board of Directors and senior management of the Company, in accordance with the approved Share Distribution Plan. This decision is related to the achievement of targets representing 90% of the total number of shares included in the Share Distribution Plan. The results shown in the Statement of Comprehensive Income, for the sixmonth period ended June 30, 2023, were charged with the amount of € 448 thousand in related with the implementation of the aforementioned program.
The tax rate for legal entities in Greece for fiscal years 2023 and 2022 is 22%.
The effective final tax rate differs from the nominal tax rate. There are several factors that affect the effective tax rate, the most important of which are the non-tax deductibility of certain expenses, the differences in depreciation rates arising between the useful life of the asset and the rates set by Law 4172/2013 and the ability of companies to form tax-free deductions and tax-free reserves.
Income tax expense is recorded based on management's best estimate of the weighted average annual tax rate for a full year. The weighted average tax rate for the six-month period ended June 30, 2023, for the Group was 22.54% and for the Company was 4.80%. The reduced tax rate for the Company resulted primarily due to income from dividends from subsidiaries that are exempt from income tax. In the corresponding comparative period of 2022, the tax rate for the Group was 30.32% and for the Company was 1.80%.
Income tax returns are submitted on an annual basis, but the profits or losses declared remain provisional until the tax authorities audit the taxpayer's financial books and records, and a final audit report is issued. Subsequent to the date of the attached half-yearly financial report, the Company was notified of the partial tax audit report for fiscal years 2017 and 2018 from the Tax Authority. The total impact on the Company's and the Group's 2023 results from the audit of fiscal years 2017 and 2018 amounts to € 84 thousand.
The Group annually assesses the contingent liabilities expected to arise from the audit of past years, with provisions being made where necessary. The Group has recognised provisions for unaudited tax years of €560 thousand and management believes that, in addition to the provisions recognised, any tax amounts likely to arise will not have a significant impact on the Group's and the Company's equity, results and cash flows. Information on unaudited tax years is set out in Notes 4 and 27 to the Interim Financial Statements.
The analysis of the other income / (expense) amount as of June 30, 2023, and 2022, respectively, is presented in the table below:
| GROUP | COMPANY | ||||
|---|---|---|---|---|---|
| Other income | 01/01 - 30/06/2023 |
01/01 - 30/06/2022* |
01/01 - 30/06/2023 |
01/01 - 30/06/2022* |
|
| Income from sale of waste material | 26 | 32 | 3 | 185 | |
| Income from leases | 14 | 14 | 181 | 35 | |
| Income from transfer of expenses | 1.029 | 19 | 6.977 | 3.693 | |
| Income from insurance indemnities | 4.524 | 3.952 | 2.213 | 211 | |
| Income from legal damages | 1.505 | 2.193 | − | 491 | |
| Grants amortisation (see Note 17) | 2.676 | 2.685 | 629 | 629 | |
| Other income | 272 | 94 | 117 | 5 | |
| Foreign exchange differences (credit) | 881 | 928 | 5 | − | |
| Total other income from continuing operations | 10.927 | 9.917 | 10.125 | 5.249 | |
| Total other income | 10.927 | 9.917 | 10.125 | 5.249 |
*The comparative figures of the Group's and the Company's results for the financial year 2022 have been revised in order to include only continuing operations, as a consequence of the recognition of the discontinued operations of the Company's segment (see. Notes 7.1 and 7.2 of the Annual Financial Statements on 31 December 2022), in accordance with the requirements of IFRS 5 "Non-current assets held for sale and discontinued operations".
In the account "Insurance claims income" at the corporate level the increase is attributable to compensation for reinstatement costs and loss of profit as a consequence of mechanical damage. In the half-yearly financial statements as of 30 June 2023, in the account "Income from legal indemnities" at Group level, the amount of € 1,505 thousand has been recognized based on a court decision (No. 3223/2023 decision of the Athens Court of Appeal) regarding the case between the subsidiary company AIFORIKI HEPIRIOU MAEES and the Region of Epirus, which was positively concluded for the Group.
