Earnings call transcript: Trinity reports strong Q4 2024 growth

Trinity has reported robust financial results for the fourth quarter of 2024, with significant year-over-year growth in revenue and EBITDA, despite the absence of specific earnings forecasts. The company achieved a total revenue of $643 million, marking a 61% increase from the previous year. EBITDA also rose by 53% to $160 million. According to InvestingPro data, the company’s overall financial health score stands at 1.45 (WEAK), suggesting potential challenges despite strong quarterly results. Trinity’s strategic moves, including project commissions and partnerships, have solidified its competitive stance in the renewable energy sector.

Key Takeaways

• Revenue surged by 61% year-over-year, reaching $643 million.
• Net income increased by 17%, totaling $60 million.
• The company reduced its net debt significantly from $975 million to $566 million.
• Strategic agreements with BYD (SZ:002594) and CATL were finalized.
• The Oasis of Atacama Project’s initial phases were sold to Global Contour.

Company Performance

Trinity’s performance in Q4 2024 underscores its strong position in the renewable energy market. The company has capitalized on the growing demand for solar and hybrid projects, particularly in Latin America and Spain. The completion of financial closing for the Oasis of Atacama Project and strategic partnerships with industry leaders like BYD and CATL have further enhanced its market presence. Trinity’s focus on hybrid and night power purchase agreements (PPAs) aligns with current market trends, positioning it for sustained growth.

Financial Highlights

• Total (EPA:TTEF) Revenue: $643 million (+61% year-on-year)
• EBITDA: $160 million (+53% year-on-year)
• Net Income: $60 million (+17% year-on-year)
• Capital Expenditure (CapEx): $650 million (+77% year-on-year)
• Net Debt: Reduced to $566 million from $975 million in September 2024

Outlook & Guidance

Trinity is optimistic about its future prospects, with plans to invest over €1 billion in capital expenditures in 2025. The company aims to expand its presence in Chile and Europe through new PPAs and standalone battery storage projects. A Capital Markets Day is scheduled for May 28 in London, where further strategic initiatives will be discussed.

Executive Commentary

CEO David Reith emphasized the company’s proactive approach in adapting to the rapidly changing market. "We are crystallizing value, and we would like to give visibility on 2027," he stated, underscoring Trinity’s long-term vision. Reith also highlighted the potential for high returns, saying, "We believe we’re gonna see very, very good returns."

Risks and Challenges

• Fluctuating solar panel prices could impact project costs.
• Rapid technological changes in battery storage may require continuous adaptation.
• Economic uncertainties in key markets like Latin America and Europe could affect demand.
• Potential supply chain disruptions might delay project timelines.
• Regulatory changes in the renewable energy sector could pose compliance challenges.

Trinity has demonstrated resilience and strategic foresight in Q4 2024, setting a strong foundation for future growth in the dynamic renewable energy landscape.

Full transcript - Greentech Metals Ltd (GRE) Q4 2024:

Ruben Gomez, Head of Investor Relations, Trinity: Okay. So let’s start. Good morning, and welcome to Trinity’s full year twenty twenty four results presentation. I am Ruben Gomez, Head of Investor Relations. The presentation is going to be led by David Reith, our Executive Chairman and CEO Daniel Othano, our Chief of Strategy and Capital Markets Officer and Maria Coimbrand, Senior of the ESG team as a CEO is on maternity leave.

They are going to take you through our business, financial and ESG review. At the end of the presentation, there will be a Q and A session for Societe analysts. Please David, the floor is yours.

David Reith, Executive Chairman and CEO, Trinity: Thank you very much, Ruben. And, good morning, everyone. Good morning, Europe. We we are Daniel and myself, another director in China right now. So it’s afternoon for us.

We are doing this visit every every year, mainly visiting our partners BYD and CTL, and also some other emerging best players, and learning about the very impressive technological breakthroughs that we are witnessing in the industry. Talking about a greenergy, I think overall we posted a very strong set of results growing in all main metrics, revenues, EBITDA, net income. And very importantly, we as we anticipated in the last result conference, we also decreased the level of debt versus last year. And, well, let’s start with our recent highlights. I think as we state in this slide, we are crystallizing the value of Oasis of Atacama.

