Voltalia SA (VLTSA) Earnings Call Transcript & Summary

Good morning. This is the conference operator. Welcome, and thank you for joining the Voltalia Half Year 2026 Results Presentation. [Operator Instructions] At this time, I would like to turn the conference over to Mr. Robert Klein, Group CEO of Voltalia. Please go ahead, sir.

Thank you. Good morning, everyone, and thank you for joining us today for our 2026 half-year results presentation. 12 months after the launch of spring, the first numbers of our transformation are becoming visible. In this period, we continue to simplify our organization, improve capital allocation discipline and reduce development costs while maintaining strong operational execution. In Asia, most of our disposals and processes have been launched. We also benefited from the recognition of historical curtailment compensation in Brazil, representing around EUR 29 million of EBITDA. And we continue also to progress with 438 megawatts commissioned and nearly 1 gigawatt of PPAs signed. As a result, we confirm our 2026 EBITDA objective. However, we now expect a net loss for the full year 2026, including the second half, reflecting a markedly significant than anticipated deterioration of items below EBITDA, particularly financial expenses, certain loss-making assets and transformation costs. Sylvine will provide more details in a few minutes on these factors and their expected impact on our full year results. Despite these challenges, SPRING remains fully relevant and the first benefits of the plan are already visible. I will now take you through the key achievements on the first half and the initial outcome delivered by the transformation. Let's begin with today's agenda, then we will start with the key highlights from the first half of the year, including our recent operational and commercial progress. We will then do our 2026 financial results and explain the main factors behind our performance. Next, we will provide an update of the execution of SPRING, including progress on cost savings, portfolio refocusing, disposals and operational performance. Finally, we will look at our outlook for 2027 and beyond. Then let's start with the key highlights. I will start then with one of Voltalia's key strengths, the long-term visibility of our Energy Sales business. We have around EUR 7 billion of secured revenues with an average remain PPA life of 16.6 years. In addition, 79% of our revenues are indexed in relation, which provides further protection. You see that secured revenues decreased from EUR 7.7 billion at the end of 2025 to EUR 7 billion. This mainly reflects the revenue recognized during the first half and our revised and more prudent assumptions, including curtailment. We also have a geographically balanced 1 gigawatt development pipeline and 3.6 gigawatts in operation or under construction. Our priority is now to improve the quality maturity in the pipeline rather than increasing its size. Together, these elements provide strong visibility and the solid foundations for disciplined and profitable growth. Let me now turn to our recent commercial developments. This is our second pipeline, which is a continuing strength -- our strength on our commercial activities alongside the refocusing of our portfolio. Then we continue to convert our development pipeline into long term contracted growth, as you can see, while applying stricter investment criteria, and this is important. During the first half, we advanced around 1 gigawatt of PPAs. We threw 860-megawatt of Helexia wind project in it and new agreements signed in the U.K. and in Italy. In Brazil, you've been able to read on probably on the press that we made further progress on PM, one of our first projects in the data center sector. Indeed, after securing 322 megawatts of grid connection capacity in June, the project recently another important milestone with its approval under the PSM export processing zone framework. What does it mean? It means that this will allow the project to move to another key milestone, which is the tax incentives and which will make the project even more attractive. PSM also gives us the opportunity to combine our strong local presence with our energy expertise and explore how Voltalia could support the data center industry as an energy infrastructure partner. Of course, based on this first experience, we may gradually consider similar opportunities in Brazil and potentially in other countries. At the same time, our services businesses continue to grow with new contracts for volt and additional opportunities for Helexia. Somehow, this shows that SPRING is not about reducing our growth ambitions but it is about focusing our risk and investments on the opportunities that create the most value. And to capture these opportunities, of course, maintaining access to long-term financing remains a key priority. Then on the third highlight, it shows our continued ability to attract long-term financing partners. The proposed partnership with ISE that already for up to EUR 120 million is a good example of that. Beyond the financing itself, it demonstrates the confidence in international institution in Voltalia's strategy and project offering. This financing would mainly support large-scale projects in Uzbekistan, Egypt and Tunisia. And given the size of these opportunities, we also intend to bring an equity partner at, of course, the appropriate stage. This will help us share the risk limit our capital exposure and also maintain a balanced portfolio. Together, these 3 highlights that I just commented show that Voltalia combines long-term visibility, strong commercial momentum and disciplined financing to support measured and sustainable growth. Let me now hand over to Sylvine, who will present to you the 2025 year results and the first evidence of the transformation. Thank you, Sylvine.

