Enefit Green AS (EGR1T) Earnings Call Transcript & Summary

Hello, dear investors, and welcome to the info session about Enefit Green's unaudited interim report for Q4 and the past 12 months as a summary. My name is Juhan Aguraiuja, and I am the CEO of Enefit Green. With me here today is Argo Rannamets, our CFO. Today, what we have in front of us is a short presentation in the new format here with 2 new faces. I am here, of course, already for the second time. But this time, we will present the whole results just the 2 of us. How do I look back for the first months that I have been here? I have been here now for 4 months, and I have only gained more security about the matter that it is a strong company with a very strong team, with a great ambition to develop further. What we have today is that I will shortly go over a summary of last year's biggest highlights and have a small prospective look on the future. Argo will take a closer look on the financial results. And in the end, of course, we will have our traditional Q&A session. Please submit your questions in the Worksup environment, and we will be glad to answer them at the end of the presentation. So -- but before I begin, Argo, a few words from you for intro.

Hello from my side as well. It's a pleasure to be here and in front of you, dear investors and all the participants. I'd like to second what Juhan was already mentioning about the strong team we have here in the company. I've had the pleasure now for the full month to ask questions and go through the intensive period with all the discussions we have had internally and also outside of the company. My primary intention during the first month was to understand what are the strengths in the organization and where are the biggest challenges, among that also what are the trends that are influencing the company the most and what we have to face in the future. We have done also quite a lot of analysis during the first week. And one of the things what we did, we gathered information about the similar companies in the renewable energy sector in Europe, only took those into account, which have the similar profile as Enefit Green and gathered information about the companies situated in a large area throughout the Europe, including France, Germany, Spain, Italy, Poland, Scandinavian companies and so on. And to position Enefit Green among those companies, the position is actually remarkable. When it comes to net profitability, we are a bit above the average. When it comes to return on equity, we are in pair with the average. And also when it comes to financial leverage, we are there in pair with the average. And when it comes to dividend yield, we are above the average, actually among the top performers. Therefore, a remarkable position. The knowledge level in the organization is really good, is exceeding my expectations, to be honest, and the partnership with strong organizations, et cetera. We are going to this slide by slide when we proceed. Back to you Juhan.