We sold as we have as well explained 23 total of 23% of total of the project for roughly $1,000,000,000 before the end of twenty twenty four. The multiple of the transaction was 1.6 times EV versus invested capital. So I think it’s it’s a very remarkable, ratio. And, also, we closed at the very end of the year the break finance of Gabriela. So so far, we have achieved financial closing for phases one, two, three, and four.

And, as we will explain in more detail, we are reaching a total debt of 1,000,000,000 project finance in Oasis of Patakama with eight international banks. I think it’s very remarkable. We keep improving on the appraisal execution. The total platform amounted to 16.6 gigawatts of solar. And more importantly, close to 27 gigawatt hours of of of hybrid projects.

We have increased close to one gigawatt and 1.9 gigawatt hour versus the previous quarter and as we will see later in in more detail. In operation and under construction, we have 2.3 gigawatts and 3.6 gigawatt hours, same figure as previous quarter. But, very important difference is that various projects enter into operation in this q four, some more PMGDs and distribution assets in Colombia. And, well, Kiowa, the phase one was allocated under construction, as the batteries were were being installed. With the asset rotations executed in 2023 and 2024 together with the private finance already achieved, I think we really have proof that the investment plan for of 2,600,000,000.0 is is already fully secured.

And in fact, we as we will explain in more detail in one slide, we have accomplished the 600,000,000.0 asset rotation target, two years in advance. So I think we will we will explain this in in more detail. We believe it’s in in and and that’s why we are announcing now a new Capital Markets Day on the May 28. We will we will, it will take place in London. And I think it’s it’s it’s a perfect timing for the company because, well, we will give more visibility on with new PPAs.

We will secure new PPAs in new geographies, and we will also disclose our strategy for standalone segment. So I believe it’s really a transformation of the company. We are really crystalizing value, and we would like to give visibility on on 2027 on on the next three years from 2025 to 2027. Set our new goals for CapEx. So I think it will be a very interesting event.

And again, the the company is is transforming itself, and I think it’s the right time to to explain to the investor community. Continuing to with our financial highlights, that later we’ll be explaining more detail by Daniel. The results have been impacted very positively by the M and A deal of of Oasis of Atacama. The revenues reached $6.43. This is plus 61 percent.

EBITDA, 160,000,000. This is, plus 53% year on year. And net income of 60,000,000. This is plus 17%, year on year. Right?

CapEx, and and this is very important, reached 650,000,000 and increased significantly significantly, plus 77%.

Ruben Gomez, Head of Investor Relations, Trinity: And I

David Reith, Executive Chairman and CEO, Trinity: think it really shows the magnitude of the company we are becoming. We were just investing in CapEx, 200,000,000, only two years ago, and we jumped to 400 and something, $6.50 this year. And, well, we will get very close to 1,000,000,000, this year in 2020, ’20 ’20 ’5. Regarding the leverage, well, there was as expected again is is we saw a massive reduction in in q in q four, the due due to the asset rotation. Again, it’s something that we had planned.

So, we explained that in the in the last, results presentation. And as expected, the net debt has now reached is is now in 566,000,000 versus, 975 in September at the September 2024. The total leverage is 3.6 times. And if you look at just the corporate debt, is just, leverage is 0.77 times EBITDA, right, versus the double digit ratios that we had at the end of of September. We expect that these ratios to even keep decreasing when we submit the q one results in in this year.

We we announced a share buyback of of 40,000,000. We we can give you more more details of how this process is is going. And just to finish this slide, the main ESG highlights that later we’ll be spending more detail by Maria are following. We well, we have successfully accomplished our ESG roadmap. We published our annual sustainability report.