Thank you, Robert. Good morning, everyone. Let me begin with the headline performance for the first month. Turnover reached EUR 331 million, up to 30% at constant exchange rate, while EBITDA rises plus 35% at EUR 110 million. At the same time, the quality of earnings required a balanced reading. The period includes Brazilian past curtailment compensation. We revert this soon to give you more detail but first point is we've recorded EUR 29 million, which is more than what we budgeted, initially more than EUR 20 million, while resource availability transformation costs continue to weigh on the performance. Consolidated net loss remained at EUR 40 million, which is flat compared to last year. Important point I'd like to highlight is the cash improvement. Operating cash flow reached EUR 102 million, which is equivalent to 92% cash conversion and the closing cash position increased to EUR 343 million, which is a raise from half of June '25 of EUR 108 million. With the output of this slide is we do have a strong operational progress and we continue to apply a financial discipline to improve cash generation. Let's now move to our business line. So we will do a focus and a deep dive for main activity within Voltalia. Let me start with development. Our priority is clearly value through conversion over volume. We have refined the pipeline. Robert mentioned to 12 gigawatts with a tighter project selection, clear conversion threshold and more disciplined solar allocation. Financial effects and consequences are here visible. Point one, cash cost spend decreased by 32%, reaching EUR 30 million. Prospection fell by 23% to EUR 6 million. Head count reaches 293 people, which is more or less 14% less than prior period. In addition to the project sales made over the first semester, development P&L operating impact is minus EUR 2 million, which is less than EUR 5 -- by EUR 5 million compared to previous period. These savings are not simply short-term reduction. It reflects the structural leaner operating model we are currently leading. What's next? Let's have a look now on Voltalia Energy Sales. Thanks to new capacity, we've mentioned in South Africa Uzbekistan, we -- a bit lower ramp-up than expected, but with now a full operation, we increased slightly the production by 1%, though we are still facing challenges in Brazil and France. One of them segments in Brazil slightly decreased. And finally, we recognize the past compensation. As a result, the turnover increased by 29% to EUR 158 million, while EBITDA increased by 32%. It means we did improve EBITDA margin. Against this, we notice availability were weaker compared to prior periods, especially in Brazil, France, Guiana -- assets restarted in May. Second half of this year, the priority are clear with tolerability, complete the ramp-up of the plant fix we have been commissioning in the last months, maintain an operating cost control. The recovery levers are identified and delivery remains our main objectives. Let's now have a look and focus on where we stand with the curtailments. Reduction in volume is a positive sign. You can see it on the chart, but it's too early to consider normalization of Brazilian operating environment. Part of the lower curtailments mechanically linked to weaker production in Brazil, but we must separate curtailment-related to grid effect from resources and availability effects. Now regarding the accounting of the compensation. So we recognize the revenue and receivables in our books this year because we finally managed to get clear evidence of amount and agree with the administration about how much we can get as a recovery. It relates to past curtailment, September '23, November '25. It definitely supports our H1 figure, but we should not consider that this amount will be recurring in our books and we are still continuing negotiating for curtailment further to November '25 to get compensation. Indeed, the effects of curtailment is different between EBITDA and net results. While we have actually first recognized some taxes related to composition and simultaneously we did book an impairment of some of solar assets in Brazil because we reviewed our midterm assumptions in terms of curtailments. And therefore, that the prudent approach was to decrease by around EUR 8 million the value of some solar assets in Brazil. Therefore, the effect of the