| GROUP | COMPANY | |||
|---|---|---|---|---|
| Other expenses | 01/01 - 30/06/2023 |
01/01 - 30/06/2022* |
01/01 - 30/06/2023 |
01/01 - 30/06/2022* |
| Cost of sales and inventory consumption | (757) | − | (757) | − |
| Subcontractors fees and expenses | (104) | − | (104) | − |
| Fees for engineers, studiers, technical consultants and third parties |
(511) | − | (5.286) | (3.309) |
| Leases | (7) | − | (7) | − |
| Taxes, duties and contributions | (6) | − | (5) | − |
| Travel expenses | (15) | − | (15) | − |
| Non accounted for fixed assets depreciation | (1) | (1) | (1) | (1) |
| Insurance premiums | (6) | − | (6) | − |
| Transportation expenses | (1) | − | (1) | − |
| Legal damages and litigation costs | − | (432) | − | − |
| Other | (3) | (9) | (3) | − |
| Taxes, fees and insurance contributions of previous years and fines and surcharges related to these |
(6) | (9) | (5) | (4) |
(Amounts in thousands of Euros unless mentioned otherwise)
| Impairments/write-offs Foreign exchange differences (debit) |
(2.044) − |
(1) − |
(20) − |
− (1) |
|---|---|---|---|---|
| Total other expenses from continuing operations | (3.461) | (452) | (6.210) | (3.315) |
| Total other expenses | (3.461) | (452) | (6.210) | (3.315) |
| Total other income/(expenses) from continuing operations |
7.466 | 9.465 | 3.915 | 1.934 |
| Total other income/(expenses) | 7.466 | 9.465 | 3.915 | 1.934 |
*The comparative figures of the Group's and the Company's results for the financial year 2022 have been revised in order to include only continuing operations, as a consequence of the recognition of the discontinued operations of the Company's segment (see. Notes 7.1 and 7.2 of the Annual Financial Statements on 31 December 2022), in accordance with the requirements of IFRS 5 "Non-current assets held for sale and discontinued operations".
The account "Impairment/write-offs" includes impairments and write-offs of tangible and intangible fixed assets, related to facilities that management has decided not to implement in the context of its strategic planning.
The Company's account "Fees for engineers, consultants, technical advisors and third parties" of € (5.286) thousand includes the Company's administrative support costs for the period 01/01/2023 - 30/06/2023, which are subsequently passed on to the Group's subsidiaries. The income from the pass-through of these costs is included in the account "Income from charge-offs".
The line item "Income from equity investments and other investments" includes dividend income that the Company collects from its subsidiaries. Total dividend income as at 30/06/2023 amounts to € 33,763 thousand (30/06/2022: € 41,675 thousand) of which, as at the date of approval of the accompanying Interim Condensed Financial Statements, an amount of € 28,930 thousand has been collected.
The financial income/(expenses) of the Group and the Company as of 30 June 2023 and 2022, respectively, are analyzed as follows:
| GROUP | COMPANY | |||
|---|---|---|---|---|
| 01/01 - 30/06/2023 |
01/01 - 30/06/2022* |
01/01 - 30/06/2023 |
01/01 - 30/06/2022* |
|
| Interest on short‐term Loans | (604) | (675) | (604) | (675) |
| Interest on long‐term Loans | (20.572) | (16.435) | (8.291) | (7.517) |
| Interest on lease liability | (447) | (440) | (404) | (290) |
| Expenses from unwinding of provisions and long-term liabilities |
(920) | (663) | (447) | (344) |
| Commissions, bank charges and other expenses | (1.871) | (1.643) | (669) | (656) |
| Other financial expenses | (12) | (88) | − | − |
| Financial expenses from continuing operations | (24.426) | (19.944) | (10.415) | (9.482) |
(Amounts in thousands of Euros unless mentioned otherwise)
| Financial expenses | (24.426) | (19.944) | (10.415) | (9.482) |
|---|---|---|---|---|
| Interest from sight deposits | 454 | 259 | 10 | 1 |
| Interest income from bond and other intercompany loans |
23 | − | 2.782 | 2.684 |
| Income from unwinding of long-term receivables | 3.933 | 3.447 | − | − |
| Other financial income | 33 | 34 | − | 296 |
| Financial income from continuing operations | 4.443 | 3.740 | 2.792 | 2.981 |
| Financial income | 4.443 | 3.740 | 2.792 | 2.981 |
| Net financial results from continuing operations | (19.983) | (16.204) | (7.623) | (6.501) |
| Net financial results | (19.983) | (16.204) | (7.623) | (6.501) |
*The comparative figures of the Group's and the Company's results for the financial year 2022 have been revised in order to include only continuing operations, as a consequence of the recognition of the discontinued operations of the Company's segment (see. Notes 7.1 and 7.2 of the Annual Financial Statements on 31 December 2022), in accordance with the requirements of IFRS 5 "Non-current assets held for sale and discontinued operations".
The average headcount of full-time employees, in the first half of 2023, was 441 in the Group and 398 in the Company (407 and 340, respectively, employees in the first half of 2022).
