EDP Renewables, S.A. (EDPR) Earnings Call Transcript & Summary

Hello, and welcome to the EDPR 1Q '20 Results Presentation. On the call with us, we have João Manso Neto, CEO; and Rui Antunes, Financial Planning and Control, IR and Sustainability Director. I will now hand the call over to your host, Rui Antunes. Thank you.

So thank you very much. Good afternoon, ladies and gentlemen. So today, we have our presentation for the first quarter results of 2020. During these challenging times that everybody is living, we'll go through, as usual, the presentation. We'll have some highlights and some discussions about the business plan, some deep dive on the results, conclusions and thereafter, we'll have the Q&A session for you to be able to ask us questions. So we'll start with the introduction, and I pass the word to Mr. Manso Neto, our CEO, that is with us today.

Good afternoon to all. So thank you very much, Rui. So as Rui Antunes has just said, we are in the challenging world. And our challenge during these 3 months of the year was really to deal with COVID, which is really the most important issue and that we have to be the first thing to think about in this management, but at the same time, keeping the company rolling and keeping the implementation of the business plan as usual. So doing the 3 things at the same time was our duty, and I think this is what we did. And I will try -- we'll try during this meeting to address all the 3 issues. So regarding -- moving to Page #5, and regarding the results, it's difficult to compare 1 year with the other as we had an important stage of the portfolio with the slowdowns that we did. Nevertheless, what I can -- as the main picture is that notwithstanding the low wind resource that we have in this quarter. We were able to not only to have a growth of EBITDA on a comparable basis 1%, but also net profit of 2%, which shows the resilience of the company. And why did we do it? Let's say in terms of load factor. The load factor was at the same level of last year, but only 90% of what will be the normal one. The availability was kept at the same level of last year at 97%, which I will come back again to this, but this is to prove our ability to deal with the COVID also in terms of the operational, continuing the revenues because of the change of perimeter reduced 7% on a comparable basis an increase of 6%. The megawatt -- the reduction of megawatts has represented less EUR 45 million in terms of revenues. The NCF EUR 16 million, and which is the positive side and has to do a lot with our strategy, the price had an increase of EUR 15 million. Being this increase of price can be -- seem to be not obvious for somebody who comes from outside. But in fact, it was not by chance, has to do with a lot with our strategy of hedging that we have been following from the beginning. And in fact, our price was flat year-on-year. But if you consider the change of the mix of the portfolio had an increase of 2% in terms of the sell down. In terms of the cost, there is an increase in cost of 4% per megawatt, which is perfectly normal as we have -- we are preparing ourselves to the expanded growth. And within spending growth, not to forget that we have 1.3 gigas under construction. And of course, if you have -- if you want to put in place in the next months is 1.3 gigas, of course, we have to have the people in advance. It's obvious. But coming back, the results have to do strongly with the fact that we are not exposed. The pool price, in fact, 94% of the revenues are already fixed for 2020, and we will see that, that will happen also in the following year. In terms of the growth. So in terms of the performance of the activity, we're being able to keep a small increase on the profitability, notwithstanding a decrease in the load factor. In terms of the growth, either 2 or 3 numbers, which are very important from one side, that we have already -- we have 827 megawatts built in the last 12 months. 1.3 sold out, as you know, from previous information and very important to have this moment, building 1.3 gigas in constructions. And very important, the fact that we have been able to reach 83% of projects secured -- procured means we carryforward long-term agreement, meaning 5.9 gigas of the 7 gigas that you have promised until 2022. Meaning more than 2 years in advance, we have already reached 83%. Besides that we materialize the joint venture with ENGIE, which was cleared by European Union and already working. And so as I told you, in terms of comparable basis EBITDA, 1% per annum, and net profit, 2% per annum. In terms of the self-funding, in terms of our ability to raise funds. As you know, in '19/'20, we have casting EUR 1.2 billion of sellouts -- of sell downs. The net debt and EBITDA is practically flat compared, including tax equity invested radically flat comparing with last year, EUR 31 million plus notwithstanding the foreign exchange translation. And important is that cost continues to be reduced, notwithstanding the different mix with more -- with less skewers and more of the -- other countries and currencies with higher yields like dollars or reais, the debt is now -- the average debt cost is about 3.8%. And the tax equity cost is being kept at 6.6%. So meaning that notwithstanding the low end, we were able to keep the company from one side with a positive evolution in terms of operational results. On the other hand, EBITDA growth continues either in the short and in the medium term. And finally, in terms of financial structure, we have -- continue to have a solid position and being able to keep our program of assets rotation attracting new clients. As I told you in the beginning, and moving to Page 7, when the COVID begin to be obvious, it was a problem. We were one of the first companies to decide to take clear measures with our first objective is to protect the half of our employees. And so within the year, early March, we decided to put -- to give -- to ask all the people who are not in the functions, which required to be the present in-home working and also in-home office. So about 80% of our employees in-home office, only 20% are in the premises or in the wind farms and keeping, of course, guaranteeing all the security measures. So this was something that we did from the beginning. I would say that the people reacted very well. And in fact, our IT system was very efficient in what concerns the possibility of having an efficient home office. One thing very important in terms of employees, we kept completely unchanged what everything that we thought about human resources