Okay. Thanks. And I will then start the presentation with giving a short summary of the past year. So that the very peak, let's say, if we summarize everything is together, the idea that Enefit Green has been -- always been seen as a renewable development or a developer company. And we have been growing and developing a lot, but we have to realize now that we have, through that growth, become a very large-scale production company. And we have reached during last year, almost 2 terawatt hours of production volume. So to be more exact, it's 1.9 terawatt hours, and it's 40% more than the year before that. And of course, we managed that through completing the construction of many parks and getting the operational and into production mode. Another thing to highlight is that the heat sales volume has dropped compared to last year, but that is due to the decisions made already a year ago to exit from the biomass-based businesses. But we are still keeping the business running in the Euro waste-to-energy plant. What we have seen, of course, is that when we add more renewables to the market, it is a positive effect of that on consumer prices. We increased the number of hours where the prices are low and thus decreasing the average electricity price. But we have to understand that, that sometimes has a negative effect on the company performance. And this makes us very analytical moving forward. In our business, it means that there is sometimes oversupply on the market, and it leads to higher wind energy discounts. If we look shortly on the financials, Argo will go through them more detailed later on, but the main figures you see here on the slide and in revenue, we were a bit lower than last year. The main impact was lower electricity prices and the exiting from the biomass. The EBITDA increased compared to the last year because we made a lot of new investments, and the investments generated already some good cash flow out of it. The net profit has increased significantly to EUR 70 million compared to last year when it was 26% lower. And that why it is exactly like that, Argo will explain later. And if we look at the return on the invested capital, 5.2% is, of course, the result of the end stage of our heavy investment period where we have invested a lot, but not gained the full cash flows during the whole year yet. And if we look shortly to the future, the key focus is to ensuring stable cash flow from the new projects and balancing then the development for the future with profitability as we are now a big mix of production company and a development company. If we look back to our growth period since the IPO and a bit even before that, we see how far we have come in our production volume. On the graph here, you see the overview from the last 5 quarters. And if we look back and compare to the stage we were at 1 year ago in Q4 2023, you see a large share of still projects in construction or in the final stages that is even larger than the existing assets. And when we come to the recent quarter, we see that most of the assets have now reached the final stages of construction, meaning testing, permitting and so on, meaning a stage where they already produce energy and generate cash flow for our investors. And it's only about 100 megawatts that are still in active construction phase. If we compare this 1.1 gigawatts of installed capacity that we have already producing to the IPO numbers that were 457 megawatts, it's already a 2.4x growth compared to that. And a more detailed short look into the biggest projects that we finished or got to the operating stage during the last year, of course, we start with our biggest proudest project that is Sopi-Tootsi Renewable Energy area. It has the biggest wind and solar parks of the whole Enefit Green. What is remarkable for the Estonians and the Baltics colleagues have already seen that when it has started the biggest share of production end of last year, we have already seen a big decrease in the consumer prices. The first turbines in Sopi-Tootsi started to work in August and all of them started to produce in November. And when we look at the PV Park, the PV Park started in October and got full production readiness in December. While we have highlighted here also Akmene, that has been, of course, an ongoing topic for many of the presentations and quarters. Akmene Park, most of it has been already operational for a longer period of time, but during the last year, we reached also an agreement and technical completion with the last turbine where there was an unfortunate incident by the construction company where one of the windmills collapsed. And now the whole Akmene Park is in full production. Then as well Tolpanvaara, our Finnish park reached full production capacity in the beginning of the year, where the settings work went a bit not as expected, but eventually, we got it to full production and are happily producing in Finland. Then 2 other projects I would like to highlight. First of them is Kelme that is the biggest project as a whole. It has 3 stages. The first one, Kelme I, had production readiness a few days before the end of December, but it started the full production in January. And the second stage of Kelme II wind park is planned to start installing the turbines in the second quarter this year. Why we have brought out here also the Silale wind park in Lithuania because this is a significant milestone for Enefit Green, as this was formerly opened in September last year, but it was one of the first investment decisions we did after the start of our heavy growth phase. And not only do we speak about the megawatts and the cash flow that we generate, but an important factor about all of these parks, only the 5 ones that we have selected here, when they generate the electricity, we avoid with that about 1.5 million tonnes of CO2 