The Company's and the Group's transactions with related parties for the period 01/01/2023- 30/06/2023 and the comparative six-month period 01/01/2022 - 30/06/2022, as well as the balances of assets and liabilities arising from such transactions as at 30/06/2023 and 31/12/2022, are as follows:
| a) Assets | Company | |
|---|---|---|
| Amounts in € '000 | 30/06/2023 | 31/12/2022 |
| Trade receivables | 73.470 | 111.703 |
| Long-term loans | 138.240 | 138.918 |
| Short-term part of receivables from long-term loans | 6.729 | 5.338 |
| Intercompany receivables from cash and other receivables | 6.435 | 2.005 |
| Total | 224.874 | 257.964 |
| b) Liabilities | Company | |
| Amounts in € '000 | 30/06/2023 | 31/12/2022 |
| Suppliers | 7.215 | 15.068 |
| Long‐term loans | 321.813 | 322.313 |
| Long‐term liabilities carried forward | 4.151 | 1.056 |
| Other liabilities | 7.095 | 15.808 |
| Total | 340.274 | 354.245 |
| c) Income | Company | |
| Amounts in € '000 | 01/01 - 30/06/2023 |
01/01 - 30/06/2022 |
| Income from electric energy sale | − | 17.106 |
| POC construction material | 50.018 | 86.896 |
| Repairs and maintenance | 3.704 | 3.373 |
| Other services | 5.430 | 2.726 |
| Other income and sales | 5.300 | 3.802 |
| Financial income | 2.782 | 2.945 |
| Total | 67.234 | 116.848 |
| d) Expenses | Company | |
|---|---|---|
| Amounts in € '000 | 01/01 - 30/06/2023 |
01/01 - 30/06/2022 |
| Electric energy acquisition cost | 1 | 13.167 |
| Fees and other third party expenses | 403 | 214 |
| Other expenses | − | 2 |
| Financial expenses | 5.889 | 5.608 |
| Total | 6.293 | 18.991 |
| e) Revenue from participating interest and other investments | Company | |
| Amounts in € '000 | 01/01 - 30/06/2023 |
01/01 - 30/06/2022 |
| Derivative income | 33.763 | 41.675 |
| Total | 33.763 | 41.675 |
| a) Assets | Group | Company | ||
|---|---|---|---|---|
| Amounts in € '000 | 30/06/2023 | 31/12/2022 | 30/06/2023 | 31/12/2022 |
| Trade receivables | 35.223 | 41.046 | 32.114 | 36.018 |
| Loans and Guarantees | 958 | 887 | 56 | − |
| Prepayments and other receivables | 205 | 5.828 | 200 | 5.543 |
| Total | 36.386 | 47.761 | 32.370 | 41.561 |
| b) Liabilities | Group | Company | ||
|---|---|---|---|---|
| Amounts in € '000 | 30/06/2023 | 31/12/2022 | 30/06/2023 | 31/12/2022 |
| Suppliers | 9.483 | 31.159 | 7.661 | 17.675 |
| Other liabilities | 18.136 | 12.335 | 17.507 | 1.309 |
| Total | 27.619 | 43.494 | 25.168 | 18.984 |
| c) Income | Group | Company | ||
| Amounts in € '000 | 01/01 - 30/06/2023 |
01/01 - 30/06/2022 |
01/01 - 30/06/2023 |
01/01 - 30/06/2022 |
| Income from electric energy sale | 24.255 | 3.527 | 3.409 | − |
| Income from construction services | 1.286 | − | 1.286 | − |
| Other income | 1.055 | 35 | 1.055 | 35 |
| Financial income | 17 | 27 | 1 | 27 |
| Total | 26.613 | 3.589 | 5.751 | 62 |
| d) Expenses | Group | Company | |||
|---|---|---|---|---|---|
| Amounts in € '000 | 01/01 - 30/06/2023 |
01/01 - 30/06/2022 |
01/01 - 30/06/2023 |
01/01 - 30/06/2022 |
|
| Electric energy acquisition cost | 57 | 9.197 | 57 | 9.180 | |
| Fees and other third party expenses | 1.511 | 506 | 1.432 | 506 | |
| Other expenses | 70.828 | 4.193 | 928 | 635 | |
| Financial expenses | 1 | 25 | − | 25 | |
| Total | 72.397 | 13.921 | 2.417 | 10.346 | |
TERNA ENERGY GROUP Semi-Annual Financial Report for the period from January 1st to June 30th , 2023 (Amounts in thousands of Euros unless mentioned otherwise)
The most significant transactions and balances of the Company with its subsidiaries as of 30/06/2023presented below as follows:
| ASSETS | LIABILITIES | INCOME | EXPENSES | ||
|---|---|---|---|---|---|
| AIOLIKI EASTERN GREECE M.A.E. | Subsidiary | 2.695 | 8 | 332 | − |
| AIOLIKI MARMARIOU EUVOIAS M.A.E. | Subsidiary | 6.053 | 2.856 | 445 | 56 |
| AIOLIKI PANORAMATOS DERVENOCHORION S.A. | Subsidiary | 191 | 25.513 | 305 | 413 |
| ENERGIAKI SERVOUNIOU S.A. | Subsidiary | 151 | 16.008 | 255 | 313 |
| IWECO HONOS CRETE S.A. | Subsidiary | 51 | 1.121 | 98 | 19 |
| AIOLIKI PROVATA TRAIANOUPOLEOS M.A.E. | Subsidiary | 18.353 | − | 730 | − |
