Enefit Green AS (EGR1T) Earnings Call Transcript & Summary

Hello. Good morning, or good afternoon, depends on where you are listening and watching us. Hope that you can hear and see us well. Happy to meet you here in our Q3 interim results presentation. My name is Aavo Karmas, I'm the CEO of Enefit Green and...

Happy to see you as well. Hi. Good afternoon. Veiko Raim, CFO of Enefit.

So let's do so that we will first guide you through our presentation, and after that we'll take Q&A session. And if we are not able -- or we will just run out of time to answer all your questions, we will do it after the presentation. And you're always welcome to write us your questions any time to e-mail, [email protected]. So all your questions will be answered afterward. So let's kick it off and see how did we do our last quarter. First of all, let's go through the surrounding environment and major changes [ there ]. So first of all, here on this chart we have highlighted or showed what our power prices in Q3 this year compared to power prices in Q3 last year. So as you can see, the prices in most of the markets have dropped significantly during a year, which also had an impact on our activities, we'll elaborate on a bit later. But the main reasons behind price decline were, of course, lower gas prices, quite high hydro reserves in Scandinavia and a bit of less of consumption also in the markets. But as a background information, the Q3 was -- the price in Q3 were very volatile in Nord Pool market. For instance, the average -- the highest average daily price was EUR 243 per megawatt hour. At the same time, the lowest average power price was EUR 5 per megawatt hour. So this shows you that how dynamic the power-price market is, or was, and it will be certainly in the future. And then what you cannot see from this slide, but as a background I can tell you as far as the Q3 power prices are concerned, they increased actually compared to Q2 power prices this year, especially in the Baltic countries. So in Scandinavia, actually, we went down compared to Q3 to Q2 this year. Second important thing to always have to see and follow is a regulatory framework across all our whole markets as well as in European Union. So I would just maybe point out few of them here. You can read more detailed information in our interim report. So maybe the main highlight is from European level -- European Union level, so where have been quite a bit of initiatives in Q3. First of all, European parliament approved the changes in Renewable Energy Directive, meaning that we have increased 2030 target to 42.5%. So 42.5% of energy consumed in European Union should be from renewables. A few weeks ago, the European Commission has published European Wind Power Act and Package, which mostly focuses on how to promote faster implementation of renewable capacities in the future. It consists shortening planning activities and also redesigning the auctioning system and so on and so forth. In Estonia, also our government has taken a few steps in terms of amending our legislation in order to boost the growth of renewables. And then last but not least, we have also started to -- or announce that they will start to create a law of climate also in Estonia for coming period of time. And maybe last thing from this slide to say is that Lithuania, the European Commission has decided to support a construction of 700 megawatt wind -- offshore wind farm in Lithuania in an amount of EUR 193 million. And also, the government is intending to temporarily decrease real estate tax for wind farms. So currently to 0.5% -- currently, local governments can ask up to 3% of income tax or real estate tax of wind farm in Lithuania. And the third impact to our business is wind conditions -- or of wind conditions. So here, you can see that the wind has more or less been on the same level in Q3 over the last 2 years. In Estonia, it was a bit higher, 5.7 meters per second, but it was mostly because of -- last year, September was extremely low, which brought it down to [ 5.2 ] last year. And in Lithuania it was the same level as to previous years. So that was shortly about -- brief about the environment around us. And next thing is of our operations and what we can do better and how we can affect our business. So here, we have traditionally brought out availabilities. In Estonia wind farm availability in Q3 was 92.3%. This was mostly due to planned massive O&M activities in our wind fleet. So our 2 gearbox chains is also blade repairs and so on and so forth. But according to our methodology, we do not exclude planned maintenance out of availability figures. So everything is included. And if we look year-to-date figure, so in Estonia, this year the availability was -- [ old ] wind farm was 95.6%, which is 1 point above last year results. I'm very happy to see the wind result at -- last year end-to-day figure was 90%. This year, it was 92.9%. But what we were struggling in with was availability of wind farms in Lithuania. As you can see, it has dropped to [ 81.7% ], and it was mainly caused due to 2-week stoppage in [ Eesti Loode ] wind farm of capacity of 60 megawatts, that was also in a short circular in our main couplings and cable, so that we need to replace cables between transformer and substation. It just took 2 weeks. It was a massive work. And -- but unfortunately, this impacted our overall results. And all in all, last quarter, the total production of wind farms was 195 gigawatt hours and lost production. I mean, both Estonia and Lithuania was around 25 gigawatt hours -- So 26 gigawatt hours mostly coming from [ Eesti Loode ] wind farm. So when I move on to -- sorry, and then just to mention that we have also ordered in the third-party independent audit -- technical audit for [ Eesti Loode ] wind farm, including both, I mean turbines as well as electrical part. Of course, our turbines are currently on the long-term availability guarantee offered by our supplier. But still we want to know -- and see possible risks which may arise in order to plan our mitigation actions in these wind farms. When we move on to CSP availability, so it was 93.3%, a bit less than last quarter. It was -- mainly came from Europe. In July, we had annual maintenance stoppage in Europe. But unfortunately, after the stoppage a few days later, leakage in our boiler was discovered, and then we had to shut down a power plant for 4 days in order to repair the leakage. So currently, all the mistakes have been [ kind of ] repaired in this power plant. And availability in solar farms was in expected level, at 99.6%. And happy to also say that as we had strong winds in September and there also a bit of storms and heavy storms at least in Estonia, that our solar parks were not affected by those. So moving on to now to our pipeline and how we've been doing so far. So our current operational -- operating and under construction capacity is about 1.1 kilowatts. And by the end of next week -- sorry, next year, we still expect it to grow up to 1.8 gigawatts. We have not changed anything here. But if we move on to our project under construction, here, I would just spend a bit more time. In general, I would say that, that all the projects are moving according to our promised time lines, except Akmene wind farm. As you remember, in this May we had an incident of falling turbine in Akmene. So after that we stopped operation of whole wind farm and contacted together with our partners, root-cause analysis. And then currently we can say that, that was a fault of one specific [indiscernible].