policy. In terms of hiring as you know, with this business plan, we need to have good human capital. So we did not stop at all the hiring system, the promotions, the mobilities, the training, of course, more on e-learning. Nothing was impacted. So keeping the situation normal for our employees was enough. On the other hand, of course, we are not isolated from the world, so helping the communities with whom you are and what is also a must. So we made several donations, about EUR 700,000 -- almost EUR 800,000. And basically, our decision was not to make big donations, but basically, as we are a company, which is don't -- it has to have good relations with the committee, which was a very decentralized support of the communities we need. On the other hand, in terms of the business, we also supported our suppliers, either in terms of the ones with the technology companies, and we try to reach the best understanding in terms of adjusting ourselves in our business CapEx to the supply difficulties, but also the small companies, our suppliers of O&M to whom we gave -- we work very closely with them. I could say very clearly in that the impacts in terms of the day-to-day business, either in terms of dispatch or in terms of O&M, was very strong. And as you have seen, we kept the levels of our ability of last year 97%, which is critical proved that what -- that we were able to with no problems to keep the operations working. Well, the question now, but does the COVID affected our company? And this is a question which was asked from the moment. And frankly, my answer is very clear. In terms of the long-term not only does not affect, but I would say that this COVID shows the need not only obvious -- confirms not only the needs of real investments of sustainable economy, but as all the economies need additional investment, I would expect that the growth of renewables in terms of the worldwide and so also for us is going to be even faster than what expected. There is no way of increasing and recovering the GDP, which was lost then without investments and the investment make for instance. And what makes sense, namely is the green energy. So the market is going to be there. On the other hand, as you know, our policy is always to work based on long-term agreements. So we are not exposed to the pool price. As we saw before, 95% of the revenues are contracted for 2020, 92% to '21, and so we keep always a very stable source of income and that one, why because we never invest without having a long-term agreement. It's our own decision. On the other hand, still long-term for one size, the green economy is there, long-term agreements are there, and they will not expose the full end of -- on the other hand, as our revenues are stable because they are based on long-term agreement, we see the demand for assets -- from our assets is very strong, either from the point of view of investors who may buy minorities or majorities. Now our assets or the tax equity investors, which finance a very important part of our loans -- of our needs in U.S. But I can tell you that, as you know, we have an important program of sell-downs in terms of this year. We are acquiring not -- according to the objective data that you have, the demand is going to be very interesting -- with very interesting prices. On the other hand, for 100% of our needs in terms of tax equity for 2020, we have signed with an institutional partner, a letter of intent for 100%. So you can see that the long-term is there, nothing to change in terms of long term. So the market is there. Long term, not exposed to pool prices. We will have demand from investors, either tax equity and common invests. So -- and what about the short term? I would say, that we'll be very clear on this. In terms of when the crisis began, we were not -- we could expect that we could have some problems in terms of operation maintenance. And really, until now, the experience is very good. Only 0.1% of our fleet has been affected by the delays because of the coronavirus, just 1.1%, which is almost immaterial. On the other side, the balance, the suppliers, which I thank very much have been very professional and having able to do that. And what about the investment? Let's see, everybody knows that there is a global -- some disruptions in the world channel of supply. So I cannot exclude that in one case or another. We may have a delay of some projects of 3 months, 6 months. But very clear, 3 or 6 months delay does not impact the economies of investments, which have 30-plus life -- economic life. So we may have some delays, but nothing which materially changes the fundamental of those investments. We can later on speak more about this. But clearly, we are facing the delays. As I told before, we have also to be cooperative with our suppliers, and that's the business -- that decent business managed like this. But nevertheless, nothing that will change the economy. On the other hand, in terms of growth, of course, not being able to travel is not the best thing in the world to do new business. Nevertheless, we are continuing to do this business. And during this quarter, we were able to secure additionally 500 megawatts of new projects. And you can see in Page #9, the description of this, you see, in this moment, and this is verified, in Italy, Mexico, Spain, U.S., Brazil, so we were able -- this quarter to secure -- this until the beginning of the year to secure about 500 megawatts already secured, which brings us to the -- this interesting number of about 83% already contracted. As you remember, when we disclosed the business plan 10 months ago, we had 40%. So we've more than doubled and keeping our profitable criteria. As you can see, the secured capacity is evenly split between the years. This year is going to be an important year in terms of installations that I told you, we may have 1 or 2 projects. We can be delayed to the first quarter of next year. But frankly, this matter has impact the economies of the translation. So I think that besides being able without notwithstanding the -- if you -- wins -- the less -- having lower wind than usual, strong ability to keep a positive increase in net profit. The operational activity totally under operation and the business plan in terms of the growth continues. All this respect the most important values, which have to do with our stakeholders. Firstly, the workers, the communities and all the other stakeholders have been in the business and the suppliers. So having said that, I will ask Rui to give us more details, namely in what concerns the first quarter results.

