Scatec Swings to Q4 Profit on Solar Asset Sales and Divestments

The company’s quarterly revenue stood at NOK906 million, up 12% from last year


Norway-based independent power producer Scatec reported a net profit of NOK724 million (~$70 million) in the fourth quarter (Q4) of 2023, improving from a loss of NOK433 million (~$41.5 million) a year ago, as the company executed various asset sales in the quarter to streamline its operations.

The company owns and operates solar, wind, hydro, green hydrogen, and battery energy storage projects across the globe.

Scatec sold a 40 MW solar plant in Mozambique and divested 32% of its shares in Release, a solar plant leasing firm, contributing an additional NOK 532 million (~$51 million) to its net income in Q4.

The company’s quarterly revenue stood at NOK906 million (~$87 million), a 12% increase from NOK773 million (~$74 million) last year. The jump in revenue was positively affected by NOK75 million (~$7.2 million) in insurance proceeds in Ukraine.

Power production, however, reduced to 811 GW in the quarter from 979 GW last year, hit by the divestments of Upington in South Africa, Guañizuil in Argentina, and Mocuba in Mozambique during the year, and lower production in the Philippines because of El Niño.

Meanwhile, earnings before interest, taxes, depreciation, and amortization (EBITDA) in the Development and Construction (D&C) segment reached NOK7 million (~$671,000) from a negative EBITDA of NOK20 million (~$1.9 million) in the same quarter last year. The increase was driven by the implementation of the cost-efficiency program and strong gross margin.

Additionally, the construction of Kenhardt, the largest project in the company’s history, was completed and started commercial operation in the quarter. The project consists of 540 MW solar and 225 MW battery storage in South Africa.

FY 2023

For the full year 2023, Scatec reported a net profit of NOK1.12 billion (~$107 million) from a loss of NOK1.22 billion (~$117 million) a year ago, primarily driven by divestments throughout the year.

The company divested four solar power plants across South Africa, Mozambique, Argentina, and Rwanda during the year, contributing NOK1.27 billion (~$121.6 million) to the bottom line.

The company also reported a 13% rise in its full-year revenue, from NOK3 billion ($287 million) in 2022 to NOK3.4 billion (~$325.5 million) in 2023. The increase was attributable to high construction activity and positive foreign exchange effects.

Power production in 2023 was 3,615 GW, down 7% from 3,898 GW in the previous year. The change was mainly driven by divestments and weaker hydrology in the Philippines, partly offset by the Kenhardt project and increased production in Ukraine.

Meanwhile, D&C revenues reached an all-time high of NOK8.17 billion (~$784 million) in 2023 due to high construction activities in South Africa, Brazil, and Pakistan.

During 2023, Scatec also secured NOK2.7 billion (~$258 million) of growth funding from strategic transactions and raised $202 million in debt and equity funding for Release to accelerate growth.

“Throughout 2023, we delivered on our strategy, and I am proud of the achievements by our global team. We generated 3.6 TW of clean energy with no lost time incidents, while our power plants helped to avoid 3.9 million tonnes of greenhouse gas emissions,” said Scatec CEO Terje Pilskog in a statement.

Scatec’s net profit in the previous quarter fell 72% compared to last year on a significant increase in operating expenses associated with a claim from the National Irrigation Administration in the Philippines related to water fee charges for previous periods related to the lease of the Magat Dam.

While the war in Ukraine and lower water inflow leading to reduced power production in Laos in 2022 impacted the company’s EBITDA for the year by 11.7%.