emissions that could theoretically be coming from CO2 heavy production. If we take a glance to the future, what is our focus? And we take to heart the long-term interests of our investors. We are in an energy business that is a very long-term business. We do investments for 30, 40 years. And we feel secured that the renewable energy is still the most competitive form of energy in the energy market. We have seen how the prices have dropped, and it is a good way to fulfill many targets. The company itself, we target a steady cash flow, and that is the main objective, from the new projects and also from the existing. And we get that, of course, through having a great availability in our existing assets and also the projects that are still in the construction or finalization phase need to be ready at the expected time and have to start generating the cash flow. When we look at the development projects and how we move forward, this is where we are going to seek a balance between the company's development and still keeping the profitability. And this is the task for the new management for the upcoming months. We have also taken a better focus on the geographical point that we have understood that our biggest advantages come in the Baltics and Poland, where we see the biggest potential. We will also focus more on hybrid and large-scale wind projects. One example of that geographical strategic look is that we are considering the possible exit from the Finnish Tolpanvaara wind farm. And why we are doing that is that we see that the wind park as a stand-alone solution doesn't give us and our investors the expected result. And we see that the wind park in the portfolio of another larger company in the area could benefit from it, as the Tolpanvaara wind farm park has a different profile than others and has a lower discount on the market. So in summary, we will focus on getting the maximum out of every megawatt hour that we produce. And what we see more and more how we have chosen to move forward is through strategic partnerships. And here, we see 3 great examples of that. First one, what we started during last year was the cooperation with the Polish development company, RES Global Investment. Together with them, we are developing a quite substantial onshore portfolio in Poland to be constructed in some years. And of course, the biggest news from a few weeks ago is that we started a cooperation with the global investment company, Sumitomo Corporation for the development of the Liivi offshore wind farm in the Gulf of Riga. We have to take this as a great compliment that Sumitomo has picked us as the partner. And for us, this only ensures the potential of the park to come into realization. We have now together with Sumitomo, all the competencies and capabilities needed to complete the development phase and move to construction and operation with the park. And the third example is from Lithuanian, Kelme III Park that I already explained before. We have 2 stages there already in the works. And as the investors know, the last year didn't generate the cash flow as quickly from the new projects as expected. That's why we are seeking to do the Kelme III project together with an investor to have it well financed and the risks a bit covered. If we zoom out and look at the region and think for a short while about why we are in this business and why it still makes sense. The main reasons are the energy deficit that we see from the table on the slide, heavily, especially coming from the Baltics, although the Baltics have increased their own production volume, the deficit still remains above 30% as a whole. At the same time, we look in our Polish market where we are active that the deficit there doesn't seem that big, but we have to realize that the Polish energy system heavily relies on still coal that is step-by-step being phased out. That gives a gap in the market that we want to take advantage of as well. The second factor is the prices. On the map here on the slide, you can very well see that the Nordic countries where there is a high share of renewables and CO2-free energy, the prices are much lower than in the Baltics and Poland, where the prices are still remaining high and giving the opportunity to still do additional investments. And this significantly shows this that there is still room and need in the market for renewable energy that decreases the dependency on other countries on electricity import and could reduce the electricity prices for the consumers. Another important factor when we are looking on a wider picture that is -- vital in our business is the renewable energy profile discounts, meaning that how much less do renewable energy producers gain from the market compared to the market average. And of course, here, we see the trend that the more there are renewables in the market, the deeper the profile discounts go. Significantly in Finland, where the share is the highest is also the discount is higher. And we see that also in the Baltics, the share is always -- sorry, not share, the discount is going deeper. And this makes us cautious for the future. And also in the today, we take action on this to not just sit and watch what is going on. We have started our own initiatives on digitalization and automatization of our assets so that when the prices are lower or negative, we can down regulate or then shut off completely our plants to avoid making losses. The same capability offers also us in a market where the renewable share is growing to offer system services for the network providers to stabilize the grid. And this as well when the share of renewables is growing, is a growing market. And we are one of the first and biggest offers of system services in the region. But with this, I will give my word to Argo, who will present more detailed the financial results. Argo?