curtailment compensation is by EUR 19 million on the net income. Let's now move to another business line, Helexia. The growth is driven by dynamic European energy sales activity. Production increased by 12% to 323 gigawatts, turnover by 8% increased by EUR 32.5 million. It's broadly stable for the EBITDA, EUR 21 million. The challenge sits below EBITDA across the portfolio. European energy segment is resilient, but services is not enough to develop. In Brazil, activity remains unprofitable. With an average project debt rising EUR 459 million. The cost of debt increased 56% to EUR 21.5 million. It reflects an environment of global interest rate increase. Bear in mind that in Brazil, inflation index financing and assets are not yet for Helexia Brazil producing full capacity so we do not have yet the revenue generation to absorb and repay the financial costs, which creates a discrepancy. We therefore, accelerate, complete the commissioning plan and in support with the restructuring plan to reverse the situation. The objective in Helexia is to continue to grow on the top line to improve the EBITDA to assume a cash discipline to get better returns. Let's now move to voice. For the first half -- increased by 55% to EUR 124 million turnover. EBITDA doubled to EUR 12.5 million. EBITDA margin, which is a real success, increased to 10%, which is the target 2030, which is already reached. Growth is supported by both construction and maintenance. We have more than 750 megawatts under construction for third-party clients, mainly in Europe. We operate more than 1.2 gigawatts under maintenance contract. The backlog stands at approximately EUR 300 million, which is equivalent to 2.3x last year 2025 turnover. It provides visibility. At the same time, we are protecting the quality of growth, reducing as much as we can monitor risk and monitoring rate control. This is essential to convert the backlog in cash and secure our margin. Here, renreit is delivering a profitable growth with an increasing recurrence and visibility. To wrap up, all what we've been through are here consolidated within our 2 segmental reporting, Energy Sales and Renvolt. We do also have the Hub. You can see here that the group turnover reached EUR 331 million. Energy sales represent 57% of the total. Renvolt, 36 -- of the total. At EBITDA level, energy sales contributed EUR 116 million. All major businesses improved. Operating cost stands at EUR 10.3 million and includes some transformation and M&A-related expenses. The group is benefiting from better performance in energy sales, development and services, while underlying Helexia performance still needs to improve. Overall, EBITDA is up by 35%. The earnings bridge does not stop EBITDA though. So let's have a look on the bottom line. Moving below EBITDA, the first half net result reflects both the expansion of our asset base and the cost transformation. From EUR 110.2 million EBITDA, we have, in addition, depreciation and provision, which amounts to EUR 89 million. This includes the full year effect of recently commissioned assets for amortization and approximately EUR 10 million of impairment and regular guarantee provision linked to our regular activity of Renvolt. It also includes other operating items such as pren and Helexia restructuring costs. Financial results stands at minus EUR 48.6 million. Increase is driven by higher average debt, cost of average debt, which was overall from 6.14% to 6.3% in which is partially explained by our South Africa and Brazil scheme of inflation index related to also revenues indexed. Taxes and other items represent minus EUR 11.9 million, mainly reflecting the Brazilian tax. This leads to a consolidated net result of minus EUR 39 million and minus EUR 43 million of net loss group share. What we can here conclude is that we do really have operational improvement, but challenges remain within the restructuring, the cash discipline and the financial recovery. Let me now walk you through the financial balance sheet and structure of Voltalia. Our balance sheet is designed around long-term contracted nature of the asset base. Approximately 79% of the fixed assets are operating projects. Development assets represent the next source of earning growth. Growth that is predominantly project related, EUR 1.7 billion of project debt finance is -- the main part compared to