- Revenues of Euro 20.8 million (Euro 14 million as at 30/09/2021; +47.68%)
- EBITDA of Euro 8 million (Euro -0.4 million as at 30/09/2021) with an EBITDA margin of 38.36%.
- EBIT of Euro 4.2 million (Euro -3.8 million as at 30/09/2021), Profit before tax (EBT) of Euro 3.8 million (Euro 3.4 million as at 30/09/2021; +10.1%)
- Net profit of Euro 2.7 million (Euro 4 million as at 30/09/2021; -33%)
- Net Financial Position of Euro 13.2 million (Euro 12.8 million as of 31/12/2021; +3.29%)
- Net equity of Euro 14.5 million (Euro 12.1 million as at 31/12/2021; +20%))
- Notice of release of the Interim Management Report as at 30 September 2022
algoWatt S.p.A., GreenTech Solutions Company listed on the Euro next Milan market of Borsa Italiana, announces that the Board of Directors of the Company, which met today, approved the Interim Consolidated Management Report as at 30 September 2022.
Main consolidated economic and financial results
Revenues amounted to Euro 20.8 million (Euro 14 million as at 30/09/2021; +47.68%). It should be noted that the significant increase is mainly due to the positive economic impact of a settlement agreement finalised in August by the South African subsidiary TerniEnergia Project Ltd, which resulted in the recognition of an extraordinary income of about Euro 7.8 million. It is to be noted the significant contribution to revenues deriving from the results of activities related to the design and development of software, products and solutions for the energy, utility and mobility sectors, amounting to about Euro 7.5 million. The remaining part of the revenues refers to the realisation of projects as part of the energy requalification of buildings and energy saving activities for Euro 1.1 million, and to the O&M activity of photovoltaic plants for Euro 0.8 million. Revenues also include the results of Research & Innovation and technology transfer activities, which contributed about Euro 1.4 million, capitalisations on projects developed with internal resources, in the amount of Euro 1.7 million. Finally, about Euro 0.4 million emerged from the recognition of some tax credits related to R&D and training activities.
EBITDA amounted to Euro 8 million with a considerable increase compared to the same period of the previous year (Euro -0.4 million as of 30/09/2021), with EBITDA Margin equal to 38.36%, a consistent increase. Adjusted EBITDA, representative of EBITDA attributable to ordinary activities, (calculated as EBITDA gross of restructuring costs, equal to Euro 311 thousand, and “other operating costs”, equal to Euro 267 thousand, “contingent liabilities”, equal to Euro 163 thousand and without considering the extraordinary contribution of the settlement of the company TerniEnergia Project Ltd equal to Euro 7.6 million) amounted to approximately Euro 1 million (Euro 0.7 million as at September 30, 2021). The adjusted EBITDA margin amounted to approximately 7.8% (4.8% as at 30 September 2021).
The Net Operating Profit (EBIT) amounted to approximately Euro 4.2 million, an improvement of Euro 8.1 million compared to the corresponding figure of the previous year (Euro -3.8 million as of 30/09/2021). The change is mainly attributable to the proceeds of the settlement described above.
Profit before tax (EBT) amounted to Euro 3.8 million (Euro 3.4 million as at 30 September 2021; an improvement of 10.1%). It should be noted that the result for the nine months ended 30 September 2021 had been positively impacted by the effects of the restructuring agreement with banks and bondholders, which had resulted in the recognition of a financial income of over Euro 8 million.
Net profit, after taxation of Euro 1.1 million, amounted to Euro 2.7 million, down from the corresponding figure for the previous year (Euro 4 million as at 30/09/2021; -33%) due to the effects described above.
The Net Financial Position amounted to Euro 13.2 million (Euro 12.8 million as of 31.12.2021; +5.73%), with debt divided into a short-term portion of Euro 1.6 million and a long-term portion of Euro 11.6 million.
Current debt as of 30 September 2022 mainly includes short-term credit lines used as advances on invoices. The non-current portion of debt mainly includes the residual exposure to banks, for which the Financial Agreement signed last year provides for limited repayments for 2023 and 2024 (amounting to approximately Euro 1.2 million per year) without accruing interest expense. The repayment of the portion remaining after the 2023 and 2024 repayments is tied to the so-called “liquidity event” defined in the Financial Agreement and related to the sale of algoWatt to be realised starting from June 2025.
Net Equity amounted to approximately Euro 14.5 million (Euro 12.1 million as at 31/12/2021; +20%). Net Equity also takes into account treasury shares held in the portfolio, which amount to 1,012,998 (2.15% of the share capital).