We invite you to to review. It’s it’s been, this year, even if it has not been mandatory, we decided to follow this year CSRD regulation that that was in fact updated yesterday. But I think we we we like to proceed with it with almost 600 data points considered and and audited by by We were again, and we’re very proud to be recognized among the the 50 most sustainable companies in the utility sector by MNCI. And we also ranked in the top 16% 16% of the electric utility sector by stand in force. We’ve also been recognized with very low ESE risk score by Sustainalytics.

And I think all this reflects our strong commitment to sustainability and and and business practices. Moving to business review, our our well, just we’ll review very, very quickly as I explained. The, our platform, solar platform reached 16.6 gigawatts, increasing 0.9 gigawatts. And, the backlog increased significantly, to this 1.1 gigawatt of solar and, six point zero gigawatt hours. So we are talking about plants that will move into under construction very, very soon in the next in the next few few months, even even weeks.

And as you can see on the right hand side, we have a well balanced portfolio in solar in our three main geographies. And, well, again, once again, LATAM is is is a region where where our pipeline is more mature, and we have initiated the hybridization projects. But we will follow, with we will try to replicate replicate the success we are having in Chile in in other markets. I respect this will happen very, very soon. Most of the projects we currently have are already hybrid projects.

It’s, we have been spending this. That is is becoming, harder to to find, stand alone PV projects. Most of the projects in all geographies to some extent are are being hybridized or we are developing as hybrid from from from scratch. Going to the next slide, slide number five, we can see in detail by geography and by country our main pipeline, the different stages. And again, solar PV increased close to one gigawatts and mainly in the regions of Latin American and The US.

And more importantly, because we are crystalizing a lot of value in our hybrid projects, they increase two gigawatt hours mainly in in Europe and Latin America. It’s true that our exposure in the short term is is mainly to more material markets for us, like, material markets for us, like like Chile or Spain. But if you look at the stages of advanced development and mistakes and identified opportunities, you will see how our efforts to diversify pipeline are crystallizing. And and and I think the medium long term, we will achieve a more balanced geographical diversification. Yeah.

Well, moving to our flagship project, our Oasis Of Atacama, it’s it’s a what we show here as we do every quarter, we update, the main data and planning of a flagship project. And and, well, I think it’s, once again, it’s it’s largest best project in in in in Americas, in The Americas for sure with a total capacity of two gigawatts and 11 gigawatt hours, right? We sold the first three phases for a total number of four fifty megawatts of solar and 2.54, gigawatt hours. That’s, again equivalent to around one quarter of total. We sold that to, Global Contour, which is a KKR company.

And I think it’s been a fantastic deal for for both of us. And then the remaining projects is still in our hands and it amounts to 1.5 gigawatts and 8.6 gigawatt hours. Right? We are looking at more opportunities to increase these these these numbers, these figures, and also to replicate the success of Oasis of Patacama in central in Central Chile. Next (LON:NXT) slide is, where we show our main achievements in 2024 and at the beginning of 2025 and what we expect in for for for the whole year 2025.

In 2024, we signed strategic agreements for best supply for phases one and two and and three with BYD and phase four with CATL. We are executing on time even even I I would say a few weeks ahead of time. We are now, concluding the mechanical conclusion, completion of of of phases one and phase two. In fact, phase one is already reenergized. Remember, this was an existing PV plant, and it’s been reenergized.

And I think for the first time, we are equating some of the energy. We are testing the the the the plan with the commissioning phase, but we already delivering nearly at night. And I think it’s it’s a very important milestone for for. Yeah. We also signed the hybrid PPA for phase four.

We will give visibility on new PPAs soon in Chile, for for the rest of the phases. And, well, at the we have closed financing for up to 1,000,000,000. And I think this is, I I I think it’s the deal of the year by far in in in The Americas. Raising 1,000,000,000 for PVVest with five international banks. Another three banks participated in the in the syndicate.

And I think we are very proud of of this of this deal. And and there will be more more coming up for the rest of of the platform. And as you know very well, at the end of the year, we announced them an idea with Control Global, for the first three phases. Right? Yeah.