EUR 945 million of core debt and EUR 700 million of shareholder loans. On interest rate, exports 75% of the debt is fixed, hedge or inflation index, leaving only 25 -- as enabled. Most important, the project debt has an average maturity of 12.6 years versus 16.6 years of remaining PPA life. This positive duration gap provides structural protection and visibility. The average all-in cost is 60%, while the net leverage stands at 68%. So deleveraging remains a central pricing for us. To sum up the long-dated contracted revenue, support the financing model, but the capital discipline is now to reduce the leverage. Let's now have a look to the cash generation. From June '25 to '26, we improved the cash position by EUR 108 million. Walking you through from December to June, what happened? So we started with a EUR 314 million cash, which have been improved, thanks to operating cash flow by EUR 102 million. While we did spend some CapEx -- total CapEx actually both for development and for our plans of EUR 139 million and get a net amount of additional finance of EUR 49 million, at the end of the period, our cash position improved to reach EUR 343 million of cash. This is another key example of the financial translation of the action plan we are now undertaking. So let's now have a look looking forward on the remaining part of 2026. We are confirming our EBITDA 2026 objective from EUR 210 million to EUR 230 million. The first half provides a base of approximately EUR 109 million from development and energy, EUR 13 million from Renvolt and minus EUR 11 million from order activity to get corporate costs. We do expect from the second half of the year, the following contribution: Development and energy sales are expecting to contribute for EUR 105 million to EUR 120 million, supported by recently commissioned assets and improved availability plan on second half. Renvolt in EUR 5 million to EUR 15 million through backlog conversion, as I mentioned it to you priorly, additional maintenance contracts as well. Order activity and corporate costs are expected to be in the range of minus EUR 10 million. The principal sensitivity remains resources, entertainment as well as the transaction timing of the M&A stream planning we are now working on. Therefore, the EBITDA target is supported by some key operating and intensified levers. I will now address the items Deloitte. We indeed revised the net result outlook for 2026. We expect a full year net loss beginning in the second half, despite maintaining the EBITDA target. Therefore, the change is driven 3 factors below EBITDA. First, some loss-making activities, particularly Helexia Brazil. We continue to carry on high financial costs, while the commissioning and the full speed performance is not yet delivered and delayed and therefore, more on the next result. Second, the corporate debt remains temporarily higher, while the SPRING disposal program is implementing with a final target to reduce the net debt to EBITDA ratio. And third, we consider some impairment to reflect an overall prudent approach that we have to have a leaner and more performance company within the next month. This is a realistic reset, not a change in our ambition and the question is operational improvements we've already achieved and I shared with you this morning. Let me close by summarizing the objectives for the full year '26. Our '26 operational and EBITDA objectives remain unchanged. We continue to target approximately 3.6 gigawatts in operation and construction, including around 3 gigawatts in operation. We also confirmed a group EBITDA of EUR 210 million to EUR 230 million, including EUR 190 million to EUR 210 million from energy sales. At the same time, we are clear that the full year net result is now expected to be negative. Our response, our action plan is execution, discipline to continue to improve in all operational KPIs and complete the ramp-up of recent assets. Conversion of backlog, reducing structure cost, delivery of the planned disposal, these actions are central to SPRING to our objectives to restore a sustainable profitability, stronger cash generation and process deleveraging. The overall message is we are confident in the operating fundamentals combined with financial realism and firm execution discipline. I will now leave the floor back to Robert for the SPRING execution plan.