| EUROWIND S.A. | Subsidiary | 102 | 17.642 | 156 | 302 |
| ENERGEIAKI DYSTION EUVOIAS M.A.E. | Subsidiary | 2.271 | 30 | 315 | − |
| AIOLIKI KARYSTIAS EVOIA S.A. | Subsidiary | 12.049 | − | 1.062 | − |
| ENERGEIAKI KAFIREOS EUVOIAS S.A. | Subsidiary | 25.863 | 3 | 8.954 | − |
| ENERGIAKI STYRON EVIAS M.A.E. | Subsidiary | 4.447 | 4.080 | 190 | 80 |
| ΤΕRΝΑ ENERGY AI-GIORGIS S.A. | Subsidiary | 2.016 | − | 1.073 | − |
| ΤΕRΝΑ AIOLIKI AMARINTHOU S.A. | Subsidiary | 1.173 | − | 193 | − |
| AIOLIKI PASTRA ATTIKIS S.A. | Subsidiary | 178 | 4.070 | 228 | 119 |
| ENERGIAKI NEAPOLEOS LAKONIAS S.A. | Subsidiary | 3.631 | − | 132 | − |
| ENERGIAKI PELOPONNISOU S.A. | Subsidiary | 15.831 | − | 567 | − |
| EPIRUS SUSTAINABLE SINGLE OWNED SOCIETE ANONYME SPECIAL PURPOSE |
Subsidiary | 14.830 | 4 | 2.425 | 24 |
| PERIVALLONTIKI PELOPONNISOU M.A.E. | Subsidiary | 34.008 | 6.891 | 25.642 | 379 |
| ENERGIAKI SERVOUNIOU S.A. | Subsidiary | 151 | 16.008 | 255 | 313 |
| TERNA ENERGY FINANCE S.A. | Subsidiary | 1 | 147.673 | − | 2.654 |
| TERNA ENERGY EVROU S.A. | Subsidiary | 163 | 34.637 | 249 | 650 |
| AIOLIKI RACHOULAS DERVENOCHORION S.A. | Subsidiary | 427 | 25.472 | 463 | 472 |
| AIOLIKI DERVENI TRAIANOUPOLEOS S.A. | Subsidiary | 580 | 4.579 | 393 | 79 |
| TERNA ENERGY-PUMPED STORAGE I S.M.S.A. | Subsidiary | 637 | − | 684 | − |
| TERNA ENERGY OMALIES M.A.E. | Subsidiary | 69.244 | 258 | 21.037 | − |
| 215.096 | 306.853 | 66.183 | 5.873 |
Remuneration of Board of Directors members and senior executives of the Company: The fees of the Board of Directors members and senior executives for the periods 01/01/2023-30/06/2023 and 01/01/2022- 30/06/2022 are presented below as follows:
| Group | Company | ||
|---|---|---|---|
| 01/01 - 30/06/2023 |
01/01 - 30/06/2022 |
01/01 - 30/06/2023 |
01/01 - 30/06/2022 |
| 1.503 | 1.492 | 1.370 | 1.370 |
| 859 | 462 | 694 | 336 |
| 2.362 | 1.954 | 2.064 | 1.706 |
The Statement of Comprehensive Income, for the six-month period ended 30 June 2023, was charged with the amount of € 448 thousand relating to the Share Distribution Plan (Note 19).
Financial assets and financial liabilities measured at fair value in the Group's Statement of Financial Position are classified under the following 3 level hierarchy in order to determine and disclose the fair value of financial instruments per valuation technique:
The Group has adopted the revision of IFRS 7 regarding the fair value hierarchy of the financial instruments at the following levels:
The Group's and the Company financial assets and financial liabilities measured at fair value as of 30/06/2023 and 31/12/2022 classified in the aforementioned levels of hierarchy, are as follows:
| 30th June 2023 | ||||
|---|---|---|---|---|
| Financial Assets | Stage 1 | Stage 2 | Stage 3 | Total |
| Other short-term investments | 4.220 | − | − | 4.220 |
| Investments in equity interests | − | − | 3.752 | 3.752 |
| Receivables from derivatives | − | 30.030 | − | 30.030 |
| Total | 4.220 | 30.030 | 3.752 | 38.002 |
| Financial Liabilities | ||||
| Liabilities from derivatives | − | 9.133 | 6.241 | 15.374 |
| Contingent consideration from acquisition of assets |
− | − | 23.231 | 23.231 |
| Total | − | 9.133 | 29.472 | 38.605 |
| Net Fair Value | 4.220 | 20.897 | (25.720) | (603) |
| 31st December 2022 | ||||
| Financial Assets | Stage 1 | Stage 2 | Stage 3 | Total |
| Other short-term investments | 4.322 | − | − | 4.322 |
| Investments in equity interests | − | − | 3.499 | 3.499 |
| Receivables from derivatives | − | 34.517 | − | 34.517 |
| Total | 4.322 | 34.517 | 3.499 | 42.338 |
| Financial Liabilities | ||||
| Liabilities from derivatives | − | 6.849 | 13.515 | 20.364 |
| Contingent consideration from acquisition of assets |
− | − | 18.525 | 18.525 |
| Total | − | 6.849 | 32.040 | 38.889 |
| Net Fair Value | 4.322 | 27.668 | (28.541) | 3.449 |
There were no changes in the valuation techniques applied by the Group within the current reporting period. Moreover, there were no transfers of amounts between the fair value hierarchy levels 1 and 2 during 2023 & 2022.