Okay. Thank you, João. So now I'll turn to the first quarter chapter to go more into detail through the numbers and the performance in the quarter. We go to Page 11. Page 11 is the page where you typically show the capacity, the megawatt evolution of EDPR. So today, we have a total installed capacity of 11.2 gigawatts after the sell-down transactions that were done in the last 12 months. We can see in the chart that we installed in the last 12 months, 827 megawatts, and we sold at EBITDA level, 1.3 gigawatts. Within this 1.3 gigawatts, we have a wind farm in the United States that was part of the transaction signed in 2019. We have the big portfolio in Europe of almost 1,000 megawatts, on which we only had ownership of about 51%. So in net terms, we are only selling here or only sold here about half of 1,000 megawatts. And we have the project in Brazil, which had the financial conclusion in the first quarter of this year. So today, 1.2 gigawatts of installed capacity, and we have under construction 1.3 gigawatts, more than 800 megawatts in the United States, 150 megawatts in Europe and 330 megawatts in the offshore business, we're concluding the WindFloat Atlantic in Portugal. So wind offshore floating projects. And we have under construction, the project in the U.K., the Moray East together with ENGIE. Moving to Page 12. So this is the picture of the load factor. So yes, we are -- it's our business, we are exposed to the wind resource. The wind resource in the first quarter of the year was not good. We have a 10% deviation, a negative 1 vis-à-vis a normal quarter that we expected. So 10% has impacted mostly Iberian countries, Portugal and Spain, and specifically the eastern regions in the United States and some central regions as well is where we have most of our portfolio. So EDPR was impacted this quarter by the low wind resource. Nevertheless, availability levels were kept at close to 97%. So almost in line with what we have in the last -- in the quarter of last -- in the same quarter of last year. Moving to Page 13. Electricity output. Here, we have a decline of 8%. Of course, this was affected by the assets that were sold throughout the last 12 months. If we exclude this impact, electricity output will go up by 2% when we compare last year. So we see clearly here on the left, European output went down by 20% because of the 1,000 megawatts that were sold. In the United States, we keep building new projects, so electricity production went up by 5%. And in Brazil, besides the low wind resource, we also have the sale of that project in Brazil, the 137 megawatts that was sold there. So all in all, we produced 7.8 terawatt hours of cleaning electricity, a plus 2% if we exclude the sell down, and we avoid 5 million tons of CO2 emissions. Page 14. So average price stood at EUR 56.2 per megawatt hour, flattish when we compared with last year. But if we exclude the changes in the portfolio due to the sell down, prices went up by 2%. So this was driven mainly by the good performance that we had with the hedging coverage. And mostly in Spain, that we have the financial hedge and the regulatory hedge. This gave us more EUR 33 million year-on-year on the hedge front only when we compare with the same period of last year. Also in U.S., very important, most of the sales are hedged there. And despite of the decline on market prices, the prices in U.S. were kept very stable when compared with last year. And then even with new megawatts that typically have a better performance and don't require such a high price as the old ones. So there's a mixed effect because we sold some assets in Europe, those 1,000 megawatts. But if we were to take that out of the equation, prices went up by 2% when compared with last year. Page 15. Moving to the revenues. So revenue is down 7% on the reported revenues, excluding sell down, up 6%. If you look to the reported figures, they go down 7%, mostly because of the volume and because of lower electricity production. This takes out about EUR 61 million because of assets that were sold and a slightly lower load factor than last year. That last year was also a low wind period. This was offset by better selling price, plus EUR 15 million and also the strengthen of the ForEx, especially the dollar vis-à-vis the euro due to the translation effect, we bring EUR 12 