Thank you very much. Very good overview. I will guide you through the slides that are coming in a row now. And some of the slides here are relatively loaded so bear with me. I will guide you through with this thought and sometimes point out something where to turn the attention to. So starting from the Q4 and comparing this to the Q4 in 2023, the total produced volume grew by 67%, among that new assets, which were also producing a lot more compared to what they did a year ago. Then as Juhan also mentioned, the price -- the sales price has decreased, but we were coming back to this when we move forward. And also the return margins are mentioned here. We will come back to this also later in the presentation. What to point out here is the EBITDA growth compared to the same quarter in 2023, that grew by 28% and net profit by 44%. Some of the highlights on the right side of the slide, which mark our Q4 in '24. Sopi-Tootsi produced 186 gigawatt hours in the quarter. Kelme I reached to production readiness in December. Sopi solar park reached to full capacity in December and the environmental impact assessment was completed in the quarter and was given over to the authorities for further handling. Proceeding from here, this is now the slide which probably needs some additional attention. The decline in the market price and the PPA contractual price led to decrease in the implied captured price. And what it shows here, the implied captured price has decreased by 21%, which is also shown here in the table. If we look at the graph here, of course, it's visible -- well visible that the production amount in total has increased heavily and also the sales portions have increased compared to the same quarter in '23. Among that, what is good to highlight here is that the share of purchases made to cover PPAs, which have been signed earlier, has decreased down to 20%, which is the level we have not had over many, many quarters by now. The same level was in Q1 2023. So the share is back on a decent level. Further from here, higher production volume drove EBITDA growth in Q4. EBITDA, as I said, increased by 28%. The biggest impact to that growth is, of course, coming from the increase of the production, we sold more. And the other part is negative, which means that when the prices on the market were decreased, that made another big impact to our EBITDA. Also from the assets we sold in relation to exiting the business based on biomass brought along a decrease of EUR 3 million. This is also reflecting in our EBITDA. And the impact of the fixed asset growth is something also that is added to the page here. Now turning the page and going to the total year of '24, leaving the quarter behind. Here, again, you see the production growth, how much the volume was growing. Price change is again the same, what you saw earlier. And now coming to the full year EBITDA and net profit, as was also highlighted by Juhan in the introduction, EBITDA in comparison -- in year-on-year comparison grew and the net profit as well. Some of the highlights, which we have already covered are listed on the right here on the slide. I'm not going to repeat all of them once again. But one of the things what we haven't mentioned yet this far is the fact that additional loan agreements were signed in the amount of EUR 180 million this year, and the partners there were EBRD, Swedbank, OP Bank. Akmene settlement is also mentioned here. The net impact to EBITDA growth here was EUR 5.3 million as a compensation from the damage we -- the damage occurred there. Then the same thing, again, related to the market prices. Once again, as we can see in the table here, the market price changed by -- changed downwards by 25%. And one of the things also that impacted the -- impacted us in relation to the prices was the last PPA that came into force in the beginning of 2024. Actually, the PPA was signed in 2021 already. But now in the beginning of the year, it was -- it came alive. All right. Coming to operational income and the revenue in total and doing the split here as well, the biggest impact came from wind in total. On one hand, because of the bigger production volume, the wind part, of course, had the biggest contribution to the growth of -- actually to the small decline of operating income in total. The biggest decline or the decrease came from assets, which were sold, as was mentioned already, the biomass-based business. Of course, in 2023, a remarkable amount of revenue came from this business. And now when we sold it, this revenue was never received in '24. Coming to the EBITDA on the full year level, again, the same factor is influencing us. The most is the bigger volume or the growth of the volume and once again, the decrease of market prices. Also income from Akmene settlement and the impact from the assets sold. The overall investment volume this year was -- or in 2024 was the biggest ever. It grew by 9% compared to the year before. And of course, the majority of it went to wind business. If we do the splits per project as well, Sopi-Tootsi was the project that took EUR 200 million from the total. Kelme II parks in total, approximately EUR 100 million and Sopi PV park, approximately EUR 30 million plus the rest. Earnings per share amounted to EUR 0.266 per share in 2024. In 2023, it was EUR 0.211, the increase of 26%. And on one hand, it was achieved due to smaller interest expenses, which were not booked in the P&L statement yet, but capitalized under the fixed assets because of the assets, which were not finished yet. And on the other side, also the decrease in the income tax and some other parts, which helped us to increase the net earnings in relation -- versus EBITDA level. Now again, here is a picture, which is -- which involves a lot of information. And if you bear with me, what is here is the financial leverage level, which has increased in '24 compared to '23. Now we are -- the financial leverage is 48%. I didn't cover the return parts in the beginning when we first mentioned the figures of ROIC and return on equity. Now if we do the comparison '24 against '23, we see that return on equity has increased, and there is a slight drop of -- on the return of invested capital. A few parts of -- a few words about the cash flow as well. Of course, the biggest impact or the part that is impacting us the most is the investment cash flow, the flow that has gone to fixed assets, of course, supported by operating cash flow and also some of the additional loans what we have taken. A few more parts what to highlight here is the total balance of outstanding loans amounts to more than EUR 700 million in the end of the year. Average interest rate is 3.9%. Approximately 20% of the interest is covered by swaps and unutilized loans and revolving credit facilities, which we have still outstanding or we had outstanding by the end of the year were amounting up to more than EUR 200 million. And I'd like to give it back to you now, Juhan.