Let me now give an update on SPRING. Then 1 year after its now SPRING is now fully in execution and most actions are on track. We are moving from implementation to visible operational and financial effects as you've been able to see with Sylvine. We are starting to see the first recurring benefits through simplification, workforce optimization and stronger cost discipline. At the same time, we are reinforcing financial discipline with closer cash metering, more selective CapEx, stricter portfolio decisions and clear focus, especially on deleveraging. And these benefits will be progressively as moving towards completion by the first half of '27. But our objective goes beyond saying, we are building the Voltalia of tomorrow, a more profitable and focused company is here to understand with a clearer business model and positioning. Let me take you through concrete progress achievement across each SPRING that you can see in the slide. On portfolio refocusing, we continue to concentrate on our core geographies. 5 country exits were identified last year with 2 exits targeted by year-end. On workforce optimization, around 160 positions have already been addressed, representing approximately 80% of our targeted reduction program. More specifically, in France, this effect around 100 positions, including IT related to the completion of the social plan, what we call the peso in French. In Brazil, around 40 positions and for each Portugal and taking term positions. On cost efficiency, we have already delivered EUR 16 million recurring savings in the first half of 2025 and including EUR 12 million from development and prospecting activities alone. I will come back to illustrate that we are on track with our plan in the second focus on the next slide. About disposals, very important one. Most of the processes have now been launched. And these cushions are progressing with neutral counterparties. While we cannot, and you will understand that we cannot disclose further details at this stage, we remain fully aligned with our objective of EUR 300 million to EUR 350 million for the first half of 2027. But clearly, at the same time, we are ready to be flexible on timing when needed to maximize value rather than compromise on price. Finally, on performance improvements. We are moving from identification to delivery with early evidence already visible in the operational performance of some of our assets as well as Renvolt which doubled its EBITDA in the first half of -- to reach EUR 2 million. Overall, we are making good progress on SPRING with concrete milestones across all areas of the plan. Then one of the first focus, the portfolio refocusing. Our priority is no longer to maximize the size of the pipeline. You know that already. It is to focus on the projects with the highest probability of conversion and stronger value creation potential. As part of SPRING, we have totally reviewed our development portfolio and introduced also a clearer maturity framework. This approach allows us to allocate capital more selectively and then as a matter of fact expect returns and as well reduced execution risk. It also helps us better serve a broader range of offtakers from utilities and government through PPAs to corporate companies through what we call the CPPA, corporate PPA, including data centers. And the thing that hybrid projects combining renewable generation and storage are taking a growing share of our pipeline, reflecting increasing demand for flexible energy solutions. Going forward, we will, of course, continue to present this development final, providing a clear view of our project maturity, conversion potential and future growth opportunities. Next point regarding the savings. We are ahead of plan. Let me -- let's take a moment to explain where we stand. In first half of 2026, we delivered EUR 60 million of recurring savings compared with H1 2025. This is around 60% more than transformation costs of the same period, which was EUR 10 million. It is also important that transformation costs are temporary while those savings are recurring and will continue to improve our cost base going forward. Now to compare our performance with our original target, we need, of course, to use the same baseline, 2024. On this basis, we have already achieved then EUR 21 million of savings after 6 months -- on the basis of 6 months, EUR 18 million prospecting and EUR 3 million from secured costs. And I can say that overall, we are generating savings faster than expected. And this gives us, of course, confidence in our ambition of reaching the EUR 45 million of average annual recurring savings between '26 and '30, I'll remind you, EUR 35 million from