million more when we compare with last year. Page 16 on the costs. So costs went up by 7% total cost, if we include noncontrollable ones, which are the taxes, local taxes and nonrecurring costs, if you go to the controllable ones, the core OpEx is went up by 5%. If we take a look at the core OpEx per average megawatt, and we adjust as well by the fact that we have asset sales. And if we're just by ForEx as well, this went up by 4% when we compare last year. So the 4% seems that is a number that is higher than the expected flattish performance that we expect throughout our business model, a slight decline that we still expect but this is a quarter that is being impacted by the lower number of megawatts that we have today, and we believe that this will be diluted once these megawatts come into operation. And we continue to believe that we are in line with our expectations by the end of the year. So it's normal to see some upfront costs for the growth. Our business plan is very ambitious. We need some to have upfront costs for us to comply with this. But once the megawatts are become online, those costs will be diluted. So this is a temporary effect that we might see. It's still going to be lower than the 4% for the full year. Actually, on the first quarter, we are behind where we are -- compare favorable to our internal budget actually. So it's nothing that is a surprise with compare favorable. And we believe that this number, reported figures should go down throughout the next months. Page 17. EBITDA. So total EBITDA of EUR 340 million, minus 12%. Of course, the sales of the assets impact about EUR 50 million here. Excluding that impact, EBITDA went up by 1%, which is during a period with very low wind conditions. It's positive that the company was able to deliver slightly positive performance year-on-year. On Page 18, net profit of EUR 62 million. It's a slight increase when compared with last year during this period of low wind resource. Where I saw the EBITDA that is negative, mostly because of the asset sales, that should be offset throughout the year once the new megawatts come online. But also that depreciation and amortization are lower because of the same reason. Financial results are lower because with the asset sales, we are still reinvesting all the funds that -- the proceeds that we received from those sales. So our net debt is lower, and our cost of debt is also lower. We are benefiting from renegotiations of our debt, the stock of our debt. And also lower taxes, we have an effective tax rate of 9%. We have had some taxable costs that did not impact the P&L, but we benefit that in terms of taxes when we need to pay taxes to the tax authorities in certain regions, which is also a good performance on the tax front. All in all, EUR 62 million positive performance during some very challenging periods with very low wind conditions. Business on the top line in terms of the decline of market prices was not affected. And also in terms of operation, business was -- is not being affected by the disruptions of the COVID-19 situation there the availability of losses is very low. So the results are mostly affected by low winds and the asset sales that we did. These are the 2 drivers that affected the first quarter. Page 19, to end the discussion of the results. So in terms of balance sheet and cash flow, cash flow we generated in terms of retained cash flow, about EUR 219 million, cash investments of EUR 176 million, have some impacts of cost of goods translation of the debt in dollars to euros and tax equity from dollars to euros. And when we compare with December, our net debt plus tax equity is mostly flattish, I would say slight increase of EUR 31 million when compared with December '19. Important to highlight in this period is the fact that we are able to close late March 20 $149 million of tax equity for projects that come online by the end of the last year. So it's important to get those funds coming in already in the periods of market turmoil. And already in April, we were able to sign a letter of intent for 100% with an institutional partner for 100% of our 2020 project. So we have -- our growth is secured for tax equity at this moment. So it also demonstrates the confidence that our institutional partners have on the business in the United States and EDPR as a partner.