[indiscernible]

Yes. Sorry.

System.

Yes, system. But now it has been identified. And in September we decided to launch also the rest of wind farm. So happy to say that currently 11 turbines out of 14 are working at full capacity in Akmene. And we expect that by the end of November, beginning of December, the remaining turbines also up and running. Tolpanvaara also, we have -- we are even a bit ahead of our original schedule. So currently, 16 turbines out of 13 are already producing energy and then coming online one by one. So solar Debnik is ready to reduce from the end of October electricity. Estonia PV, which is a small one, but still, we produced first energy, already 2 weeks -- started to produce energy 2 weeks ago. So it's much faster than we expected. And with Kelme I and Sopi-Tootsi wind farms, we are doing according our original plan, same for -- applies for Sopi solar parks. So all in all, [ nicely ] on a way, except the accident in Akmene. And now if we have a look on our near-term pipeline, which consists mostly of onshore wind and solar with total capacity of 704 megawatts. So as such this pipeline into 2. So there are projects of onshore wind and solar wind, total capacity of 403 megawatts. We want to expect to make investment decision remaining of this year. So as you can imagine, those projects are really in kind of -- really in final phase in order to go for investment decisions. But here, we're carefully looking on how the power price -- power market is evolving and allowing us to make investment decisions against the PPAs. And as we have said that we have our minimum investment requirements we always follow in terms of the project returns and we also want to achieve with those projects. So that we are kind of not pushing the FIDs for those projects by all means. So the priority still is a project -- minimum project return. And the second part is a project of FIDs within next year with total capacity of 301 megawatts. So those projects are nicely on a way to -- as we have expected. So let us see how it looks like next year. And if we look at our long-term pipeline, so it has remained the same, 2,100 megawatts compared to our last presentation. Maybe some news about our offshore wind farm development. So we have nicely moved on with really environmental impact assessments and the studies going forward. And with all the wind farm, we have completed an environmental impact assessment report. We have submitted it to the Ministry of Climate and waiting for a response. Either they will approve it or some adjustments need to be done. And the next step is that the special state planning should be initiated in the seawater [indiscernible] in order to able to construct wind farms in the area in the future. So that was it about our operations and our pipeline. I'm happy to hand it over to Veiko, who will elaborate on our financials.

