MPC Energy Solutions N.V. (MPCES) Earnings Call Transcript & Summary

This year's Annual General Meeting of the MPC Energy Solutions. My name is Ulf Hollander, I'm Chairman of the Board, and I would like to welcome all shareholders. I would like to welcome the other members of the Supervisory Board, as well as the management board, which is represented today by the CEO, Mr. Martin Vogt; and the CFO, Mr. Stefan Meichsner. Please note that this meeting will be held virtually under the Emergency Act given the consequences of the COVID-19 pandemic and the governmental restrictive measures set at the time of this AGM. Before we go through the agenda, please allow me to introduce a few formal matters regarding this AGM. Mrs. Heike Hulle was appointed Secretary of the AGM and is asked to take the minutes of this meeting. This meeting will be held in English. Votes were already cast by proxy prior to the AGM and the results will be formally announced during the AGM. All shareholders that were registered as such on or prior to 25th of May '22 were invited to the AGM, and were able to cast their votes by proxy. The AGM will be streamed as live event, and the recording will be made available on the company's website after the meeting. All shareholders were asked to raise questions via [indiscernible]. With that, I would like to turn over to the Management Board, Mr. Martin Vogt, the CEO; and Mr. Stefan Meichsner, the CFO, to present their report.

Thank you, Ulf, and also a very warm welcome and good morning from my side. I will continue now with the main business events since the beginning of 2022. 2022 started for us with reaching financial close and the construction start of our 21-megawatt solar park, Santa Rosa and Villa Sol in El Salvador. The project has a 20 years U.S. dollar PPA with a local subsidiary of CAESS Corporation and with [indiscernible] for Q4 2022, and we are well on track to achieve this goal. Furthermore, in January, we also shared started with the construction of our 100% owned 12.3 megawatt solar project Los Girasoles in Colombia. Also the expected completion date is the fourth quarter of 2022, and we are also well on track to achieve this start-up operation at the end of the year. [indiscernible] also under a long-term [indiscernible] PPA to SPECTRUM, which is a local Colombian power trader. Continuing in February and with the completion of the acquisition of 100% [indiscernible] Solar Park, we entered the Mexican market with this operational 15.8 megawatt peak project, [indiscernible] kilowatt hours [indiscernible]. The power that we produce is sold to LEONI, a German cable manufacturer [indiscernible] De La Salle Educational Network, which includes around 30 campuses in Mexico, also under a long-term PPA. In March, we then completed the acquisition of 95% shareholding in the 3.4 megawatts CHP asset in Puerto Rico. This CHP asset will supply electricity to Neolpharma, which is a private Mexican pharmaceutical company that produces its products in Puerto Rico, and will sell power and steam [indiscernible] PPA. This project will reduce the CO2 emissions of the company by 30%. In addition, all of our project developments in the Dominican Republic, Jamaica and Colombia made also steady progress towards a ready-to-build status. Last but not least, I would like to share that we have just very recently last week celebrated the groundbreaking event for our hybrid solar and battery storage project in St. Kitts. We name it Solec Power. This is a pioneering 33-megawatt solar project that also have an attached battery set and will decarbonize 30% of the national power supply at an approximately 30% cheaper cost. It's a major step for the nation to award a 100% renewable energy goal by 2030. It's also the first of its kind of a utility-scale hybrid project in the entire region. The project will have around USD 75 million investment costs. Equipment will be supplied by Tier 1 OEMs, including batteries from [indiscernible], inverters from SMA Solar and solar panels from Canadian Solar. We have appointed the Swiss company, Leclanche, as the prime EPC. And CIBC, a leading Canadian commercial bank, will provide $52 million of senior debt project financing. We will sell the energy and the battery storage capacity, as well as spinning reserve capacity under 20 years fixed U.S. dollar price PPA with a local utility that also includes a 5-year extension [indiscernible]. With that, I conclude the review of the main business events for 2022, and would like to hand over to Stefan Meichsner, CFO of the company. Thank you.