The level 2 derivative financial instruments relate to forward rate swap contracts, while those of level 3 relate to fixed for floating swap contracts of the HERON EN.A and HERON EN.A BUSINESS plan and the possible consideration from the acquisition of assets (see Note 15). To determine the fair value of the above financial instruments, the Group uses appropriate valuation techniques depending on the category of financial instrument. With regard to forward rate swap contracts, their fair value is measured by reference to market interest rate curves, through valuations by credit institutions and in combination with internal valuation using interest rate curves. With regard to the fixed for floating swap contracts of the HERON EN.A and HERON EN.A BUSINESS plan, their fair value is determined by using future market prices and discounting their estimated future value at present value.
The fair value of the contingent consideration from acquisition of assets (see Note 4), was calculated using the probability weighted payout approach at the date of acquisition. The fair value of the consideration as at 30 June 2023 was determined to be € 23,231 thousand. and was measured at its present value using appropriate discount rates of 6.14% for TERNA ENERGY OMALIES MAE, 8.03% for KEY ENERGY IKE and KASTRAKI ENERGY IKE and 7.95% for TERNA ENERGY SAPON IKE. The fair value of the contingent consideration liability is measured at each reporting date and up to the date of final measurement and payment. These dates are estimated to be no later than 30/06/2024 for TERNA ENERGY OMALIES and 31/12/2023 for KEY SOLAR ENERGY IKE, KASTRAKI SOLAR IKE and TERNA ENERGY SAPON PC.
The changes in the Group's financial instruments classified as Level 3 for the years ended at 30/06/2023 and 31/12/2022 are presented below:
| 30/06/2023 | 31/12/2022 | ||||||
|---|---|---|---|---|---|---|---|
| Investments in equity interests |
Derivatives | Contingent consideration from acquisition of assets |
Investments in equity interests |
Derivatives | Contingent consideration from acquisition of assets |
||
| Opening balance | 3.499 | (13.515) | (18.525) | 2.583 | (5.164) | (10.549) | |
| - Acquisition | 201 | − | (6.306) | 1.107 | (8.351) | (7.105) | |
| - Return of capital | − | − | 1.429 | − | − | − | |
| - (Impairment) | 52 | − | 497 | (191) | − | − | |
| - Finance cost | − | − | (326) | − | − | (871) | |
| - Effect of evaluation | − | 7.274 | − | − | − | − | |
| Closing balance | 3.752 | (6.241) | (23.231) | 3.499 | (13.515) | (18.525) |
In order to cover financing needs regarding new projects, the Company and the Group issue notional collateral on its current assets as well as liens (usually in the form of mortgages) on its non-current assets as guarantees to the creditors. Additional information regarding such collaterals is presented in Notes 8 and 13.
The Group's tax liabilities are not final as there are non-inspected tax years, which are analyzed in Note 5 to the accompanying Financial Statements. For non-inspected tax years there is the possibility additional taxes and surcharges to be imposed at the time they are inspected and finalized. The Group assesses annually any contingent liabilities that are expected to arise from the tax inspection of past years, making relevant provisions where appropriate. The Group has made provisions for non-inspected tax years of € 560 thousand (31/12/2022: € 560 thousand). Management considers that in addition to the provisions made, any tax amounts that may arise will not have a significant impact on the equity, results and cash flows of the Group and the Company.
In application of relevant tax provisions: a) of par. 1 of Article 84 of Law No. 2238/1994 (pending income tax cases), b) par. 1 of Article 57 of Law of income tax (2238). 2859/2000 (pending VAT cases) and c) par. 5 of Article 9 of Law No. 2523/1997 ("fines for income tax cases"), the State's right to impose the tax for the years up to 2016 has expired by 31/12/2022, with the reservation of special or exceptional provisions that may provide for a longer limitation period and under the conditions that they stipulate.
In addition, in the absence of an existing provision on limitation in the Code of Laws on Stamp Duty, the relevant claim of the State for the imposition of stamp duty is subject to the twenty-year limitation period under Article 249 of the Civil Code for cases created up to the 2013 financial year. From 1/1/2014 and after the entry into force of Law No. 4174 /2013, the limitation period for the imposition of stamp duties is limited to 5 years since the procedures for its imposition and collection are now included in the provisions of the Code of Tax Procedures.