Yes. Thank you very much. So let's go through the quarter, so Q3 highlights. As we have already published on the production data, so we know we open it with everything else, right? So first of all, production levels in electricity, 259 gigawatt hours in the power, 37% up compared to 1 year ago, and most of the growth actually coming from the new assets. On one hand, it looks quite strong. Well, I think it's quite a lot more than last year. On the other hand, actually, we -- our expectations were quite a bit higher. So if -- I already mentioned that the visibilities been behind around 25 gigawatt hours of production loss. Then actually also other matters, for instance, Akmene not operating throughout the quarter pretty much have been also behind our production being below our expectation. And also September in Lithuania was reasonably or less windy than on average. So altogether, we have outed that probably around 9 gigawatt hours. We have even produced less than we would have produced otherwise in normal conditions. So it is where it is. It's up us to make the availability better. It is up to us to get also the development projects on track. And actually, we are making good progress with both. In terms of power, then [ oil ] price, then we have realized captured price of EUR 85 per megawatt hour in the latest quarter across all our markets. So that includes everything [ post ] the subsidies that we received. It also includes the balancing energy costs and revenues, also the [ purchase ] cost to service the [ PPAs ]. So this is essentially EUR 85 per whole megawatt power generated. The price reduction is less than on average in the market, but I'll spend a bit more time on this in a moment. Altogether then, our operating income and revenues in this quarter were 36% lower at EUR 44.5 million. EUR 15.9 million EBITDA is about half lower than the [indiscernible] EBITDA of last year. And then ultimately, net profit, EUR 5 million or 78% below last year's. If we look briefly on 9 months as well, so essentially the same impacts you can note here also. I mean just a little bit less pronounced perhaps. So [ grow ] production 12% above last year's. Implied captured power price, 35% below last year's, EUR 94 per megawatt hour on average. And we have EUR 76 million of EBITDA and EUR 36 million of net profit over the course of 9 months this year. So if we now spend a bit of time on electricity prices and the power portfolio and how much we have implied captured price out of the various sales and purchases. So firstly, to focus on the average quarterly electricity price on the left top hand side. So you can see that Q3 '22 the ranges were between [ EUR 100 ] and [ EUR 300 ] something. I mean, the core market average being EUR 317.7 per megawatt hour last year. So clearly, this year the power prices have circulated there, around EUR 100 a bit below that. So the power prices have been less pronounced. And [ of ] that, actually, the second bit of information comes from volumes. On the top right-hand side, you can see the Q3 '23. And really the [ 250 million ] gigawatt hours of production, part of that is the part that we sold for the PPAs, [ 202 ] gigawatt hours, in the like green box. But as the production was less than we expected, there were more hours where there was not enough winds, and we had to purchase actually 110 gigawatt hours of power to actually service these 202 gigawatt hours of PPAs. And finally, that left us around 160 megawatt -- gigawatt hours of sales to the market during these [ windy hours ] when we produced more than the PPAs. So this proportion of EUR 202 million over EUR 259 million PPA or the production is a bit higher than we have liked, of course, and that brings about the bigger purchases. So of course, we aren't too much about wind, but we can do things about availability. And of course, Akmene not being in operation has affected us as well. If one looks at the prices in the bottom left, then indeed, compared to last year solar prices are lower pretty much. But compared to Q2, we've also pointed out that the power price of the markets have been a bit higher. Also the power prices that we sell to the market have been a bit higher. But what actually cost us a bit more than in Q2 was actually the realized purchase price was [ EUR 116 ] per megawatt hour in the latest quarter. So that altogether [ was ] about sort of implied captured price of EUR 84.9 million per megawatt hour for our production that we had in this quarter. All right. Moving on. So how did power deduct impact our revenues and [indiscernible] is next. So really the production positive features both in wind segment and actually more even so in solar segment have had