development and prospecting and EUR 10 million from structural costs. And moving now to our last focus, performance. Let me highlight an important point regarding our 2030 Energy sales EBITDA margin target to go from 70% to 72%. The improvement will come from 2 complementary sources. First, our existing operating portfolio where we are working on production and availability of revenue recovery, cash generation, and cost efficiency. Second, new power plants entering into operation with structurally higher margins. Then on our existing fleet, these actions are already delivering results, and it will be prudent month after month. For example, we have reduced operation and maintenance and asset management costs in Greece and in Brazil as well as solar insurance costs on some of our assets. Altogether, and already those initiatives already represent around EUR 2.7 million savings. And we are only at the beginning, as we progressively roll out those initiatives across our geographies, it's obvious that the impact will continue to grow over time. Moving now to our medium-term outlook. The targets, of course, are supported by 4 key drivers. The contractability, the asset performance, SPRING savings and financial discipline. 2026 is the first step towards, as Sylvine mentioned, stronger performance in 2027 and towards, of course, our 2030 margin and leverage objectives. Our focus remains the same and building a more profitable cash-disciplined resilient growth model with development and IPP at the course. We are concrete now. Let's come to our 2027 and 2030 objectives. First, our 2027 operating and EBITDA objectives remain unchanged. We continue to target around 4.2 gigawatts in operation and construction, including 3.7 gigawatts in operation. We hope consumed our EBITDA target of EUR 300 million to EUR 325 million, including EUR 270 million to EUR 300 million coming from the energy sales. Looking further ahead, our 2030 objectives also remain unchanged. Around 5 gigawatts in operation and construction, 70 to 70 tiers, I mentioned earlier of Energy sales EBITDA margin improvement and a 9% to 11% improvement for Renvolt margin and net for the deleveraging and net debt-to-EBITDA of 7.5 to 8x. These targets, of course, are supported by SPRING with building stronger asset performance and of course, our disposal program, so important for progressive deleveraging. However, as I mentioned earlier, on disposals, we want to maximize value rather than compromise on price, and this may result in some transactions taking more time than initially planned. For this reason and given the uncertainty on the timing of disposals, we are suspending and only suspending our positive net result objective for 2027 as well as related, of course, dividend objective for 2028. This is only a prudent decision. It does not change our direction or operating on our EBITDA ambitions. Let me now conclude with our key priorities for execution. And this is the final slide. Let me conclude with 4 clear messages. First, 1 year into SPRING, the transformation is delivering operational tangible results, a lower cost base, the simpler organization, stronger operational performance, supported by a better governance. Second, we are refocusing our business model. Development is becoming more selective. We are improving the performance of our assets, and we are more disciplined in our capital allocation. Third, financial discipline remains at the center of our execution. Of course, we continue to secure project financing, strengthening liquidity and develop strategic funding options. As you've seen, you've been able to see with the proposed partnership with IFC. Despite improving as you've been able to see, today, despite improving operational performance, we now expect a net loss in 2026. This is obviously not satisfactory. It reflects the pressures below EBITDA and shows that our transformation is not yet complete. However, this does not change the direction of SPRING. On the contrary, it reinforces the need to continue and accelerate the transformation particularly on cash generation, disposals and, therefore, deleveraging. And this brings me to my final message. Our priority is to transfer SPRING progress into sustainable value creation. This means delivering our 2026 priorities, executing our disposal program and of course, progressively deleveraging the company. Of course, we remain prudent on the pace of the transition, but our ambition remains clear to make Voltalia a top performer with profitability, discipline and execution as our key priorities. Thank you very much for having been there for this presentation and listening. We are ready to take your questions.