So thank you very much, Rui, for this explanation. So trying to conclude before going to the Q&A. I would say that probably in the beginning. So this quarter was challenging. We were able to show that a company like us is able to do to work in a situation of crisis, addressing first with human right. But at the same time, keeping the company operating with -- even with a not good wins but operating with increase of the profitability, and mainly keeping the ability to continue to grow. So not repeating the net income positive evolution. The growth continued with 500 megawatts even to date, 83% guaranteed. And frankly, the business model of the company is strong. And we do believe that we are very well prepared not only to keep with our strategy but also to take profit from opportunities that -- additional opportunities that I do believe that will occur when this prices normalize. But again, we are not expecting the end of the crisis to do the things we have to do, either in terms of relation shareholder -- with stakeholders either in terms of operating and the investment opportunities, either in terms of creating new growth opportunities. So thank you very much. So now we will be delighted to answer to any questions that you may have.

[Operator Instructions] So the first question comes from the line of Manuel Palomo from Exane.

Yes, I've got a couple of questions, I mean, so I guess, the both of them, to some extent, related to the COVID-19. The first one is about the U.S. and about the PTCs. If I'm not wrong, 2020 is the last year in which projects will get 100% of the PTC. I wonder whether these potential delays could impact some of the U.S. assets, number one. And if companies, if the industry is already maybe loving in order to get an additional extension, what is your view regarding the -- maybe cancellation of projects, maybe it's not the case of EDPR, maybe it's the case of others, and that could bring, I don't know who knows M&A opportunities at some point? And second question has something to do with the COVID-19. I wonder whether you have to received any material slowdown in the PPA market in any particular region that you are exposed to. And regarding to this and related to Iberia, whether you think that the PPA market is going to be a significant source of growth or whether you believe that auctions will be needed in order to achieve governmental targets?

So thank you very much. Regarding PTCs, you are right that the PTCs, that the projects to have 100% PTCs must be concluded until the end of the year. However, even with the current -- even with the current situation and are not speaking about any change in law, it can be prolonged provided one instead of using the road of safe harbor, if we use the road of continued efforts. And in all of our cases, the projects that we are developing are clearly projects that could be eligible for our continued efforts, because the construction is running in all of them. Second point, according to the present regulations, and this is written there, that the 4 years that the treasury defined to have the -- to be able to recover the 100% can be extended if there are what is written in the regulation excusable events. So if there are excusable events and obviously, COVID is an exclusive event, it happens. So I would say that our base plan is to conclude that all the projects that we are building in U.S. during the 2020. However, if there is some delays of a few months, even with the current legislation, we have ways of protecting the full value of this. So frankly, even with the current regulation again, we'd either -- we see -- so we are very confident on this and really thinking that if PTC, if COVID is not excusable event, what it is? And frankly, I think nobody could speak another way. Respective of that, on top of that, it's true that they are -- the industry is trying to persuaded either the treasury or the political will in terms of extending the PTCs for 1 year in order to enable the conclusion of the construction but again, we are not based on that. If it happens, it's fair. I would say, it's fair. However, because it's true that there is -- the COVID has impacted I talked from the beginning on the event. But even if that's not happened, either through the continuous effort route, either through the false measure or this excusable event route. If we -- frankly, we are totally confident that 100% PTCs will happen. If we are not going to cancel any projects, no. There is no reason for that to have the BOP is reinforced. All the 1.3 gigas includes the project in U.S., which are being built. So no discussion. Everything was actually allocated to the BOPs to the supplies of the turbine. So from our side, no. If you ask me if we have everything -- as you know, we have the projects financed as we, Rui and myself told, we have a letter of intent to finance 100% of our portfolio in good conditions, which is in good condition, even better than previous years. And so we have all the conditions to do it. If you tell me, well, some small developers may be affected. If there are some opportunities of M&A, as you understand, we are always looking to good opportunity in the market. So we are -- our growth is not going to be based on M&As. But from time to time -- we don't -- small things, of course, projects, not big transactions. We can look at that. But frankly, our business case and what we showed is basically based on -- basically on the growth of the projects. PPAs, if I see a slowdown of PPAs. Especially, in moments of confusion can happen mainly from less sophisticated capital. However, what I can guarantee you is that the major -- the normal offtakers, namely the big multinationals are keeping with their programs of acquiring power in the long-term. And in fact, as the power prices went down, I would say that what we see is that in many cases, the suppliers are there -- the offtakers are there either in Europe or in U.S. And in U.S. besides the normal, the private suppliers, what we also see is that the trend, which is inevitable of replacing coal by renewables continues, and we have been able in the last months to participate in several RFPs and in many things, in several cases with good opportunities to win providers with our good projects. So I don't see -- we can -- from less sophisticated offtakers, it's possible from the more sophisticated, we don't see the big companies continue to, in fact, with the lower prices, perhaps they are even more incentivized. There are several multinationals, which are making multi programs -- multi-country programs in Europe, namely covering Italy and Spain, material RFPs in the market. And so we don't see any slowdown on that. So even today, we have made a bid. So several things moving at the same time. Specifically about Spain. Spain is the market in which I'm seeing this big company are making multi-country approaches, including Spain, which for us is good because it's a country where we have a good pipeline. And what PTCs, that they are demanding, of course, but they are professional again. They are not required strange models. They are very often prepared to buy on the pay as producer is very important. So I see Spain is an important market in terms of PPAs, and that is good for a company like us with good results. Different question. And so I do believe in the PPA market also in Spain. Different question is PPAs are enough to reach the objectives of the Spanish government or European government? I would say, no. And I keep this my -- always -- what I've been saying, we need to, at least in the beginning, long-term CFDs is the solution for a very important part of the energetic transition because it's a simple way, market one, the one who has the best prices win. And then I see that lead in all the countries. What I am seeing is that other countries keep with their programs, Italians today in this month, an Italian office is running. There were some delays of a few months in some of them. But Poland has already notched. And so I see in most of the countries moving towards single things, which are the CFDs, long-term CFDs, 15, 20 years. And I do believe, and it's not an opinion, I think the Spanish government has stated several times that they also do intend to go through a simple model of CFDs. And this is a simple model with CFDs, we would be delighted to participate in. So I would say that private PPA is very important, the market is not bad. On the opposite side, sophisticated buyers are in the market. Now but that does not prevent the need for PPAs, for CFDs organized by the government. But simple one, the simple one don't complicate, without any complication.