Thank you, Martin. I would like to reflect on the financial development of the company in the last year and in the first 6 months of this year 2022. The financial development reflects the progress that Martin just outlined in his comments. If you remember, the net proceeds from the IPO last year were around $87 million. And since then, we have invested nearly $60 million with additional funds already being committed or allocated. And 2021 and also part of 2022 still marked the ramp-up phase for our organization. We built our team in the different regions. We continue to develop the projects and our own backlog, and we were actually able to add projects through partnerships with Enernet Global, which is very well known, as well as, for example, Soventix Caribbean in the Dominican Republic. Q1 2022 also marked a milestone for our company. We started generating revenues from our acquired asset Los Santos I in Mexico, and we expect other projects, namely Neol CHP in Puerto Rico, as well as one of our projects in Colombia and likely our project in El Salvador to contribute revenue and EBITDA to our company this year, which is why as of today, we can confirm our guidance for 2022 that we shared in the Q1 webcast in April, which is a revenue target of $4.5 million to $5 million for 2022, with a positive EBITDA contribution from the projects of up to $3.5 million. And it's our ambition that on an EBITDA level on a corporate level, we might even break even this year which, of course, that shortly after the IPO is a very nice and tremendous accomplishment. I would like to conclude my remarks by highlighting that all reports and presentations that we publish are available on our website, and shareholders and other interested parties are always welcome to address questions or comments via e-mail to [email protected]. And the next report that we will publish, accompanied as always by a webcast [indiscernible], and the date for that is August 17. I would like to thank all shareholders for their participation in today's AGM, and we hand the word back to our Chairman, Ulf Hollander. Thank you.

Thank you both, Martin and Stefan. With that, we turn to the next agenda point, questions from shareholders. There are no questions that were submitted by the shareholders prior to the AGM, so we can quickly skip that point. Then the agenda item #4, presentation of the voting results. We have holders of 5,424,358 shares that exercised their voting rights. They represented 24.4% of the total share capital. We had hoped that more shareholders would exercise their voting rights in the future, and certainly a strong participation of the shareholders is more than welcome. Please allow me now to present the voting results. The first resolution, adoption of financial statements for 2021. I would like to propose that the annual report and the consolidated financial statements of 2021 are being approved. They were published -- the financial statements for the financial year 2022 were published on April 20, '22. The company is listed on the stock exchange and has been since January 22, 2021, and generated no revenues in the financial year 2021 given that no operational assets were available in that year. The net-net loss for the year was USD 2.7 million Total assets of the company amounted to USD 86.1 million. The auditors Ernst & Young Netherlands LLP have issued an unqualified opinion for the annual report and the financial statements 2021. And we had all vote 100%, 5,424,358 voting for the adoption of the financial statements of 2021. Thereby, the resolution is passed. Resolution #2, discharge of the Managing Board for the financial year 2021. I would like to propose that the discharge of liability is granted to both members for the financial year 2021. Mr. Martin Vogt, the Chief Executive Officer of the company; and Mr. Stefan Meichsner, the Chief Financial Officer of the company, were the only members of the management board during the financial year 2021. And again we have 100% of content, meaning 5,424,358 votes in favor of the discharge of the Management Board and thereby, the resolution is passed as well. Resolution #3, the discharge of the Supervisory Board for the financial year 2021. I would like to propose that also the members of the Supervisory Board received discharge of liability for the financial year 2021. This includes Dr. Ignace van Meenen; Mr. Kjell Roland; Mrs. Kathryn Baker; and Mrs. Ellen Hanetho, I apologize, I should have mentioned the ladies first; and myself, we were the only members of the Supervisory Board during the financial year 2021. And again, 100% consent translating into 5,424,358 votes in favor of the resolution, and therefore, it is passed as well. Resolution #4, the appointment of the auditor for the financial year 2022. I would like to propose to reelect Ernst & Young Netherlands in Zwolle for another 1-year term as auditors. Ernst & Young Netherlands has already been the auditor for the financial years 2020 and 2021, and is very familiar with the company's set up, its structures, the financial history, the plans and the situation and conditions of the existing assets. The company and Ernst & Young have agreed on a competitive fee structure for auditing the company's annual report and the consolidated financial statements for the financial year 2022. Again, we have 100% consent translating into 5,424,358 votes in favor of that resolution, and we would thereby welcome Ernst & Young again as the auditor of the company for the current financial year. The agenda item #5 for this AGM, any other business. There are no additional measures that need to be attended to, and thereby we can close that point as well. Closing remarks. We would like to thank our shareholders. We would like to thank the Management Board for their tremendous contribution, input and dedication that as a member of the Supervisory Board, we have all been able to observe in 2021 and the first month of 2022. Also, I would like to thank the team who has made a sincere effort to move this company forward. We are on a very good track as I think was clear from the comments that Martin Vogt and Stefan Meichsner made. We will see the first revenues in 2022. We will see a full set of revenues in 2023. So if you look at it from a geopolitical perspective in a somewhat turbulent environment, I think this is the best you can say, and certainly our gratitude goes out to team and senior management in getting us where we are today. And we wish all of them luck with their endeavors for 2022. Very ambitious targets have been set, and it needs dedication and a little bit of luck to get there. And with these comments, I would like to conclude the AGM. Thank all of you again. I conclude the meeting at 10:16, and thank all participants for joining. See you next year. Bye-bye.