Yes. Thank you. So that Argo went through the main financials. And -- but what we wanted to highlight here more again is our electricity sales portfolio and the special attention to our long-term sales agreements or the PPAs, as this is very vital and a high impact on our business. And what to understand here is that the PPAs are made because new investments can only happen if we have security for the future cash flows and that we gain through the PPAs. Those are needed to get external financing for the projects and also to manage our own risks. And the main risk that they help to protect against these very low electricity prices. And of course, we have to understand that most of the PPAs were made in very low price market conditions, and they still have an impact today. But as we see here on the table, the average price is on the growth, and that is coming from 2 factors. So it's -- because of the average price of the contracts is increasing to the older, lower ones falling out and newer higher ones kicking in. But the other factor is also the share as we see from the graphs here that the whole of the production volume is increasing during the next years, but the share of the PPAs is remaining stable, leading to a lower share of PPAs and a higher average revenue price for us. This is a high attention and focus area for Enefit Green, as this has the biggest impact in our business. And it is -- our skill team is heavily analyzing and always finding the best and optimal balance of the PPAs and selling to the market compared to the revenues and the risks with that. We are, of course, very aware and cautious about the impact of PPAs now moving forward. As we have new potential investment decisions coming up, we have a very analytical and cautious view how to do them in the future. And to summarize today's presentation is the financial figures, as already mentioned. The revenue has dropped a bit due to lower electricity prices and also the changes in the assets. The EBITDA has increased on a small amount -- or let's say, it's maybe too subjective, but still 8% growth, but it is a bit lower than expected, as it is -- the construction projects kicked in a bit later. The net profit made a nice increase of 26%, reaching EUR 70 million. And of course, we achieved all of this through the strong production growth of the new assets and especially from Q4 as most of the new assets started production only in Q4. And we have basically finalized all of the active construction activities in the projects in the pipeline. The only active construction site today is the Kelme II Park that also starts production in some months already. And an important highlight as well is that the stability of our cash flow is highly coming from a good availability of all of our existing operating wind and solar assets. So it is a big job from the team to keep them running, and it's in a higher and bigger focus for us in the future. Already mentioned Akmene settlement, of course, played a big role. We have that behind us, but that didn't come easy. It was a great work from the team. So great thanks for that. The negative effects, as already mentioned, mainly we saw lower prices and higher profile discounts. And then the conclusion, what we take from here and how we move forward is that we will focus on improving the returns on the existing assets and ensuring through that the best outcome for our investors. The leverage will be lowering as we gain more production units into operation and increase the share of our income. And a highlight on the partnerships. So this is the way we are developing forward through partnerships, finding the best synergies, getting the maximum out of that. And the biggest part of that, of course, is the offshore development in the Gulf of Riga. With that, we come to an end of the presentation with the fact that we have reached a total generation capacity of 1.1 gigawatt installed. That is 1.4x -- sorry, 2.4x higher compared to the level at the IPO. So we would like to greatly thank all of our investors, partners and team who have committed and contributed to making this happen. And special thanks to all of our investors for believing in us and sticking with us through this whole journey. So thank you for listening. And now we move to the questions. And for that, I welcome our Head of Financial Relations here, Mr. Sven Kunsing, to help us with the questions. So please.