The next question comes from the line of Sara Piccinini from Mediobanca. .

I hope you and your families are all well. My first question is about the profitability of your projects. So if in this current environment, you see the possibility to maintain your current criteria of IRR of 1.4x the WACC. Because I'm thinking about, for example, PPAs, are you seeing a pressure on prices because of the low commodity prices environment? And so maybe offtakers asking you for lower prices because they see prices in the market very low. So are you comfortable to maintain the level of profitability of your projects? This is first question. Second question, you actually answered, but if you can provide more details on the auctions, you expect to participate this year. And if you expect any delay probably that they will go through the end of the year. And so they will put your CapEx at risk because of these delays in the auctions. And in this regard, if you can say how much of your CapEx in terms of percentage could be at risk for this 3 to 6 months delay? And final question is about offshore. So if the current situation is putting a riskier plan for offshore development, and if you expect for this year any offshore auctions to which you can participate?

Thank you very much. Firstly, I also expect that you and your family are fine in this situation. And let's say, profitability, we keep your policy of 1.4 as a rule. And so there is demand of there is, in fact, the price in the short-term have gone down. But again, I would say that the fundamentals in terms of the evolution of long-term prices, it did not change so much -- or did not change, I would say, the long-term views of the prices did not change because of co-virus. It could change because of other reasons, but not because of co-virus. The co-virus has an impact direct in the short term. So it's not going to be a material impact in the long-term. The prices have even before co-virus, the price has gone down. We have been able to keep the profitability. And now it's not because of the lower pool prices in 2021. That will change. And in fact, as I repeat, we are not exposed to this lockdown in the short term. So objective in terms of profitability. We'll keep it. Auctions, as I refer, auctions are important as a complement for the PPAs. But there are 2 things, the existing of PPAs is a new opportunity to grow. And so in a certain way, the existing of prior PPAs in the long-term, in a certain way, makes the companies less dependent on the auctions. The auction say that all before are fundamental. But having PPAs, it's another alternate of doing it. Let's see, auctions. There are several actions that we expect to occur this year, Italy, I have spoken about that. We expect another one in Greece. We expect in Poland, we expect in Portugal and in Brazil. We are prepared to participate in all of them. With less or more so, but we expect auctions where prices seem to be delayed roughly. In the short term, the direct impact was a delay. For instance, as far as we remember, the requirement was delayed was to be in June and was delayed a few months, or 1 of the French was delayed. But for the Italy, it kept and my belief, and when we speak with even myself with the European Union, decision-makers, what we tell to all of them is that if we want, and everybody wants to have a quicker recovery of the economy. We cannot delay the jobs. They should not be delayed because if a delay means -- a delay investment means a delay in purchase, a delay in jobs, everything there. And so I would say, I would not take, as I -- we can have a delay of 3 to 6 months, but no more than that. And really, if I had to bet, I would expect for probably in this translation next year. But you can ask me what would happen if there is 3 to 6 months delay in our business plan, I would say, 0. Let's see, when we have 83% of our investments -- of our CapEx already committed, really the probability that we will find other ways of doing it until '22 additional projects is not 100% but it's perhaps more. So really, it's -- so it's -- from a point of -- as a citizen of Europe, I would say it would be a strong mistake to delay, but in terms of impacts nothing. In terms of offshore, if there will be offshore auctions this year, perhaps not with the exception of that auction, which already occurred, we don't expect nothing special, but we did not expect already, perhaps there will be something in New York, perhaps it happened in New Zealand, if there is a lot more this year. I don't expect, but if nothing has to do with co-virus. It's not because it's not -- because it was not programmed for next year. What we can say and this is very interesting is that more and more national plans offshore with the big emphasis, all of the plants, including countries like Spain. If you look at that before, we have 0 about offshore. And now we have there, as in France. And one thing which is risk, now they have offshore in their plan. And one thing which is very interesting is that we are not just speaking about a fixed offshore but also floating. Floating begins to be in the front, in the priorities of the government, which I think, again, it's very important because of floating is the only way of doing materially offshore in many places of the world. That we have, as I have said several times, without economies of scale, we won't reduce without volume, we want to reduce the cost of having this real in many countries, namely in Spain or in Greece or besides France, it's very important. One thing that I would call your attention that in the discussion papers that are being treated in U.K., they begin to speak about having a special bucket for floating offshore. So being our company, EDPR, one of the leaders in terms of offshore being -- having made the biggest operating project in the world, in this moment, I would say that we should be well placed to this wave of the floating offshore.

