Alteo holds its ground in the deteriorating operating environment
The latest figures are out
This year, Alteo's revenue decreased compared to the first half of last year,
mainly due to the significantly lower energy price environment,
although the company reported a minimal (1%) increase on a quarter-on-quarter basis. The decline seen compared to the results in the high energy price environment was somewhat offset by the Retail segment, where revenues were higher thanks to a larger electricity portfolio, and wind power revenues also increased due to exceptionally windy first quarter weather, according to the company's presentation.
The turnover development was tempered by various operating costs:
- Material costs: falling energy prices are also being felt here, especially in the market for systemic services with high margins (lower material costs compared to revenue), Alteo says. Expenditure increased in proportion to sales due to the significant portfolio expansion in the retail segment.
- Personnel costs: the increase in costs is mainly due to the increase in staff needed for growth, the labour market situation and long-term incentive programmes.
- Depreciation: depreciation exceeds the 2023 level, in line with the higher asset base.
- Other revenues and expenditures: the increase in other revenues was due to
the improvement in the scheduling accuracy of Renewable Generation Management and the lower scheduling surcharge as a result of the compensatory price cap introduced by state energy transmission operator MAVIR in December.
Overall, Alteo's revenue for the second quarter of this year was HUF 23.1 bn, a minimal improvement compared to the same period last year, but the combined result for the first two quarters was significantly below the Q1-Q2 2023 figure (HUF 49.8 bn vs HUF 58.9 bn, -15%)
EBITDA for the second quarter exceeded HUF 5.2 billion,
a 7% increase compared to a year ago.
However, the combined result for the first two quarters (HUF 9.8 bn) is 24% lower than the consolidated result for the comparable period.
Az energiaárak változása negatív hatással volt a rendszerszintű szolgáltatások piacának áraira, ami kedvezőtlenül befolyásolta a társaság legjelentősebb eredménytermelő szegmensének, a Hő‐ és villamosenergia termelés és menedzsmentnek az EBITDA-ját.
Net profit fell by 34% to HUF 5.8 billion in the first two quarters, but in the second quarter alone, profit increased by 1% to HUF 3.2 billion.
Alteo shares are currently down 2.2%,
but gained 57.9% this year.
Management assesses the results
"Alteo's long-term approach, its continuous search for investment opportunities, its strategy based on sustainability and the expansion of renewable energy production, its diversified portfolio and its outstanding team of professionals have enabled it to
stabilise its performance at a higher level than before the energy price explosion of 2022,"
Attila Chikán Jr., President and CEO of Alteo Group, said about the results. According to him, investments and acquisition activity will not stop for the rest of the year and will continue with the same activity as in previous periods.
What happened in-house?
During the quarter and after the balance sheet preparation, the following major events took place at the company:
- on 19 April 2024 the Annual General Meeting decided to pay
a dividend of HUF 4 billion gross and a further gross extraordinary dividend of HUF 4 billion.
- On 27 May, Alteo's subsidiary and Mol signed a 10-year service contract for the utilisation of high inert natural gas. The service includes the preparation and transportation of the high inert natural gas extracted from the gas wells in Csombárd for transport, as well as its extraction at the Mol site and delivery to the combustion plant. Alteo is investing around HUF 820 million to provide this service.
- On 28 May, Scope Ratings conducted its annual review of the credit rating of Alteo's bonds issued, as a result of which the rating remained unchanged, Alteo as issuer and the bonds remained in the BBB- category with a stable outlook.
- On 24 June, the grant agreements announced in the Recovery and Resilience Facility (RRF) tender were signed, under which
several subsidiaries of Alteo have been awarded a total of HUF 9.4 billion in grants, for a total value of nearly HUF 28 billion.
Alteo has committed to operate the subsidised storage facilities for at least 10 years, for which the tender provides 10 years of fixed revenue-based compensation per storage capacity. The tender requires the operation of the storage facilities to start by 30 April 2026 at the latest, so that the conclusion of supply contracts and construction works will start in the second half of 2024, the company said. - On 26 June, Alteo adopted the 2026 MRP General Remuneration Policy, which provides benefits to a wider range of employees if the objectives are met, and the 2026 Executive Remuneration Policy, which is designed to incentivise the CEO and Deputy CEO.
- On 08 August,
Alteo's largest solar power plant, with a capacity of 20 MW, started operating in the Tereske area.
Cover photo (for illustration purposes): Getty Images