For the rest of the year, we expect to keep signing PPAs for phases five and six. We have very, very advanced negotiations in Chile. We will be visibility, soon. And on top of this, we expect to conclude the commissioning also phase two and phase three during 2025 before the end of the year. Moving to, well, that’s the summary of of, as I mentioned before, the summary of of the financing.

We initially mandate five international banks. We have worked extremely well with with them, and we are very, very glad, to to to have work with Natixis, Kotia, SocGem, DMP, and Sumitomo. And, again, also top names are have participated in the in the in the syndicate only for phases one and two and and Bank of America, Bank of China, and BBVA (BME:BBVA). And, well, we expect to close financing for phases five and six throughout the year, and there’s a very strong interest in the market and not just these eight names, but but also many other names are willing to participate in our break financing in Chile. And, well, finally, in this in this slide, we we, like to include more details about the successful accent rotations we have accomplished during 2024.

That’s kind of, it’s altogether is an enterprise value of of 1,100,000,000.0. We have protected assets for this EV. And it implies, six twenty five megawatts of solar, 200 and or 2.5 gigawatt hours of of best with a ratio of enterprise value invested capital of 1.5 times. Thanks to to this asset rotation together with the ones we register during 2023, we have obtained more than €640,000,000 of proceeds. And I think if you remember our asset allocation target for the period between 2023 and 2026 were was 600.

So we have achieved this target two years in advance. And I think this give us a lot of flexibility on our CapEx plans, and we will update our plans, not considering twenty twenty twenty seven, both in CapEx and in asset rotation. Regarding 2025, let me remind you that we will deliver Jose Cabernetavernas to Alliance. This this is mechanical completion has been achieved. We are in the process of of reaching COD before the end of q two, and we will transfer as as planned these these plans, I guess, in in the during at the June or July to to to audience.

Well, I I turn the call to Daniel. Thank you very much for for for the business review. Thank you.

Daniel Othano, Chief of Strategy and Capital Markets Officer, Trinity: Thank you, David. So let’s try to quickly, let’s move to the financial operating figure. In this slide, you can see that, well, we have had a small reduction in the total installed capacity that dropped around 3%. But the gross addition has been almost 500 megawatts coming from several assets in Peru, Matarani, in Chile, Grand Tenno, Tamango, Elena, PMDDs, as well as some Colombian asset. So, well, we have been able to to show, you know, that our execution keep growing.

And in in this case, we we have decided to to to rotate some of those asset. So that’s the reason the the the production has experienced a 3% decrease in total output. As you can see, it’s mainly driven by the wind asset we had last year, Duna Wambos in Peru that we sold it, and created a very important equity value for for the company. Realized price decrease to to €50 per megawatt hour. But, well, we we can see that there are good news regarding merchant prices due to the gas price situation and also because we are shifting merchant to nighttime.

So that that the price at night, as you can see, is much higher. So on the right hand side, you can see a summary of the financial KPIs that I will explain later, but, I would like to highlight the company’s strong performance in 2024. Both operationally and financially growth and and and continue executing and expanding the business. So let’s move to next slide. So in slide 11, you can see that the total revenue amounted to $643,000,000 representing a very good increase, 61% year on year.

And as you can see, the growth was full by the M and A transaction as David explained 1,100,000,000 EV. That revenue is in the development and construction division that grow 77%. Regarding energy revenue, that will have grown 2% organically, excluding the asset rotation that we had last year. And retail service grew 2756%, respectively. I will move to next slide that is slide 12.

Sorry. Sorry. I would I would like to mention that, of course, that revenue is showing in the EBITDA that this year, we we have been able to to to show, again growth to 160,000,000. Development and construction because of the asset rotation was the key part of it. But energy division is also providing EBITDA and even through the retail services, they still provide good EBITDA growth.

Then moving to CapEx, slide 12. Well, this is a very nice slide because it’s showing the good execution that, the company is achieving. The the company moved from 2022, fear that at the time was close to 200,000,000 in CapEx in 02/2023, ’3 hundred and ’50 million euros and in 2024, ’6 ’50 million. We have grown an impressive CAGR of 83% annually. And right now, we are showing these execution capabilities because of the possibilities that storage is allowing us to invest.

