ABO Wind compensates dent in German wind market with international successes

Despite serious difficulties in the wind energy industry in Germany, ABO Wind once again achieved a good result in the financial year 2018. The annual net profit of 12.7 million euros slightly exceeds market expectations. For the third time in a row, a surplus in the double-digit millions was achieved, the third-best result in the company's history. In 2017 (17 million euros) and 2016 (16.5 million euros), profits were even higher. ABO Wind’s project pipeline of wind and solar projects in development has expanded to 6,500 megawatts and is expected to generate rising surpluses in the coming financial years. The 2018 annual report in German is available for download (www.abo-wind.com/geschaeftsberichte). The English version will be available for download by mid-June (www.abo-wind.com/en/the-company/about-abo-wind/annual-reports.html).

Wind and solar parks in Germany, Ireland and France connected to the grid

In 2018, ABO Wind has built wind farms in Germany, Ireland and France as well as solar parks in Germany. At 71 megawatts, the total newly installed capacity was significantly lower than in the previous year (166 megawatts). In addition, 345 megawatts of rights to projects in development in Finland, Spain and Germany were sold in 2018. The agreements with the buyers stipulate that ABO Wind will continue to work on the majority of the sold projects, connect them to the grid and retain a share in the value added.

Projects in progress in 16 countries on four continents

Once again, ABO Wind generated more than half of its turnover of 150 million euros (previous year: 147 million euros) abroad. In 2017, international markets accounted for the majority of business for the first time. Major contributions in 2018 came from Germany, Finland, Ireland and France. To a lesser extent, Spain, Argentina and the United Kingdom contributed to the good business year. ABO Wind is currently developing wind and solar parks in 16 countries on four continents. In all markets, ABO Wind has secured new projects in 2018 with a total output of more than 2,000 megawatts, one third of which was solar power and two thirds wind power.

The staff, which have grown to around 550 employees, have created the conditions for generating profits in numerous other countries in the coming years. For example, ABO Wind was awarded a tariff for wind and/or solar parks in tenders in Greece and Tunisia. In Hungary, too, the company has solar projects with secured tariffs, which are either construction-ready or currently in the construction phase. In Iran, ABO Wind has discontinued project development due to the lack of prospects of financing for new wind and solar parks. Nevertheless, there are still some employees in Iran who are responsible for the operation of the Saidabad solar park, which was erected in 2017.

Wind energy in Germany suffers from lack of permits

The expansion of wind energy in Germany collapsed in 2018 and has decreased by more than half. Authorities continue to approve only a fraction of the projects that would be necessary to expand wind energy to the politically desired extent. The governing coalition has set up a working group to find solutions to the problems of lacking permits. Even a short-term improvement would not yet affect the 2019 additions, so the industry expects a further decline this year.

Lighthouse projects implemented  

Despite the difficult situation in the domestic market, ABO Wind succeeded in generating a good annual result in Germany in 2018 with lighthouse projects. These include the Forst Briesnig wind farm in Brandenburg. On a former coal mining site, the company's experienced construction engineers erected five wind turbines with a total capacity of 16 megawatts under difficult conditions. With the technically sophisticated substructure, ABO Wind has recommended itself for further tasks of this kind.

The repowering project Wennerstorf has also attracted a lot of attention. At the site south of Hamburg, ABO Wind replaced four turbines erected in 2003 with a total output of 5.2 megawatts with two Nordex prototypes with a total output of nine megawatts. The manufacturer used the pilot project at the recent wind fair in Hamburg to show interested parties the new model in action.

Convertible bond in demand

ABO Wind's strong international position also convinces investors. In recent months, investors have subscribed to the company's convertible bonds for a nominal value of around 11.5 million euros. The bonds can be exchanged for shares in October 2019. The recent positive development of the share performance suggests that many investors will make use of the conversion option, which would lead to a further strengthening of equity. Equity currently amounts to around 89 million euros. The equity ratio is a solid 46 percent.

Proposed dividend of 0.42 euro per share

At the Annual General Meeting on Thursday, 22 August, the Management Board of ABO Wind will propose a dividend of 0.42 euro per share, which is five percent more than in the previous year. This corresponds to one quarter of the consolidated net income for the year.

Management Board expects growing profits

For the coming financial years, the Management Board expects growing profits. "The long-term average is expected to increase by at least ten percent annually on the basis of the figures for 2018," says Managing Director Dr. Jochen Ahn. Fluctuations in individual years could not be avoided in the volatile project development business. "By 2023 at the latest, however, annual surpluses of more than 20 million euros should be the rule."

While the longer-term forecast is naturally subject to uncertainties, business transactions already concluded strengthen expectations for the current financial year. "Among other things, the project sales in Spain and Finland make us very confident," says Dr. Ahn.

Room for improvement in Germany  

In the medium and long term, ABO Wind also expects growing installations in Germany. Without an accelerated expansion of wind energy, it will not be possible to shut down the seven nuclear power plants that are still online and to phase out coal-based power generation. "Since there is a broad societal consensus for both decisions, it is the task of the German government to implement them," emphasizes Dr. Ahn.