Quarterly Report • Aug 31, 2021
Quarterly Report
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Kristiansand, August 31st, 2021
Skandia Greenpower is a retailer of electricity towards the consumer market.
The group is aiming to become a key player in the Norwegian and Nordic energy industry by the time we reach the end of 2025. We will realise this target by offering a simpler, cheaper, and greener electricity.
We have an objective of accelerating the use of renewable energy sources through profitable energy management and optimization, applying digital solutions that enable smarter consumption and production. The result is lower cost and reduced CO2-footprint.
After the private placement of MNOK 150 in February, the group has started upscaling all sales activities, both through aligning forces with strategic external partners and through internal initiatives. From the private placement until the end of august we have a realised growth in the number of customers by 25%. We are optimistic that our sales growth currently is on a positive trend through the year and into 2022.
We are building a tech company and recruitment processes for all functions in the organisation. Our growth plan includes a technological shift through the development of the NextGen platform / Growth in number of customers in the Nordic market and a corresponding efficient delivery process. This entails to secure key competence in all areas supporting digital sales and marketing through the organisation.
The development phase of NextGen is reaching its end. The digital platform solution is fully developed in its first version and a soft launch is planned during the second half of 2021 We will perform a soft launch of the platform towards a targeted audience during Q4. The soft launch phase will be replaced by the launch of the platform in the market.
We are striving to digitize, not only the NextGen platform but the internal handling processes. During the second quarter we have recruited key personnel to drive these changes in the organisation.
We are comparing financial figures between 2020 and 2021. It is important to stress that the two organisations are very different in 2020 compared to 2021. The major difference is that the company wasn't recapitalised in 2020 and therefore had a lack of financial strength and underlying activities.
• EBITDA for the second quarter alone is MNOK 0,9 (2020: MNOK 3,6)
• Net result for the second quarter alone is MNOK -3,2 (2020: MNOK -2,2)
• Net cashflow from investments for the second quarter alone is MNOK -12,9 (2020: MNOK - 9,3)
The group has changed the method of invoicing to customers from prepayment invoicing to invoicing in arrears.
The increase of gross revenue from MNOK 57,7 in 2020 to MNOK 121,7 for the first six months in 2021 reflects the unusual low Nordpool-market electricity prices in 2020.
The decrease of net revenue from MNOK 27,1 in the first six months in 2020 to MNOK 19,1 in 2021 is due to several circumstances, but mainly due to a strategy of having a more market driven pricing strategy. In addition, due to a lower slightly average customer base.
The group has reduced the operating expenses for the first six months in 2021 with 2,1 MNOK compared with 2020 by focusing on maintaining a low-cost base.
The group is investing in the next generation digital solution and in customer acquisition and has increased the capital expenses in 2021 compared to 2020.
Net loss for the period in 2021 amounted to -4,8 MNOK (2020 -0,8 MNOK)
In the board's opinion, the presented P&L and corresponding balance sheet give a correct picture of the operating result and the group's earnings for this period. The administration has the intent to improve the reporting structures and reports. This will be presented at a later stage.
The electricity retail market has a short pay-back time on customer acquisitions. Consequently, the group customer base is profitable. The retail market for electricity sales is highly competitive. The group has an ambition to grow in the private consumer market.
The digital platform solution is fully developed in its first version. The group is in the phase making the latest changes to fine-tune the product solution to bring it to the market.
During 2021, the company has employed critical staff to build our organisation, including the new CTO with strong expertise and experience from the energy industry.
In 2021, 10,4 MNOK has been spent on the development of smart technology and digital solutions.
The assumption of continued operations is present, and the consolidated financial statements for the period ended 30 June 2021 have been prepared under this assumption. Skandia GreenPower is currently in a development phase with negative operating results. The board believes that this phase will continue during 2021-2022, but that the available liquidity received through the private placement in February 2021 will make it possible to finance operations beyond 2021 and years ahead.
The demand for electricity, electricity prices, customer churn are the main uncertainties in a shortterm perspective. The demand for electricity varies with e.g. weather conditions and temperature. Electricity prices are determined by supply and demand through Nordpool, the marketplace for electricity in the Nordic countries.
The group's current exposure to currency risk is limited as most of the group's income and expenses are in NOK. The group has some costs that are not in NOK, such as payments for el-certificates and guarantees of origin, which are generally payable in Euro. The group has not secured its currency risk through forward exchange contracts per 30.06.2021.
The group is exposed to credit risk. If the group's customers are unable or unwilling to pay, the group may experience a loss. While this risk is to some extent mitigated by the fact that the group's customer portfolio consists primarily of retail customers, with no single customer representing a significant part of the group's income, payment failures by customers may still have an adverse effect on the group's results of operations and financial condition.
The group has a liquidity risk associated with inflows and outflows of the flow of goods, however the group has secured sufficient funds to cover this risk.
The group sees significant opportunities for further growth in all parts of the business. Technology development and customer behaviour changes will in the years ahead be a generator for a new era for the energy industry.
We confirm, to the best of our knowledge, that the half-year report and financial statements for the period of 1 January to 30 June 2021 have been prepared in accordance with the Norwegian Accounting Act and accounting standards generally accepted in Norway (NGAAP) and give a true and fair view of the Skandia GreenPower group's assets, liabilities, financial position, and results for the period.