a [ special ] impact. This has increased our revenue on one hand. On the other hand, the implied captured price has been lower in every segment. So this has clearly had a more pronounced impact. So you can see that all the segments' operating income has been lower. And in the pellet -- in the CHP segment, also the lower pellet sales in this quarter specifically. Volume has also reduced somewhat the revenues. But of course, the EBITDA impact is -- from the less sales is lighter. In terms of total operating income, EUR 44.5 million, 26% below last year. So this is the snapshot on revenues. In terms of EBITDA, here, the electricity price drop and impact on our EBITDA can be see even more clearly, so, slightly EUR 21.1 million, the lower electricity price impact that we had. So even though the PPA prices were a bit slightly higher than last year, then still the merchant prices in the market were much lower than actually having a big drop in EBITDA mainly comes from that. Positive impact from the solar and -- actually produced and sold quantities, plus EUR 4 million. So if [indiscernible] [ bigger ] purchase volumes as well. Cogeneration segment had a positive quarter. So if one leaves out the power price performance, EUR 1.9 million positive impact. However, higher revenues from [ gate ] fees and the [ waste ] structure and also the pellet producing was just cheaper given the lower power prices. Finally, the fixed expense is minus EUR 2.2 million in this quarter. So this has been growing as quarter-by-quarter. Basically mainly comes from ourselves and [ more ] team members that deal with development, more than 20 people we have had in the [ last ] 12 months. So this is part of it. And then the other part is also there is certain consultation costs that we're doing when cleaning on the developments of our short term or near term and long term portfolio. So these impacts are the key ones. And of course, cost control is [indiscernible] and will remain very important to us for especially our operating assets and our management side. Now to go through briefly bit by bit, so the segments. So the wind segment are largest, more than 60% of the revenue is [indiscernible] So the production level is 30% higher at [ 105.9 ] gigawatt hours. As mentioned, the lower power prices can be realized -- can be seen here. So even though the PPA was so evident, yes, we still had 58% drop in our [ captured ] [indiscernible] price. So this is basically impacts. In terms of costs, we have always brought out operating expenses per megawatt of our operating capacity. So you can see Q3 '23 versus Q3 '22, in the top of these [ deck ] bars, the costs have been increasing by about 10% from EUR 9 to [ EUR 9.9000] per megawatt in the same quarter. So this actually includes 2 things. I mean one is the inflation and all [ PPAs ] and other indexes being used to increase our operating maintenance agreements that we have signed with the GE, [indiscernible] of this world. On the other hand, it also will start having an impact that as our new production has come [ online ] or the first [ inputs ] that we have had in this quarter. So these will start limiting the [indiscernible] as the newer winter lines are expected to be a bit more cheaper than the existing ones. So these are the -- all in all, the impacts on the cost side. And in terms of the total EBITDA that we have, EUR 10.1 million, that being about EUR 13 million over the last year, the main impact is still coming from the power price reduction. In terms of cogeneration segment, [ one more time ] that it had plus EUR 1.9 million positive impact 2 slides back, then you can see that it has still also escaped the reduction of the power price. So minus EUR 4.9 million was coming from power, so altogether, EUR 3 million of low EBITDA. And production levels were higher as last year at the same time we had a longer stoppage at the [ Iru ] power plant in September. And hence, the production levels were higher, but of course, the power prices that we captured and we are almost 60% lower compared to last year. And finally, I think the pellet being the volatile product. Some quarters we have more sales, some quarters less, but also the pellet prices are sometimes changing quite a lot, and still the impact on EBITDA is much less pronounced. Finally, Solar segment. Here, we have earned about 10% of our total EBITDA from solar segments. So good result and evident already in our graphs as well. So production was 27% higher compared to last year. So new solar farms coming online, also the revenues from operating funds were EUR 1 million higher. However, when we look at our EBITDA, that will then, of course, to capture the electricity price