Scatec ASA

Earnings Release • Nov 2, 2023

Scatec reports third quarter results: Focus and discipline

Scatec reports third quarter results: Focus and discipline

Oslo, 2 November 2023: In the third quarter 2023, Scatec reported solid

proportionate revenues of NOK 2.46 billion (1.63), with an EBITDA increase of 5

percent compared to the third quarter last year to NOK 893 billion (850).

Scatec realised strong development and construction (D&C) revenues of NOK 1.32

billion (412) from its three main projects under construction and improved the

gross margin for a third consecutive quarter to 13 percent. These projects are

now entering the final construction phase and preparing for commercial

operations. Proportionate Power Production was 1,047 GWh (1,135) and revenues in

the Power Production segment were NOK 1,028 million (1,120), impacted by reduced

revenues in the Philippines. Power production EBITDA was NOK 778 million (907).

"We take pride in the progress we have achieved since our capital markets update

and in recent months. Our dedicated team is committed to driving transformative

change through world-class renewable energy initiatives spanning from South

Africa to the Philippines to Brazil. Scatec has realised significant renewable

growth through our highest construction activity ever and the projects have

strong economics with robust returns and attractive gross margins," says Scatec

CEO Terje Pilskog.

"Crossing key milestones during the quarter, we have showcased operational

excellence and business model resilience amid current challenging economic

conditions. In addition, we have focused our activities to ensure our readiness

for profitable growth. The pipeline has been streamlined; we have reduced

operational costs levels and sold assets, both to recycle capital and reduce

complexity in our portfolio," adds Pilskog.

Strategy and way forward

Scatec's strategy remains firm - to develop, build, own, and operate renewable

energy, with a focus on growing renewables and optimising the portfolio. Scatec

continues to see strong long-term demand for renewables and particularly

attractive opportunities within solar as component prices are decreasing.

However, the current macro-economic landscape, marked by record high interest

rates is putting pressure on the cost of capital and project profitability.

Scatec is therefore aligning its growth rate to internal funding capacity,

targeting NOK 500 - 750 million of gross equity investments annually, in line

with the company's historical growth pace. Investing with discipline, Scatec

will utilise its integrated business model and stay committed to delivering

attractive returns of 1.2 times cost of equity, D&C gross margins of 8-10% and

O&M margins of 25-30%.

The cash flow from Scatec's operating plants is robust and will increase

significantly over the next months with the new plants coming into operations.

Growth and debt repayments will be funded by internal capacity coming from a

strong and growing cash flow from operating assets, enhanced capital recycling

activities, alternative ownership structures with reduced equity stake and no

dividend payments.

"We continue to be committed to disciplined growth with attractive margins

funded by internal capacity, while focusing on optimising our portfolio. The

long-term fundamentals for renewables remain strong, and we're adjusting in the

short-term to navigate the current macro-economic and capital market situation,

putting firm mitigating actions in place. We're also accelerating our efforts on

capital recycling and will also consider additional debt repayments," adds

Pilskog.

Outlook

The full year 2023 EBITDA estimate for Power Production is updated from NOK 3.1

- 3.4 billion to NOK 3.05 - 3.25 billion, driven by a revised production

estimate for the Philippines, the sale of the solar plant in Argentina and

foreign currency effects.

Dividend policy

Given the current macro-economic and capital market situation the Board of

Directors have approved to change the dividend policy to no dividend. The

dividend policy will be assessed annually by the board based on Scatec's capital

situation.

Additional information

Proportionate historical financial information on a country-by-country level is

attached to the stock exchange notice.

A presentation of the results, followed by a Q&A session will be held at

Scatec's headquarters at Skøyen Atrium III (1(st) floor), Askekroken 11, 0277

Oslo, today at 09:00 am CET. You can also follow the presentation and Q&A

session from our website, or this direct link: Scatec webcast Q3 2023

(https://channel.royalcast.com/hegnarmedia/#!/hegnarmedia/20231102_8).

For further information, please contact:

For analysts and investors: Andreas Austrell, VP IR, phone: +47 974 38 686,

andreas.austrell@scatec.com (mailto:andreas.austrell@scatec.com)

For media: Meera Bhatia, SVP Communications & Government Affairs, phone:

+47 468 44 959, meera.bhatia@scatec.com (mailto:meera.bhatia@scatec.com)

About Scatec

Scatec is a leading renewable energy solutions provider, accelerating access to

reliable and affordable clean energy emerging markets. As a long-term player, we

develop, build, own, and operate renewable energy plants, with 4.4 GW in

operation and under construction across four continents today. We are committed

to grow our renewable energy capacity, delivered by our passionate employees and

partners who are driven by a common vision of 'Improving our Future'. Scatec is

headquartered in Oslo, Norway and listed on the Oslo Stock Exchange under the

ticker symbol 'SCATC'. To learn more, visit www.scatec.com

(https://scatec.com/) or connect with us on LinkedIn

(https://www.linkedin.com/company/scatec).

This information is subject to the disclosure requirements pursuant to Section

5-12 the Norwegian Securities Trading Act