For the financial years 2011 to 2021, the Group's companies operating in Greece and meeting the relevant criteria for being subject to the tax audit of the Certified Public Accountants received a Tax Certificate, in accordance with par. 5 of article 82 of Law 2238/1994 and article 65A par. 1 of Law 4174/2013, without any substantial differences. It should be noted that, according to Government Resolution 1006/2016, companies that have been subject to the aforementioned special tax audit are not exempted from the regular audit by the competent tax authorities. Furthermore, in accordance with the relevant legislation, for the fiscal years 2016 and onwards, the audit and the issuance of the Tax Certificate is applicable on an optional basis.
For the fiscal year 2022, for the Group's companies operating in Greece have been subject to the optional tax audit of the Certified Public Accountants, this special audit for the obtaining of a Tax Certificate is in progress and is expected to be completed after the publication of the interim condensed financial statements. Upon completion of these tax audits, management does not expect to incur any significant tax liabilities other than those recorded and reflected in the financial statements of the Group and the Company. It should be noted that, in accordance with the provisions of the tax return no. Government Resolution 1192/2017, the State's right to impute tax up to and including the 2016 financial year has expired with the exception of the special provisions on 10-year, 15-year and 20-year limitation periods.
The outstanding balance of the projects from construction contracts of the Group amounts on 30/06/2023 at € 27,2 million (31/12/2022:€ 54,0 million) which includes the outstanding balance (backlog) from concession contracts of € 26,2 million (31/12/2022: € 48.8 million).
The Company and its consolidated companies are involved (as defendant and plaintiff) in various litigations in the context of their normal operation. The Group makes provisions in the financial statements for outstanding legal cases when it is probable that an outflow of resources will be required to settle the obligation and that the amount can be estimated reliably.
In this context, the Group recognized as of 30/06/2023 provisions of € 335 thousand (31/12/2022: € 335 thousand). Management, as well as legal consultants, consider that outstanding cases are expected to be settled without significant adverse effects on the consolidated financial position of the Group or the Company, or the results of their operation apart from the provision already made for litigations.
Analytically:
Legal claims against the Group/Contingent Liabilities
A total of nineteen (19) people sued the Company in the Athens Court for the payment of the total amount of € 2.522.500,00 from tort liability, i.e. € 2.332.500,00 for property damage and € 190.000 for non-pecuniary damage. The discussion of the case was set for 15.10.2015, whereupon it was postponed to 07.12.2017 at the request of the plaintiffs. However, on 15.11.2017, the plaintiffs notified an identical suit with the same total amount claimed with a waiver of the previous suit. This new suit was discussed on 7-3-2019. In respect thereof, judgment no. 1589/2020 was issued, which rejected the suit. The opposing parties have not appealed, and legal advisors presume that they will not do so.
Legal action by a total of twenty-one (21) individuals against the Company. Intervenors in this action were AOLIKIKI STEREAS ELLADOS M.A.E. for the Company and against the opposing parties and the Hellenic State against the opposing parties. The formal trial took place on 21.03.2023. The Group's Legal Department presumes the dismissal of this lawsuit.
Action brought by 2 individuals in the Athens Court against the Company, for compensation for damages, due to, as the individuals claim, damage to their business due to the Company's activity in the wider area of Mount Ochi, in Evia. The action will be discussed under the new ordinary procedure of the Civil Code. The Group's Legal Department presumes that this claim will be dismissed.
Action brought by a person before the Chalkida Courtagainst, inter alia, the Company, for payment of damages, for compensation for pecuniary and non-pecuniary losses and for moral damages, which, according to the person's allegations, were caused by the Company's activity in an area of the Municipality of Eretria, in Evia. The action will be discussed under the new ordinary procedure of the Civil Code. The Group's Legal Department presumes that this lawsuit will be dismissed.