reduction also had an impact, so essentially EBITDA remained flat. But of course, within it also how -- it's the higher fixed expenses that we use in the development side, both salaries, [ land ] expenses and consultation. So these actually had about EUR 0.5 million impact on EBITDA, meaning that we've now increased development activity, the EBITDA would have been around EUR 2 billion from solar. The net profit, finally, or taking into account that we have said before. So EUR 5 million we earn net profits this quarter. Everything else -- or the impacts that I described, the same. Interest income has been a bit higher. Interest expense has actually been also EUR 3.6 million higher. But as we capitalize around 98% of that recent quarter due to the [ investment activity ], then that actually one doesn't see in net profit line. Somewhat higher also corporate income tax, but finally, the return on equity, [ 10% ] that we have achieved and 7.7% return on invested capital has been just a product of our EBIT and net profits and the invested capital and equity, respectively, right? So of course, one should keep in mind that we have about EUR 400 million of unfinished construction in our balance sheet, which means that this invested capital doesn't yet all generate any EBIT or [ net ] profits. So ultimately, one can charge on the success of these projects once they come online. In terms of cash flow, we had limited operating cash flow in the recent quarter compared to our investments. So we have had EUR 87 million of investment last quarter. We have financed that by taking in the loans that we had signed in the early part of the year. Where we have invested is mostly the wind farms, about EUR 80.8 million going there, in Kelme, Sopi-Tootsi and Tolpanvaara being the largest 3 and then a little bit also in the Sopi solar farm, EUR 1.9 million. So investment cycle is continuing and it has remained high. As for the leverage. So our capital structure is normalizing slowly but surely. So we are currently at 3.2x net debt/EBITDA rate if one looks at the last 12 months of EBITDA. And also the financial leverage, 35% of debt in the net debt share in our invested capital is getting closer to where we want to be. And also, we have, [ Don ] has mentioned, lost [ EUR 6 million ] on the existing facilities. And also the loan balance is around EUR 407 million. We actually have another EUR 405 million too that we have signed, that we can draw, including the new 12-year loan line with European Investment Bank that we signed in September. So altogether, we are well financed with our construction projects and in the end of the [ construction ] and really also 40% of our sort of total debt is also with fixed interest rate at the moment. So this gives us some security also in the -- for the rising of interest rates. At the moment, you can see the average interest rate, which is margin plus [ EURIBOR ] or swap, essentially it's 3.8% towards the end of this latest quarter. Finally, the power portfolio. So here, we have also introduced some new elements in this quarter. So the graph on the top left remains the same, or updated, right? And altogether, our PPAs from Q4 this year until the end of the last agreement is about 9.9 terawatt hours. So our average price of EUR 71.5 per megawatt hour. This hasn't changed. So this is the same that we had, [ signed ] new PPAs over the last 3 months. But what we know also is that the importance of the [ lot of ] PPAs in the quarters. So we bring out in Q4 '23, we have 273 gigawatt hours of PPAs sold forward with average price of EUR 91.2 per megawatt hour. So that gives you the guidance of -- as we report on the production on a monthly basis and then summarizing the whole quarter how we may have moved versus our PPA volumes as well. Finally, on the bottom left, we have also addressed some of the investors call for having a bit more guidance on power price. I mean, these are analyst views that we are also using in-house quite strongly. So we have obtained their consent to be presented here. It's a blended view. So 50/50 essentially from SKM and volume to [ houses ] with your research. So here, you can see that consensus seems to be around EUR 100 per megawatt hour for power price for '24 to '26. Basically, around [ EUR 70, EUR 80 ] megawatt hour. In Finland, [ EUR 100 ] being for [ Baltics ] and then EUR 120 million to EUR 130 million, something in that range for Poland. So we keep an eye on this. We, of course, for the house view based on these. And ultimately, we will always keep an eye out for adding new analysts as well who may add value for this discussion. All right. I have said all I had to say. So over to Aavo to [indiscernible].