[Operator Instructions] The first question is from Arthur Sitbon of Morgan Stanley.

Yes. I have 2. The first one is I was wondering, you mentioned a few reasons, but I was wondering what is the main driver really of the cut on net income expectations for 2026 because that gets I understand at least EUR 40 million. And it happened just in a month, basically from end of July when you did the trading statement to now. Is it that some sales processes are going less well than expected? And maybe before you assume some capital gains linked to that and now you assume some impairment because I struggle to see how the higher debt could be so meaningful to lead to more than EUR 40 million of negative impact. That's the first part of the question on the guidance. The second one is on 2027. What is exactly leading to the suspension of the target because the time line of your disposal plan doesn't seem to have changed. So is it also linked to explanations of impairment versus capital gains on disposals? And the second question on a totally different topic. On the PSM data center project, I was wondering if you could provide a bit more detail on what will be Voltalia's role exactly. Will you basically just build the plant and sell the electricity via PPA? Or is there also the monetization of some power land, some grid connection that could take place and lead to development gains.

Okay. Sylvine for the first 2 questions, and then we'll take the third one.

Yes. Thank you, Arthur, for your question. So first of all, coming back to the results, it's been negative in '26 and the main reason why. What I was seeing and explaining in that is half year 1 is structurally Voltalia net result negative due to the seasonality effect, point one. Point two, indeed, we have a negative impact, which is linked to nonprofitable activity. I mentioned in the presentation, for instance, Helexia Brazil is definitely negatively weighing on our net results. The point and the reason why and you will say why it was not anticipated. The fact is that in Brazil, you do have a delay in Helexia Brazil in the delivery of the commissioning of the plant, which, therefore, do not generate as much as we planned expected operating cash flow and therefore, it has an impact on our P&L. So the second question in this case, why you did not mention and why you didn't share that point earlier within the year. The reason is the following: at the time of the Q2 publication in July, the information available in the progress of the disposal plan still supported the assumptions of sufficient contribution for 2026. So this is the main reason why in July, we did not mention. So to answer question, is the main driver nonprofitable activity due to delay in commissioning, which is part of this. Second of all, is the reason we mentioned it now is because of the combined impact of all the expectation and the targeted especially in terms of disposal plan, which make us confident and sure that we had to indicate not a positive results for 2026. Then the second point is, why do we suspend '27 half results? The fact is, as you mentioned, we do have a disposal program, the SPRING disposal program, which is expected to provide us of a total cash-in of EUR 300 million to EUR 350 million. We actually did launch a lot of actions, projects, which are now underway. They are either in Phase 1 or we even received some NBO and are processing now the data -- opening data room and are expecting by the end of the year, some binding offer. What we want to do is to select and to take the best project with sale disposal, which creates the more value for the company and which are the better for the company restructuring plan. Having said that, since that -- and everyone knows that M&A is quite difficult to predict, we consider that instead of telling you now in a month and then in 6 months to say we had a positive impact because of this function and then a negative impact with another transaction, there are 2 big volatility linked to the M&A program that we prefer to suspend and to inform you once we deliver each of the disposal program. So this is the main reason why instead of leaving some indication, which may change, we prefer to say, okay, let's freeze. And once we have more visibility, we share with you. So that was for question 1 and 2. And as for the last one, I hand over to Robert.

Yes. Thank you for the question. Indeed, this is what you mentioned in December, we've been working for a long time together with other competitors in this location which is a very good location in Brazil for data center because there is a possibility to take advantage of the arrival of fiber optic cables, especially in PSM or close to PSM. And our role is developing the project, securing the connection, securing the land, the permitting, et cetera, in order to monetize indeed this project. But not only we want to be an energy infrastructure partner, also supply the energy, thanks to the pipeline we had in Brazil, especially with the wind projects which are ready to build. Then basically, it's both modernizing the development activities we've been doing so far in that very specific place and negotiating and signing corporate PPAs with those data centers that will require a lot of energy in order to be able to run. And in Brazil, it's been now reconducting an incentive -- tax incentive program, and we just had the output -- the outcome that we are eligible to this tax incentive program that will allow us to show a very competitive projects towards colocators or hyperscalers, et cetera.

So just to follow up, to be entirely clear on that one. You will be linked to the PSM data center project. You will be generating EBITDA linked to the sale of electricity via PPA at some point when the data center comes online, but you will also generate EBITDA coming from the sale of a site or just from a PPA.

From both. This is what I said, monetizing then all the development activities to sell the projects and be hopefully profitable with an EBITDA generation and also EBITDA generation through the PPAs once the data center will start operation, and we will start also generating electricity on both. This is our expectations. This is the aim of the project.

[Operator Instructions] The next question is from Philippe Ourpatian of ODDO BHF.

I have several ones. One is a follow-up concerning the Arthur questions on PSM. How are you treating this deal because it's a little bit particular. Are you including it in the divestments, means including the EUR 300 million to EUR 350 million you're expecting or is considered as operating means EBITDA for the PPA, I could understand that. But the land disposal would be treated as nonrecurring as a business, which is including the divestment or not. That's my first question. The second question is concerning the curtailments. You were mentioning at some point a target of EUR 6 million some months ago. Where we are currently. What is your last estimation of the impact on a full year basis. And 2 other questions are mainly linked to the losses. Could you just help us to figure out what's going to be the landing point because you mentioned that financial charges are going to be higher linked to what you mentioned concerning the level of debt in Brazil. Could you just help us to have a rough figure what could be the Q2, I would say, impact of that? And also concerning the net losses, are we -- do we have to take almost the double of H1 for the full year? And last point is concerning the guidance, EUR 26 million in terms of EBITDA. The EUR 29 million are included. What is today your estimate of this compensation level on a full year basis as you are still working on that? Do we consider that EUR 29 million is already achieved the mean and we may have more than that. Just in order to have an idea about where we have to lend.