The next question comes from the line of Arthur Sitbon from Morgan Stanley.

The first one is, could you provide us a bit more detail on the impact of the current situation on your sell-down program? And basically, what are your expectations for the contribution of the sell-down to EBITDA in 2020? And my second question, I was wondering how do you see the competitive environment in renewables evolving over the next few years given the COVID-19 outbreak? Do you think over the medium term, long-term, it could actually ease competitive pressures in the market?

So this is regarding the sell-down. What I can tell you is that, of course, we have a EUR 4 billion divestment program until 2022. We did last year, EUR 1.2 million. This year, we should also have important programs that they are running in this moment. They are running. And what I can tell you is that the indication in terms of interest of investors are very strong. Very strong, not perhaps better than what we could expect. They are very strong. And you can ask, are we surprised? No, we were not surprised. When there is a crisis, we can have some nervous positions from less sophisticated investors. The sophisticated investors know that good assets, long-term contracted interest rates will continue to be low. So it's normal, really it's normal that will have a good result with our program, at least in line with what we expected. And as we did not -- I think we have now disclosed what we expect about this. So I'm not going to disclose but I would say that perfectly in line or even better than what we thought before. Regarding the other issue, about less competition in the long-term, let's see. I would love to have it, but I had to be realistic. I think the investors have, as -- at least as intelligently, we are, and they know that renewals is the future. So we'll have competition. And again, saying that there will be no competition in the future. It's refueling ourselves. The competition will be there. So what we must be able is to continue to be different. In terms of adopting new technologies -- the new mixing technologies being flexible, having a good pipeline, we wouldn't take connection. So we don't expect our life easier in the long term. So we have to keep with our policy of trying to be better than the others. On the short term, it's possible that as we referred to a previous question, that's a little less weak, less strong investors may have some problems. If the opportunities arise, we will try to take profit from that. So in the short term, perhaps some opportunities may arise. So I don't exclude that, but -- and will -- if they arise, will be -- we are here not to lose them. But in the long-term, our challenge are there, and we don't fool ourselves. We know that we have to continue to be better and to differentiate from the other.

The next question comes from the line of Jorge Guimarães from JB Capital Markets.

I had 4 small questions, if I may. Firstly, in looking at the wind resources, this is the fifth quarter in a row at least where wind resources are significantly below average. Could we be seeing a change in the wind patterns, namely in Iberia? It would be the first one. Second, is it possible to detail what to -- is your expectation about the full year OpEx evolution? I believe Rui in the call mentioned that Q1 should not be repeated throughout the year. So if you could detail a bit your view about that. The third one is when you mentioned about short-term delays, what could we be talking about? Is it a 3-month delay in Spanish projects, for instance, or also affecting the U.S.? If -- I don't know if it's possible to quantify or not, but any quantification would be very helpful. And finally one, I -- you put the EBITDA -- in the EBITDA line, the contribution from associate, could this continue from now onwards? Namely, will -- in the long run, the offshore project of the JV with ENGIE being reported above the EBITDA line?