Yes, thank you, Veiko. Well, we have to -- just to sum up first 9 months of 2023. So [ we had ] be -- really a busy, busy year so far, being affected mostly lower power prices year-on-year basis, which could -- and then also with unfortunate incident in Akmene being mentioned already a couple of times, which happened in May and had a certain and serious impact on our results, and we expect that all [indiscernible] up and running by the end of November, beginning of December this year. Also happy to see that the rest of under construction projects have been moving as expected. And this year, we have invested EUR 254 million and signed the new loan agreements. Our facilities raised to EUR 505 million. And also glad to see that our new assets, which are coming online one by one are already contributing to our production results as well as our financial results. So that -- for instance, in Q3, it was almost 20% of our total electricity production. So as last quarter, Q4 is ahead of us, is actually ongoing, which is usually the [ windiest ] quarter of the year. So we feel good [ at ] ready to go and [ beat the ] quarter and hopefully deliver good results. So saying that, I would like to thank you, everybody, for watching and listening.

And now we will take your questions. We ask you here. So I will just read [ it ]. How big is the effect of each ECB rate per 100 bps in Europe?

Yes. So, as we showed our total loan portfolio at the moment, which outstanding is EUR 405 million, roughly thereabout, 40% of that is hedged. So 60% is open, 60% is EUR 2.4 million of loans outstanding, which means that every 1% higher interest rate will bring about EUR 2.4 million more of cash outflow in terms of interest payments rates. So this is the simple math. I mean it will be evident in our net profits [ one-to-one ] because we capitalize most of this. But in terms of cash cost, that is the impact.

Do you feel any impact on business going forward from a finished nuclear plant? Yes. I mean, as I showed on the map where we had the power prices with solar, excuse me, [ Finnish ] power prices, or Scandinavian power prices are our lowest across the Baltic Sea. Certainly [ workload ] to coming online, we see it has [ any ] impact of lower prices in Finland. But some of this effect we can see also in Estonia, in the Baltic, but not very much actually because if we look the interconnections between Estonia and Finland, which is 1,000 megawatts, actually the cables -- our cables are full and there is [ not ] room for all these so-called cheap electricity to come to Estonia without having an extra interconnection between countries. If I understand correctly, biggest part of EBITDA drop was due to higher amount of purchased energy required to provide PPAs?

Well, on one hand, it may look this way, but the purchase is actually a result of something. And really, the core of these is that not having sufficient production, right? So if had we produced more, we will have had more power, we would have purchased less, but we would have also sold more for the [ Belgian ] markets. So these are interlinked. I mean, of course, we look at our portfolio and how much we hedge and we can go over hedge and in new production for us the purchases are higher. So this is indeed the data.

Which of the businesses, solar or wind, has a higher ROE now and looking to the future?

I mean, they have been quite comparable in some sense. I mean, wind, I think most recently we have seen higher cost increase, but still it seems to have had actually a higher returns, with the other hand as we are now seeing the CapEx reduction in solar, and actually solar is becoming also better and better. So we don't actually see that clear difference. And at the moment, I would think. But of course, the really important bit is what's the -- what are the capture prices for various technologies going to do in the future. Solar perhaps has more risk in that, that solar is coming into the same hours, but that we keep an eye out that what all the smart guys around, what they see us saying about that and I think also have [indiscernible].

Our current financial results highlighting approach for next year's dividend payments?