No? Bust of majority of the amount invested project are in America, specifically in Chile, Four Forty Three Million. Remaining CapEx have been invested in in Spain and a little bit in other Latin countries, the Colombia. And there has been 54,000,000 dedicated to development initiative. That is the key part, you know, in order to be able to deliver the growth we are having.

On the right hand side, we show the CapEx per megawatt in solar and invest. We continue to see CapEx deflation, but this figure we will update it in the capital market data we are going to have in couple of months in London. Then in slide 13, that is the the cash flow that, well, we’re ending the the year with a cash position of €374,000,000. Okay, compared with €121,000,000 at December 2023. So, well, CapEx has primarily been self funded through asset rotation for the equity and project financing for the main part.

As David said, we have been able to close more than $1,000,000,000 for this Oasi of Takama project financing. There has been also some M and A. We now can go into some asset in order to advertise with storage and we did a very good M and A deal with Repsol (OTC:REPYY) eighty two million. And well, still, no, we have more operation coming. Tabernas, Jose Cabrera, Ambron Bank Financial Line as well that are going to allow us to complete, you know, to the the the CapEx plan we have for 2025.

Then moving to slide 14. Well, this is also really impressive the way we have been able to reduce net debt in quarter to $566,000,000. Lever ratio decreased to 3.6 times. No? And corporate to 0.7 times.

If we include the already agreed sale of Jose Cabrera and Tavernas and the pending proceeds from Oasi of Atacama, net debt will stand at 245,000,000. The corporate net debt will be positive. So this show the way we can create cash flows, how quickly we can reduce this leverage ratio through asset rotation. And that’s all from my side. Now, I’m gonna let Maria, that will present, you know, the the main the main ESG highlights that has been even though, you know, the situation regarding ESG is not now in the best moment to talk about, we have been able to to complete the sustainability report with CSRD and many more milestone that we will keep progressing.

Maria? Okay.

Maria Coimbrand, ESG Team Senior, Trinity: Thank you, Danielle. And so good morning, everyone. I’m pleased to share an update on our ESU progress throughout, 02/2024. As part of our ESU roadmap, 02/2024, we have successfully completed several important initiatives on the last, in the last quarter of the year. So to begin with, we have published our biodiversity strategy in line with the recommendations of the task force on nature related financial disclosures, also known as t TNFD.

Furthermore, we have developed a strategy to integrate the achievement of our ESG roadmap goals into the variable compensation plan for all of our employees, aligning remuneration with ESG performance from 2025 onwards. We have also updated our ESG risk map to identify and manage and mission, values and goals with evolving expectations of our stakeholders while promoting long term sustainability. And now let’s move on to the next slide. So I would like to highlight Grenache’s position in ESE ratings, where we have further consolidated our leadership. As you can see in 2024, our CSA score was updated, showing improved results compared to last year.

And notably, MSCI recognized this as one of the 15 most sustainable sustainable companies worldwide in the utility sector, while S and P ranked us in the top 16% also in the electric utility sector. I can say that we are truly proud of these achievements. And so if we go to the next slide. So I also want to bring your attention to our main KPIs from our 2024 exercise, which you can review in our non financial information statement and sustainability report. As you can see, we continue to grow rapidly with a 137 increase percent increase in our workforce since 2021, and 30% of our STEM positions are now held by women.

Our solar PV projects have helped us avoid more than 300,000 tons of emissions contributing to decarbonization and the energy transition. In Oasis of Atacama, we have implemented 28 social and environmental initiatives benefiting more than 2,000 people. We are also committed to biodiversity, as I mentioned before, with clear 2,030 goals. They are aligned with the EU biodiversity strategy aiming for, no net loss, a positive impact, and zero deforestation. And that concludes my update.

Thank you for your attention.

Ruben Gomez, Head of Investor Relations, Trinity: Okay. Thank you very much, Maria. We are now moving to the Q and A session. If you have any question, please send a message to the administrator using the chat available in the tool. Just let us know that you want to ask a question.