We also confirm, to the best of our knowledge, that the board of directors' report includes a fair review of important events that have occurred during the period and their impact on the financial statement, any major related parties' transactions, and a description of the principal risks and uncertainties for the operations.
August 30th . 2021
The board of directors and the CEO of Skandia Greenpower AS
Erik Edvard Tønnesen André Berg Edvardsen Chairman of the board Board member
Jon Arne Ramsland Torbjørn Gladsø Board member Board member
______________________________________ ___________________________________
_____________________________________ ___________________________________
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Gunnar Norheim CEO
| NGAAP / NOK 1.000 / UNAUDITED | Note | $Q2 - 2021$ | $Q2 - 2020$ | YTD Q2-2021 YTD Q2-2020 | |
|---|---|---|---|---|---|
| Bruttoinntekt / Gross revenue | 1 | 45 014 | 18 888 | 121 951 | 57 694 |
| Varekostnader / Cost of goods sold | (36663) | (6398) | (102 896) | (30 575) | |
| Netto inntekt / Net revenue | $\overline{2}$ | 8 3 3 0 | 12 490 | 19 055 | 27 119 |
| Lønn og sosiale kostnader / Personnel expenses | (3 159) | (3 127) | (6778) | (6372) | |
| Andre driftskostnader / Other operating expenses | 3 | (4256) | (5794) | (8572) | (11464) |
| EBITDA | 915 | 3 5 6 9 | 3706 | 9 2 8 3 | |
| Avskrivninger / Depreciation and amortization | 4 | (5242) | (5249) | (10322) | (9898) |
| Driftsresultat / EBIT | (4327) | (1680) | (6616) | (615) | |
| Finansposter / Net financial items | 246 | (511) | 407 | (450) | |
| Resultat før skatt / EBT | (4081) | (2 191) | (6 209) | (1065) | |
| Skatt / Taxes | 898 | 14 | 1 3 6 6 | (234) | |
| Resultat / Net result | (3 183) | (2 177) | (4843) | (830) |
From the private placement on EuroNext Growth on February 22nd, 2021, until the end of august 2021, we have realised a growth of 25%, ending on 29.000 customers. From the start of the year, we experienced a decline in the number of customers, replaced by the following 25% growth. We are currently on a monthly basis delivering our sales targets but will not catch up the Q1 lag.
In addition, we have invested heavily in upscaling the technical department by engaging highly skilled staff to design the NextGen Platform. We have grown from 3 to 10 FTE during the last 12 months counting from the end of Q2-2020.
We are currently aligned with our budgeted assumptions for the net revenue per customer.
| NGAAP / NOK 1.000 / UNAUDITED | Note | Q1-2021 | Q2-2021 | $Q2 - 2020$ |
|---|---|---|---|---|
| Immatrielle og varige eiendeler / intangible and fixed assets | 1 | 54 776 | 62 398 | 44 422 |
| Utsatt skattefordel / Deferred tax benefit | 7616 | 8 5 1 4 | 6 2 6 4 | |
| Fordringer / Receivables | 2 | 37 693 | 28 608 | 16 439 |
| Kontanter / Cash and equivalents | 3 | 154 206 | 118 784 | 9451 |
| Sum eiendeler / total assets | 254 291 | 218 303 | 76 576 | |
| Egenkapital / Equity | 4 | 166 156 | 162 970 | 21 746 |
| Kortsiktig gjeld / Current liabilities | 5 | 88 135 | 55 333 | 54 830 |
| Sum gjeld og EK / Total Equity and liabilities | 254 291 | 218 303 | 76 576 |
The company is after the private placement securely financed and has a substantial cash portfolio of MNOK 119 by the end of Q2-2021. In addition, the balance sheet reflects an investment in our NextGen Platform as well as the customer acquisition cost.
| NGAAP / NOK 1.000 / UNAUDITED | Note | Q2-2021 | Q2-2020 | YTD Q2-2021 YTD Q2-2020 | |
|---|---|---|---|---|---|
| Resultat før skatt / EBT | (4081) | (2 192) | (6209) | (1065) | |
| Avskrivninger / Ordinary depr. and amortization incl impair. | 5 2 4 2 | (14.546) | 10 322 | (9898) | |
| Endring i arbeidskapital / Change in working capital | 1 | (23 720) | 18 277 | (6711) | 12 261 |
| Netto kontantstrøm fra drift Net cash flow from operating activities |
(22 559) | (20 605) | (2598) | (20846) | |
| Kjøp av varige driftsmidler og immatrielle eiendeler / Investment in fixed assets and intangibles |
2 | (12864) | (9307) | (24046) | (20, 467) |
| Netto kontantstrøm fra investeringer Net cash flow from investments |
(12864) | (9 307) | (24046) | (20, 467) | |
| Endring i egenkapital / Changes in net equity | 20 000 | 139 268 | 20 000 | ||
| Endring i kassekreditt / Net change in credit facility | 3447 | 3447 | |||
| Netto kontantstrøm fra finansieringer Net cash flow from financing activities |
23 447 | 139 268 | 23 447 | ||
| Netto endring i kontantstrøm Net change i Cash / Cash equivalents |
(35 423) | (6465) | 112 624 | (17866) |
The net cash flow from operating activities is MNOK -2,6. Main difference being the changes between the first and second quarter (called the electricity balance below). In addition, the negative cash flow from investments reflects our work in building a tech and sales organisation.
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