Our dividend price is 50% payout. So at the moment, we have earned as -- in the 9 months, EUR 6.7 million of net profit. We hope and expect to earn profit also in Q4. So essentially, that solar power price up and then we -- when we make a dividend decision. So this is where we stand currently.

Next on, considering the high volatility in daily power prices, how do economics look for great scale battery projects in Europe in your market? Any trends regarding power tweaks? Or is it still too early for those?

No -- I mean, yes, that's a good question. I mean, yes -- I mean, as I said, that we already see quite a high volatility in power prices going forward also in the future. And certainly, we need a kind of additional storage capacity in order to reduce this volatility. And when it comes to Enefit Green, I think we also said it in our last Q2 presentation that we expect to launch a pilot project next year in our -- sorry, [indiscernible] part where we have currently solar and wind in operation, and we will also had the storage battery as well in order to learn and study with possibilities. And most of our new projects -- development projects on the development are also constructed in a way that solar, wind and the batteries can be combined together. And yes, I mean, currently, the lithium batteries are not the option for a large-scale storage, for instance, wind farm part that -- I think it's just a matter of time. And of course, in the future, there are other options, pump [ hydro ] and stuff like that. So certainly, we're looking for storage -- additional storage capacities in the future.

How do you see the demand of electricity for the next 5 years, heat pumps, EVs, et cetera? This answer is that it will increase. So that nobody doubts so bad. So any survey or analyses you read -- you see that the growth for -- electricity will grow in the future. Of course, it depends country by country. We also have seen in our home markets that countries have a different view on, for instance, 2030, how much electricity demand is in 2030. If my memory serves me right, I mean, for instance, Finland, sees it's maybe 1/3, 30%, Estonia, a bit less, but still the need for electricity will grow certainly. I don't know, Veiko, if you want to add?

No, [indiscernible].

[indiscernible] What are your expectations to pellet sales volumes and prices for Q4 compared to last year? What about raw material prices and availability?

The fact that volume wise actually pellet production is pretty much maxed out. So we are not buying additional pellets or trading pellets essentially. There can be quarterly shifts back and forth a bit. But all in all, our annual pellet sales are quite comparable to [ shares ]. So we are not expecting huge volume growth. I mean Q4 and Q1 usually the pellet -- bigger pellet sales quarters than Q2 and Q3. So this is the volume guidance I can give. In terms of prices, prices have been higher this year compared to last year. So availability raw material has been reasonable, so we haven't really had any [ glitches ] there. But yes, so it's -- so is margin products. So as these prices actually move together quite a lot as well, the product in raw materials.

[indiscernible] financial problems affect you?

Yes, we have currently on wind farm [indiscernible] wind farm, our fleet in Lithuania. So it is -- I cannot say from the top of my head how much is it from our total installed capacity, but less than 5%, certainly so that -- taking into account with -- we do not expect [indiscernible]. But also older turbines, older models so that [indiscernible] has [ on ] progress with new modules. So in that respect I expect not to have any major financial impact for our activities. And we don't have any [indiscernible] currently in construction, so. [indiscernible].

Do you use any production optimization solutions offered by [indiscernible] in addition to research and analysis [ too ]?

From [indiscernible] specifically, we also only the analytics. So we don't use production optimization, but we're actually not the providers to understand the cooperation between wind and solar, for instance, how they interact and what's the kind of good balance in the portfolio for wind and solar. Plus in everyday daily life, we use different tools to optimize our production, trade-out imbalance, together with our [indiscernible] colleagues from [ this scenario ]. So essentially, it's a daily task how to be the most exact in terms of forecasting. And when forecasting doesn't go right, as it never does, which the winds don't know exactly, then how to balance the portfolio, how to meet the minimum [indiscernible]. So this is all our daily job.

So it seems that we have answered all the questions. So if not more, once again, thank you very much, and you're welcome to send all your questions and comments to [email protected] any time, and we are happy to answer, and see you next time. Thank you.

Thank you.