Okay. I will take the first one and Sylvine, you take the other ones. No, the answer is no to your first one. Actually, we consider PSM as a business as usual. As you know, we are developing projects, it could be energy projects and now it could be data center projects as an infrastructure energy partner. Then it's not included in the EUR 300 million to EUR 350 million divestment as you asked me. Then it's, let's say, considered as if we were selling a ready to build solar or wind project like we -- it's part of our business model every year.

Yes. So Philippe, as for your questions. As for the curtailment, as Robert mentioned, the amount you mentioned is the one which was budgeted curtailment '26 without any kind of compensation. So we do -- and this is what we are trying to reflect that we notice and we can recognize that there is a step-by-step year-on-year, a slight decrease in percentage of the curtailment, for this period compared to the prior period. So we assume that this amount will continue to decrease. And we have no as per target in terms of curtailment for 2026. And what we budgeted, we are in line and we have no deviation for 2026. One point is that it weighs a little bit more compared to our budget because we did the budget with a BRL 7 exchange rate, while we are now a BRL 6 per euro. So it weighs a little bit in our group contribution. Financial cost, cost of financing we expect not a significant increase for the second half I would say the percentage, which I presented 6.3% will be maybe slightly increased, but not very significantly. So this is going to be narrowed on H2 compared to H1. In terms of net loss, so indeed, we have a group loss of minus EUR 40 at the end of H1. We do have 2 things to consider here. The first one is our real activity. And the second part is the net result impact of the divestment plan. So as for our running activity, as I was explaining what was on our P&L, it's this nonprofitable activity, and we indeed do not expect to go further at the launch of the first -- the one that we had for the first semester. Having said that, I put a -- I know it's not comfortable, but I'm sharing you also what is a day to day life within Voltalia, saying we have a big program of the investments. We have some potential significant profits from this program, some of them which are not profit but can be done depending when they will happen and this creates the volatility I mentioned. So I just put this note, which is -- and then the last question, I think, was the 29. So we do not expect any further compensation related to this period or any future period for this year, we are still strongly having discussions, but not anything to be booked within the year.

[Operator Instructions] The next question is from Juan Rodriguez of Kepler.

I have 2 follow-ups from my side, if I may. The first one is on the disposal program that you signaled and the ongoing discussions for it. I want to better understand why is the difference in the timing that you've seen what you initially expected a year ago is mainly on the asset review on your side and the impairment charges that you've been having on some assets is mainly on investor interest and the expected valuation that you're going to get. I want to better understand these this timing change? And the second one is on the 2027 EBITDA guidance that is confirmed. Are you including any curtailment compensation for this guidance as you are including for '26. The second is, what are you curtailment assumptions given that 2026 curtailment is slightly above what you expected? And the third one is, are any disposals effects included on EBITDA? Or do you see it is going to be mainly below EBITDA in 2027?

Thank you, Juan. I will take the first one, maybe you can take the second one. And basically, it's regarding our disposal plan, it's roughly what you said, and it's pretty diverse actually the reasons of taking more time. Sometimes it's because the process takes more time because it's a bit more complex than we were expecting. On the other cases, basically, we prefer to take more time in order to be able to maximize price, then this is what I said during the presentation. And that's the reason why we could have an offset of planning in terms of asset disposal program.

Second question, one was about the assumption for 2027 EBITDA. So we did not book any potential compensation in our 2027 target in respect of curtailment for -- in our plan. And the third question, which is about disposal, indeed, most of them will impact below EBITDA because it's not a sale of assets, but it's mainly sale of activity, business lines. So it's going to be below EBITDA.