Hello from my side. My name is Sven Kunsing, and I'm the Head of Finance Communication, basically Investor Relations responsible for Enefit Green since the IPO. And I will, yes, read your questions, maybe answer some myself as well, if I can. So first question actually is in Estonia, and I sort of combine it with the third question here as it is about the battery investments and whether we are going to make any. So is it not time to ramp up battery storage and/or pump hydro in Baltic area and by us then?

Yes. A very, very good relevant question. Thank you for that. We have actually made our first investment decision in the last quarter. last year about our first battery storage that will be added to the Purtse hybrid park, further hybridizing it. It is already a solar and wind hybrid and now it will be added to battery. And this is the first step of gaining the knowledge experience in -- for us to enter the battery business, so to say, as well. There are many interesting factors happening in the market. It's not only the intraday price differences, it's also the system services, and we are heavily following the market, analyzing further potential on that and having a strategic overview of the storages.

How does recent government decision not to go ahead with marine wind parks support Enefit Green.

Thank you for the question. The offshore CfD auction was postponed, not canceled. So that is the main message. We have also been in contact, of course, with the ministry. And the knowledge and the agreement between as well with our partner, Sumitomo, is that the auction is coming, and we are committed to participating there. But now we are working on the new state date conditions. So the ministry has said that they will apply for a new state aid approval. And of course, we will consult the ministry on how to get the best conditions for that so that the conditions are suitable for the lowest price for the consumer, but at the same time, also decreasing the risks for the investors. And I think the new state date will give better opportunities for that.

Then there are 2 questions in a row about our exit from Finland or Tolpanvaara or sort of potential exit, I would call it, yes. And whether we expect to lose money on it? So the first answer would be that we generally don't give any financial forward guidance. And I think -- the second comment also, I think, I can deliver that we are generally not in the business to lose money. So -- but maybe you can add to that.

Of course. So the rationale behind the Finnish sale is not to earn money from the sale. So that was not the target. The target was to have strategic focus and focus on the Baltic and Polish markets so -- and to look around in the market, if there are other investors who see higher value in the park than us. And that is the stage where we are at. At the moment, we are consulting many investors, and then we will know about the price level. And if we have that, we will, of course, share the news with the stock exchange.

Then there is a question that compares us to one of our competitors here in the Baltics. Why PPAs of Enefit Green are made at so low price compared to other companies. For example, Ignitis has PPAs at average EUR 121 per megawatt hour for 2025, while Enefit has PPAs at half of that price. Maybe before you jump into the answer, maybe I can also try to answer. First, I just went through the Ignitis' sort of annual report, couldn't find the PPA prices stated there. Perhaps I was sort of overlooking something. But even if so, then the question actually is about the length of these PPA transactions. So -- and certainly also about when Ignitis started to actually sign these PPAs. I think we probably started a little bit earlier in 2021, when the economies were just emerging from the corona crisis. Energy prices generally were very low. Then we signed our first Lithuanian PPAs at quite low prices. And we, yes, certainly suffer under this or our average PPA sort of portfolio price at the moment is partially coming from that. But -- and we don't know when Ignitis signed their PPAs. It might have been in 2022 when we also signed several Lithuanian PPAs and some of them even I think, at EUR 140, if I remember correctly, per megawatt hour. So -- but maybe you can -- I don't know, add some color here.

I think you covered most of it. I think maybe what to highlight is that during the last year, we didn't sign any new PPAs. And now, of course, the price level is quite different. But this, of course, needs a further detailed analysis comparing to both companies.

What percentage of Sopi-Tootsi Park was on average producing? What part of that park turbines was already started in Q4 last year? Are already all turbines now producing?

Yes. Short answer is yes. All turbines are producing. As mentioned, the first ones started operation in summer and all of the turbines were operational and producing energy by November. So meaning that some days from November and the full December, we received already maximal potential production capability. But of course, there are still testing and settings works ongoing in a park that is so freshly commissioned that this a bit decreases the complete volume that we output, but the readiness to produce was there and that we saw also in the results as expected level production from Sopi-Tootsi.

Do you consider the share of PPA and assets already producing as healthy now? As I understand, Q2 and Q3 of last year had a problem that there were more PPA than working production. Is that improving? And maybe I can also answer that, that this is wrong that there never has been more PPAs signed than we have production, but the problem is more that the ratio of the PPA sales to production has been too high. It hasn't been like above the actual production. But the problem is that we have intermittent production from wind and solar, mostly wind. And if there is too little amount of that production compared to the baseload PPAs that we have had, then there is a potential problem. But you can follow the actual share of the PPAs to the expected production in our annual report or this 12 months report here that we published today and what we have published also previously. And there, you can see what we expect. And yes, it's true that this share is now lower as the production is there. Parks are operating. They were a little bit to operation, as you explained, but this problem should be greatly smaller now.