The Lawsuit - Complaint dated 1/7/2019 brought at the Athens Court of First Instance by an individual against "TERNA ENERGY SA" and "TERNA ENERGY AIGORGIS S.A.", which was notified on 31-07-2019, requesting the restitution of the island of Agios Georgios, Attica, as an alleged leasehold property allegedly owned by the plaintiff, was heard on 6 September 2019. Thereupon, a decision No. 619/2020 was issued, which upheld the claim, ordered the restitution of the island of Agios Georgios to the plaintiff by TERNA ENERGY S.A. or anyone who derives rights from it, including "TERNA ENERGY S.A. AI GIORGIS S.A." (it is understood that TERNA ENERGY S.A. has transferred the Lease to that company, or has subleased a lease to it) and declared the decision provisionally enforceable. On 15.06.2020, "TERNA ENERGY S.A." and "TERNA ENERGY AI GIORGIS S.A." received a court order for voluntary compliance with the above decision, otherwise the court decision would be enforced. The companies "TERNA ENERGY S.A." and "TERNA ENERGY AI GIORGIS S.A." filed an application for suspension of execution of the above order, requesting an interim injunction, heard on 18 June 2020 and granted on 19 June 2020 until the hearing of the Application for Interim Measures on 28 July 2020, on which the decision no. 4555/2020 which granted the stay, and an appeal against decision No. 619/2020, on which was issued decision No. 548/2021 of the Athens Court of Appeal, which allowed the appeal, struck out the 619/2020 decision, retried the claim and dismissed it in its entirety. The opposing party filed a Petition for Appeal, which was heard by the Supreme Court of Greece and a 389/2022 decision was issued, which annulled the 548/2021 decision and referred the case back to the Court of Appeal for a new trial, which took place on June 7, 2022. In its decision, the Supreme Court of Greece did not raise any disputed issue (legal or factual) against the companies and did not create a negative precedent for the continuation of the case by binding the Court of Appeal (e.g. ownership of the island, validity of the lease, etc. etc.), but considered that the Court of Appeal had in its judgment partly contradictory reasons (559 no. 19 CCP) because on the one hand it accepted that the judgment that the lease contract was null and void had become final, but on the other hand it also had a consideration with regard to the "termination" of the lease. In any event, the revocation of the 548/2021 decision revives the 4555/2020 decision of the Mon. Athens Prot. of Athens, which has suspended the execution/executability of decision No. 619/2020. Given the generally positive course of the case so far, it is our opinion that the companies will be vindicated before the Court of Appeal as well and their appeal will be accepted.
The other party filed a lawsuit against "TERNA ENERGY S.A." and "TERNA ENERGY AI GIORGIS S.A.", requesting the Application for Precautionary Measures, with a request for the termination of the Provisional Order as of 19.06.2020 of the Chairman of the Court of First Instance, granted in respect of as of 16.06.2020 Application for Suspension of Enforcement of the companies "TERNA ENERGY S.A." and "TERNA ENERGY AI GIORGIS S.A." or - alternatively - continuation of validity of the above Interim Order under the condition of payment to the applicant of the amount of € 8.9 k per month as compensation for the use of its property. Both claims were heard on July 28, 2020 and regarding those claims, no. 4555/2020 decision was issued, accepting the application for precautionary measures of "TERNA ENERGY S.A." and "TERNA ENERGY AI GIORGIS S.A.", focusing on the issue of the installation of the latter, based on the protocols and not any type of lease relationship, speculating that this reason will be accepted in the Court of Appeal. A guarantee was ordered to be submitted in favor of the other party to the Deposits and Loans Fund, amounting to € 6 k.
Finally, the same opponent, succeeded in issuing against the Company no. 10898/2019 Payment Order of the Judge of the Single Member Court of First Instance of Athens, Chairman of the Court of First Instance, pursuant to which and from the order dated as at 04/12/2019 placed under a copy of the first executable inventory of the above payment order, the Company was ordered to pay to the other party a total amount of € 369.3 k plus legal interest. The Company timely filed (GAK 108200/2019 and EAK 13627/2019) an Application for suspension of execution of the above payment order with a request for a temporary order, regarding which the temporary order as of 10.12.2019 of the Chairman of the Single Member Court of First Instance of Athens was issued, granting - temporarily and until the discussion of the above application on 11.03.2020 and given the course of the hearing - a suspension according to article 632 § 3 of the execution of the above payment order no. 10898/2019 setting the condition of the payment of guarantee by the Company amounting to € 50,000 within 15 working days from the publication of the temporary order. In this regard, a Letter of Guarantee of the NATIONAL BANK OF GREECE SA no. 633/7404778 / C was issued, which was submitted to the Athens Court of First Instance, drafted under no. 519 / 31-12-2019 Guarantee Report. The application for precautionary measures was heard on 11.03.2020 and the validity of the effective interim injunction was extended until the issuance of the relative decision on it. No. 3804/2020 decision was issued, suspending the Payment Order until the issuance of a final decision regarding the case as of 19.12.2019, without the provision of a guarantee.
Finally, the same opposing party brought an action before the Athens Court of First Instance against "TERNA ENERGY SA" and "TERNA ENERGY A.I. GIORGIS S.A.", which was notified on 20.07.2020, with which it waived its right to the 13. 01.01.2020 of its action against the same opposing parties and on the other hand, it seeks compensation in the amount of € 235 k due to tort, according to Article 914 of the Civil Code, consisting of the occupation of the island of Ag. George and the loss of income from the exploitation of the island by the plaintiff. The action will be heard at a formal hearing on 23-3-2023. The Group's Legal Department presumes that this lawsuit will be dismissed.
Action brought by a natural person against TERNA ENERGIAKI AI GIORGIS S.A. to the Piraeus Court , for the compensation payment for the performance of an expert opinion, to be discussed on 19/9/2023. The Group's Legal Department anticipates the dismissal of this claim.
Action brought by 21 natural persons against TERNA ENERGY S.A., in favour of which AIOLIKI STEREAS ELLADOS S.A. intervened and against the opposing parties and the Greek State against the opposing parties. The formal hearing date has been set for 21.03.2023. The Group's Legal Department presumes that this lawsuit will be dismissed.