You don’t have to write it down. Okay? So let’s wait thirty seconds.

David Reith, Executive Chairman and CEO, Trinity: Okay.

Ruben Gomez, Head of Investor Relations, Trinity: Okay. Okay. I think we can start. First question from Bank of America, Alexander Ranzier. Please go ahead.

Alexander Ranzier, Analyst, Bank of America: Good morning, everyone. Thanks for for taking my question. I just have one, if I May. And and I’m actually gonna, you know, talk about the the share price performance, you know, this morning, which obviously I don’t think really reflects your results nor your execution. And, you know, debating that with, with a few clients and, and with myself, I’m, I’m first, I’m wondering how do you, ascribe, you know, this, this very poor share price performance and implicitly, you know, Also asking, what do you plan to do in terms of addressing liquidity?

Because ultimately I think that’s also, you know, what’s, what’s at play there, for the share price reaction. So is that something ultimately that you are thinking about addressing as well for the capital market that you have something in mind? Cause yeah, I mean, it’s, it’s, it’s really quite striking today that, that, that has us play on, on share price performance. So, so very happy to hear your thoughts on this.

David Reith, Executive Chairman and CEO, Trinity: Okay. Thank you. Thank you very much, Alexander. And, yeah, it’s it’s considering we are delivering the best set of results in our history. We are executing our CapEx plan.

We are delivering plans with higher IR than expected. We are rotating assets two years in advance. So we are more than happy, right? And since we announced the last rotation in with KKR in December, I think our stock has gone up by around 3035%, if not if not close to 40%. It’s definitely a bad day to day.

I don’t think, honestly, it’s it’s that related to our our our stock on to green energy. There is a very important player in the renewal space that I think is going down by 14 or 15%, and it’s a big name. And I think that’s somehow affecting all all the smaller peers. Right? That’s, I believe my my my interpretation of of today’s, but but it’s a bit frustrating.

Right? Because we’ve been going up every day. And today when we submit results, we we are affected by by this. But but anyway, we’ll see we’ll see how the how the day and the week ends. Right?

Let let’s keep in mind that we are not just given a very good results from 2024, but if you look at 2025, not even 50% of the EBITDA coming from the KKR deal has been reflecting the accounts plus the transfer and asset rotations that we already have closed and we will deliver in q two from q or beginning of q three with Allianz (ETR:ALVG). So that’s anticipating very good results for for ’25 as well. Right? In our case. Considering liquidity, I think we’re not doing bad in the last I mean, considering we were doing like a million and 1,000,000, 1 point 5, before, only only three, four months away.

And we are now doing like $23,000,000 most of the days. So obviously, it’s something that we are working, and we it’s a top priority for us, and it will be one of the main focuses in the Capital Markets Day. We really need to attract some investors that they cannot really buy our stock and buy our story because of liquidity, and this is something we we we we we it’s a top priority for us, definitely. And we will do what it takes, right, to to increase increase liquidity.

Alexander Ranzier, Analyst, Bank of America: Right. Looking forward to it then.

David Reith, Executive Chairman and CEO, Trinity: Thank you. Okay. Cheers.

Ruben Gomez, Head of Investor Relations, Trinity: Okay. Thank you very much. RBC, Fernando Garcia, please go ahead.

Fernando Garcia, Analyst, RBC: Hi, good morning. Thank you for the presentation and for taking my questions. For Assis of Atacama in phases five and six, I know that you have said that you expect, financing and PPAs, happening during 2025, but I don’t know if you can give us a closer indication on where do you expect this happening, if in Q2 or Q3, etcetera. Then, David, I saw your nice picture in my LinkedIn today with the founder of CATL. I see now you have the logo of a big YD, here and there.

So so then, I mean, you’re clearly showing in this representation that you created a lot of value in the in the co located large, batteries project. No? As now, you are going to move a little bit to stand alone project, where there are other things that you have to manage, like grid connection, probably smaller smaller projects. I would like to know your thoughts about, you know, how you can differentiate there as well and create value. Thank you.