International macroeconomic scenarios indicate that the continuation of the energy crisis coupled with a change in the tone of monetary policy could cause the world economy to decelerate. The picture is burdened by multiple downside risks related to: the aggravation of geopolitical tensions, the persistence of high levels of inflation, the possible adoption of excessively restrictive and uncoordinated monetary policies, and the more abrupt slowdown of the Chinese economy. In any case, the process of transformation towards a new digital economy and ecological transition, which began after the Pandemic, is now unstoppable and opens up vast opportunities for growth and development for companies like ours, which integrate the two objectives. High-speed communication software infrastructures, electronic commerce, new digital experiences, and a strong acceleration towards automation and green tech, continue to represent the building blocks of the economy in the coming years.
algoWatt is working to implement the Recovery Plan pursuant to Article 67, paragraph 3, letter d), of the Bankruptcy Law (now Article 56 CCII) and the related Financial Agreement. It is quite clear, moreover, that the 2022-2024 Plan was prepared on the basis of forecasts and assumptions concerning future management and reference market dynamics, which, although reasonable, present profiles of uncertainty due to the uncertainty connected to the realisation of future events and the characteristics of the markets in which the Group operates. These scenarios, strongly influenced by the raw materials crisis, the repercussions of international geopolitical instability, the trend of the money markets and the growth in inflation also connected to the Ukrainian conflict, together with, as regards more endogenous profiles, the change in management and the protraction, beyond the expected timeframe, of the reorganisation and streamlining of business processes, have led to a slowdown in the attempt to acquire new orders and new requests for the development of activities, which are moreover increasingly complex. Likewise, it was necessary to launch a series of risk containment measures that affected all those aspects that would have generated excessive commitments not proportionate to the economic aspects. In the short term, these events could, in some cases, have repercussions on the Group’s business and economic, equity and financial situation.
To this end, also with a view to eliminating the risk of non-compliance with the financial commitments imposed by the financial manoeuvre, as well as to support business continuity and growth, the management is exploring – as envisaged in the 2022-2024 plan – the possibility of resorting to extraordinary transactions also aimed at allowing for an early fulfilment of the obligations set forth in the Plan and the Financial Agreement.
ADDITIONAL INFORMATION REQUIRED BY CONSOB PURSUANT TO ARTICLE 114 LEGISLATIVE DECREE N.58/98 (TUF)
The main changes in related party transactions of this company and its Group since the last annual or half-yearly financial report approved pursuant to Article 154-ter of the Consolidated Law on Finance.
There have been no significant changes in the Company’s and the Group’s related party transactions since the last approved financial report.
Any failure to comply with covenants, negative pledges and any other clause in the Group’s indebtedness involving limits on the use of financial resources, with an updated indication of the degree of compliance with these clauses
It should be recalled that on 7 December 2021, following the closing for the sale of the shares representing the entire share capital of three photovoltaic farming companies, algoWatt announced that it had met the covenant related to the 2021 Financial Parameter, which envisaged the completion of divestments for a countervalue of at least Euro 9 million, as envisaged by the Financial Manoeuvre related to the Reorganisation Plan.
With regard to financial commitments (covenants) for the year ending 31 December 2022, it should be noted that its parent company Italeaf has committed to repaying debts to the bank for a minimum amount of Euro 6 million through the sale of industrial assets.
In particular, the covenant of the parent company Italeaf is represented by the sale of real estate assets (named Maratta and Nera Montoro), from the disposal of which the liquidity necessary to meet the repayments to the banks is expected, to be made by 31 December 2022, amounting to approximately Euro 8.2 million, taking into account a flexibility mechanism that reduces the reimbursements for 2022 from 18% to 12% in the event of lower collections than expected, but in any case not below Euro 6 million (“Italeaf Reimbursement”). The directors of the Parent, taking into account the information shared with its parent company, believe that it is not probable that the aforesaid sales will be completed by the close of the 2022 financial year. For this reason, taking into account that the described situation of probable delayed disposal of the properties would, if confirmed, constitute a case of termination of the Finance Agreement to which algoWatt has also adhered, the directors of algoWatt and of its parent company resolved to promptly jointly request – and are about to submit – a “Stand Still” proposal in order to renegotiate, in accordance with the timing that will be agreed upon as a result of the “Stand Still” request, an amendment to the Finance Agreement and the Plan.
With regard to the financial commitments (covenants) relating to the financial year ending 31 December 2022, it should be noted that the parent company algoWatt is obliged to comply with a NFP/Ebitda ratio of no more than 4 (which, in subsequent financial years, will increase to 3). Against this background and based on the actual results as at 30 September 2022, the Directors of algoWatt believe that the likelihood of compliance with this covenant is low. The Directors of algoWatt will also constantly monitor the evolution of the Company’s operating results and the performances that will be achieved, also having regard to the matters set forth in paragraph 1.6 below, reserving the right, if necessary, to evaluate any possible interventions with respect to the current provisions of the Financial Agreement and the Plan also concerning algoWatt.
The status of implementation of any industrial and financial plans of the AlgoWatt Group, highlighting the deviations of the actual data from the forecast ones
Please refer to the previous point and to the Business Outlook.
Filing of documents
We inform that the Interim Management Report as at 30 September 2022 has been filed and made available to the public today at the company’s registered office, at Borsa Italiana S.p.A. as well as on the centralised storage mechanism authorised by Consob “1Info”, which can be consulted at www.1info.it.
The above documentation is also available on the company’s website www.algowatt.com in the Investor Relations / Financial Statements section.
The Manager responsible for preparing the company’s financial reports, Mr Filippo Calisti, declares, pursuant to paragraph 2 of Article 154-bis of the Consolidated Law on Finance, that the accounting information contained in this press release corresponds to the document results, books and accounting records.
This press release is also available on the Company’s websitewww.algowatt.com and on the regulated information dissemination system 1INFO www.1info.it.