Individuals (three 3) filed before the Magistrate Court of Karystos, Lawsuit against the Company with a request to recognize unlawful actions in the specific areas within the installation polygon of "Karabila" Wind Farm, requesting that these areas should be returned and the contractions on them – removed. On the above, the no. 15/2021 decision of the Magistrate Court of Karystos was issued, which postponed the issuance of a final decision and ordered the conduct of an expert opinion on specific issues and the resumption of the discussion. The Group's Legal Department presumes that this lawsuit will be dismissed. Moreover, on 23-10-2020, an individual person filed before the Single Member Court of First Instance of Chalkida the Lawsuit against the company with a request to recognize a conjuncture of rights by 12.5% and draw the company away from the specific areas within the installation polygon of "Karabila" Wind Farm, requesting compensation for non-pecuniary damage at an amount of € 120,000. The lawsuit was discussed on 17/12/2021 and we are awaiting the relevant decision. The Group's Legal Department presumes that this lawsuit will be dismissed.
Individuals (total of nine (9)) filed a Lawsuit against the Company before the Tamynea Magistrate Court for Disturbance of Law against the Company, on which Judgment No. 45/2022 was issued, which dismissed the lawsuit. Further, on 16.09.2022, an appeal was served on 2 of the above individuals against the Company and against Decision No. 45/2022 of the Tamynia Magistrate Court, which is scheduled to be heard on 3/11/2023. The Group's Legal Department presumes that this lawsuit will be dismissed.
Individuals have filed a lawsuit before the Chalkida Court of First Instance, which is directed against the Greek State and our Company, requesting that their ownership of the Company's property be recognized and that the Company be expelled from this property. The action was discussed and a decree no. 229/2022 Decision, which ordered the hearing to be reopened in order to produce the plaintiffs' submissions: (a) the decision of the Special Committee for the examination of the plaintiffs' objections to the forestry character of the disputed area and any corresponding corrections to the posted forestry map; and (b) the gazette gazette with the publication of the forestry map for the disputed area described in the statement of reasons, as ratified by the Coordinator of the relevant Decentralized Administration. To date, there has been no development in the information requested. The Group's Legal Department presumes that this lawsuit will be dismissed.
While carrying out its activities, the Group issues bank letters of guarantee in order to assure its counterparties of the fulfillment of obligations arising from the terms of its contracts.
The types and amounts (in thousand Euro) of the letters of guarantee issued by the Group to its counterparties as of 30/06/2023:
| Type of Letter of Guarantee | Amount 30/06/2023 | Amount 31/12/2022 |
|---|---|---|
| Contract execution guarantees for construction | 243.341 | 222.403 |
| Guarantees of payment | 20.592 | 23.906 |
| Tender guarantees | 3.685 | 3.150 |
| Guarantees of warranty execution for Agreements of Private | 13.689 | 12.808 |
| and Public Sector Guarantees of warranty execution for Grants |
116.756 | 128.560 |
| Guarantees of warranty execution for Other Agreements | 12.033 | 12.241 |
| Total | 410.096 | 403.069 |
From 01/07/2023 until the preparation date of the present report, the following important events occurred:
The installation of all the wind turbines of the Group's Wind Farm Complex in the area of Karystos & Kafirea with a total capacity of 327 MW has been completed. This project is the largest project of Terna Energy Group in the field of renewable energy and Wind Energy in particular.
On 30/06/2023 the Independent Auditor issued the Acceptance Certificate of the Transitional Waste Management Station 2nd DE (Messinia) following the successful completion of the trial period of the abovementioned Station, whereby on the above-mentioned date the Planned Date of Availability of the Transitional Waste Management Services of the Transitional Waste Management Station 2nd DE (Messinia) was reached. The successful completion of the trial period and the issuance of the aforementioned Acceptance Certificate marks the start, as of 1 July 2023, of the Transitional Management Services Period of the Transitional Waste Management Station 2nd DE (Messinia) for the acceptance and treatment of municipal solid waste in accordance with the terms of the Partnership Agreement.
The separate and consolidated Financial Statements for the annual period ended on 30/06/2023 were approved by the Board of Directors of TERNA ENERGY S.A. on 21/09/2023.
| Chairman of the Board of Directors |
Chief Executive Officer |
Executive Member of the Board of Directors |
Chief Financial Officer | Chief Accountant |
|---|---|---|---|---|
| George Peristeris |
Emmanouil Maragoudakis |
Aristotelis Spiliotis |
Emmanouil Fafalios |
Artan Tzanari |
| ID No. ΑΒ 560298 | ID No. ΑΒ 986527 | ID No. ΑΚ 127469 |
ID No. ΑΚ 082011 | ID No. ΑΜ 587311 License Reg. No A' CLASS 064937 |
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