So let's see about the winds, there is no -- I would say in Iberia, I think in the last quarters, we had very good winds. So again, I think, I don't know, 6 months ago, 1 year ago, I presented here a chart, which shows no -- no trend in terms of wind resources. It's not a question of being proved. I think I don't remember exactly when, but I remember that in one presentation like this, we've made -- we brought here historical series, which came from the '90s until now, in which for our own portfolio, we made the time series. And so there is no trend in terms of the wind. And in fact, in terms of Iberia portfolio, I think I'm not sure, but I think the last quarter of last year was rather good. So this one was not, but last year was very good. For in this year, it's not a question of less wind everywhere, for instance. This quarter, the past one, it was very good in Eastern Europe, in the Northern Europe. So -- but the weight in our portfolio is lower. So it's -- here, the point is to have this despite -- the more despite is -- it is the portfolio, the better it is. But -- so it's not proven. And on the other hand, there is evidence -- scientific evidence that the stabilization of the wind resources. So I would say that what we see about climate changes does not translate according to the series study that we made and that we presented here a few meetings ago, so very stable. Ups and downs, but steadily in the long-term. So I'm not worried with that, neither I'm worried about the cost, really. As Rui said, we are in the moment in which we are building 1.3 gigas which should be split in 7 or 8 projects. Of course, we require people, really. And if you ask me, what's going to do with evolution for the next -- the rest of the year with this ratio, is it going to go down. And it's not a question of trade, it has to go down mathematically for 2 reasons: one, for good reasons because we are going to have more capacity, and so the ratio go down; and another one, not for so good reasons because of the co-virus, the cost are now going down. It's not a good reason because it represents, in certain way, less trips, which are needed, things like that. But the costs are going down. So this ratio really is going to be clear to -- has mathematically to go down. So really, it's not worried with it. In terms of the projects, I would say, we could speak about 200, 400 megawatts, which can have a delay of 3, 4 months, no more than that. So let's say, if we think about that, on the 30-year life of the project, this is really nothing. Finally, in terms of EBITDA, in fact, according to the accounting rules, the net profit, not EBITDA, the net profit of the subsidiaries, which is on control, go to the EBITDA.

Mostly because you know that we have -- the subsidiary that we don't control or we have a joint control in the case of the JV, are part of the core business as well. So JV is part of our core business. We have a joint control and that's a big reason for it to be part of the EBITDA of the company. So those net profits will move up. And from now, hours will be recorded there. So we restated '19 to have a comparable figure. Figures are still very small, but we believe we should be more material in the future once the JV starts to have operating capacity running.

Exactly. But for the moment, it's practically material.

We currently have no further questions in the queue. [Operator Instructions] We have had another question come through. This comes through from the line of Meike Becker from Bernstein.

Yes. I was wondering whether you could elaborate on the growth potential of renewables in the U.S. as part of the economic recovery coming out of coronavirus, already commented sort of on the PTCs scheme. But in Europe, it seems the confidence is increasing that renewables will indeed be a strong pillar of the recovery program. So if you could from the distance you had in it and somewhere else, elaborate on what you've seen in the U.S., that will be very helpful on both levels, I guess, if you -- what you see, the probability of support at the federal level, or if it may come from the state levels and renewable portfolio standards or similar measures?

Thank you very much for your questions. Let's see, what I referred to is basically that according to the current legislation, that even if there is a small delay of the projects, the PTCs will be kept even if without any others. And frankly, in terms of our business plan, we are not counting on further casual support for the renewables. We are not counting on that. And we are not counting on that because the renewables are more and more competitive, and it will be PTCs the renewables can compete. And the trend is inevitable. We have the private companies each want to have long-term power. We have the utilities, even from Republican states, which one needs to replace the power. So I would say that the replacement of the fossil fuels by renewables, it's going to be -- even without the federal support is going to happen. The private dynamic is very strong, utility side and private side. And in certain states, we also have RPS. But I would say that even the first two which are basically based on economical reasons that continue to reach. That's why we are very confident about the evolution of U.S. In this moment, we have, as you know, that until 2021, we'll have more wind installer afterwards, so we have, perhaps because of tech's reason, a bigger increase. But I'm not counting in our business model with the extension of the current federal support. If it happens, excellent. But even if it does not happen, U.S. market is still very strong. And it's not because of political reasons that renewable exists. They exist because of environmental and economical reasons. And when the numbers are what they are, I would say, the history is that.

There are no further questions in the queue. So I'll hand back over to your hosts for any closing remarks.

Okay. So thank you very much for attending this conference. I would say that I just wanted to address, our company knows what is more important and the more important is combating the crisis, the health crisis. But at the same time, we were able to keep the normal working of the company in terms of operation, in terms of CapEx and not forgetting the growth and having in this moment 2020 -- May 2020, 83% of the total investments until '22 shows that reaching these objectives, and keeping profitability as we are showing, keeping an increase in the profitability is going to be as repeated there. So thank you very much. And I will desire and my wish to everybody continues to be fine.

Thank you for joining today's call. You may now disconnect your lines.