Yes. What to add only to that is that we also take active measures when we see that the share of the PPAs is too high. There are specific products on the market that we use to reduce the share of the PPAs through the back, let's say, reverse buying from the market that help also to mitigate the negative effects on certain periods. And that we are actively doing. We are very much hands-on in securing that we get the best outcome of that.

Then there is a question that I don't quite understand. What financial impact ending feed-in premium -- Okay. Yes. What financial impact ending feed-in premiums would have in 2025? Yes, that's a bit hard to answer actually without just looking at the data at the moment, but there are a couple of wind farms actually coming out of the production. Maybe we can go back to this slide. So 2025, so this white box showed the feed-in premium. So basically, it's more like 2026, what we'll see the most effect when this white box is decreasing. So this decreased times EUR 54, whatever, per megawatt hour should be the effect then in year 2026 rather than 2025. But some small effect should be also this year because we had also some of this feed-in premium ending last year as well. But yes -- sorry, I can't answer this here in sort of direct or live event. So sorry about that. Please write me an e-mail, and I try to give a better answer.

But of course, we cannot give out the financial impact of that for the future...

But generally sort of show how you can -- what sort of volumes we have had under this feed-in premium and what we present here. So it's possible to sort of calculate this or estimate. Do you have some projections of EBITDA and/or net profit for 2025? How much electricity production in percent terms should expand in 2025 versus 2024? So basically, we don't -- as I already mentioned, we don't give forward financial guidance. We give this sort of production estimation here looking forward. So it's about close to 1 terawatt hour of additional production that we expect, as you can see here from this 2025 bars on the left. And if you compare it to last year's production, which was about 1.9 terawatt hours, then you can see the expected sort of volume growth, but then you have all sorts of effects on top of that which we -- yes, unfortunately, we don't give guidance on. Could you enlighten what level of dividends per share would be proposed for 2025?

Yes. Perhaps this is a question I can answer as well. At the time when the company was preparing for IPO, the dividend policy was agreed. And actually, the dividend policy ever since has not been changed. The policy is saying that the company is intending to pay out 50 -- at least 50 -- no, is intending to pay out 50% of net profit as dividends. And the Management Board will make the suggestion at the time when the official annual report will be published and the decision to pay out the dividends will be made at the time when the general meeting will approve annual report as well as the dividend payout decision. At the time when we form the suggestion by the Management Board, of course, we will take into account what's written in the dividend policy.

Are you planning to change loans with bonds in the future? Would that give opportunity to lower financing costs?

Of course, this is an option what we have on the table. And among those options, we have some additional as well to give out some promises or hints already now how things will evolve. This is not the time, of course, but certainly, bonds are something to consider.

How much do you expect to make on System services in 2025? And what is the delta versus 2024? Again, a question about the financial guidance or future guidance, which we don't give, especially on such very specific figure. But I don't know...

We can comment on the volumes that -- as I already mentioned as well that when the renewable share on the market is increasing, we see a bigger demand on the system services. And we definitely see this as an increasing market, and then we are in a good position to take advantage of the market.

Would 2-terawatt hours be enough to start the offshore project?

Will it...

It's the auction, I think volume...

But it all eventually is dependent on the conditions of the potential state aid by CfD so that the volume, the conditions, the timing, everything plays a role in that. And once we have an understanding of the conditions, then we can make the final decision in what capacity and how and if we are going to participate in the auction. It all depends on the conditions.

And it is currently the last question that I can see here in this space. So are you looking for a minority investor or 50-50 joint venture for Kelme III?

So we are looking at different options, and we are in negotiations with many different parties, and we have been looking at different kind of setups for the Investor Relations, but we are not at this stage yet to announce any concrete decisions on that yet.

Okay. And it seems that this is it for today. So thank you for your questions. Please do send any remaining questions to [email protected], that e-mail reaches me and I will organize the answers for these questions. Thank you from my side.

Yes. Thanks for listening, and thank you for the great questions, and see you next quarter. Thank you.

Thank you.

Thank you.