David Reith, Executive Chairman and CEO, Trinity: Okay. Thanks, Fernando, for your for your questions. Well, we we were we were, with Robin yesterday. Robin Feng is the founder of of CATL. And, and I and I think in my opinion, he’s he’s been the most important character in in the industry.

I think he started CATL from scratch, and he has a market share of 40% in in both in ESS, where the batteries we use, and electric vehicle. He’s really the main, the main player and the main disruptor in something as important as it is for energy transition as batteries are, both in mobility, right, in electric vehicle and in storage for energy generation. And and and and and and and need they they have achieved 4%, market share worldwide. It’s really remarkable. It’s it’s really the the big name in in the industry, and I I I was so lucky to spend nearly 1 hour with him.

I’m a very nice guy. I’m very humble, and I and and it’s been really an experience. Right? And and we, you know, we we, we are working with CATL for phase four, Gabriela of. And we’ve been working very successfully with BYD.

We were just today in Fujian in in in the headquarters of of CATL, and and today, we are in BYD Shenzhen. And I think it’s it’s the other big name. They have close to 25% market share, and I think it’s the other big name. And, and I and and and that’s something I think we should keep working with the leaders and invest. The market and the industry is changing a lot.

You know, they’re talking now about sodium, batteries instead of maybe two years from now for for large ESS plants. You will we will see very important disruptions. I think in the Capital Markets Day, we will spend some time explaining how the new batteries are are going to disrupt in next year as early as next year. They’re not talking about placing, 12, today, be well, this is public information, but BYD just announced that they will have a product, of 12 megawatt hour per 20 feet well, 24 feet container. Is part of, custom made containers they will make, and they will put two containers together.

So in a very small amount of of land, they will place 24 megawatt hours. So that’s very, very impressive. And this is happening very quickly, and and and it will really revolutionize the the the storage industry. And replying to PPAs, Fernando, we we are working in in all geographies. We are working in Chile.

I think, we still have very good momentum. The CapEx has gone down a lot. The, PPA prices will be, also in a lower levels, but I think all in all, we will keep the same IRR is not if not better than than the first PPAs we we closed, and we will announce some PPAs I think as early as as the beginning of of of q two. I I think we will try to bring some something for for Capital Markets Day definitely. Right?

And in Europe, well, we are working both in hybrid PPAs as as as you know, similar to Oasis Fantacama, and I think Scudero’s plan will be the first one we will announce in Spain. We have a 200 megawatt PV plan that we will have today. We are looking at hybrid plans in The UK, but our main focus will be stand alone, as you know. And we will leave a lot of visibility. We have been working very hard on our stand alone pipeline.

So far, we have not announced any, you know, public information about this pipeline, but we will it will be a main topic in our in our Capital Markets Day.

Ruben Gomez, Head of Investor Relations, Trinity: Okay. Thank you very much. Next question from Berenberg. Henry, please go ahead.

Henry, Analyst, Berenberg: Hi. Thanks for taking my questions. I have two. One, just to follow

Thibault, Analyst, Bernstein: on from

Henry, Analyst, Berenberg: that statement on the standalone BESS pipeline that you’re building up. What is it that you look for in a country or a jurisdiction that makes the economics here attractive for BESS? Is it do you need government support in terms of capacity payments, etcetera? Or are there areas and regions where the price spread day night is sufficiently attractive that you think you can make good money? And then the second question, I think there were some impairments announced in Q4 on some of the projects.

Could you just give me a little bit more color on the projects and what was going on there? Thank you.

David Reith, Executive Chairman and CEO, Trinity: Okay. Going, going going to the, the question about standalone, it’s it’s something, you know, in the in in the first Capital Markets Day, we we we organized back in, I think, was November 2023, if I’m not mistaken. Right? It’s been a year, a year and a half, roughly. And, we spent a lot of time explaining, oases of Atagama and how the hybrid plants, the economics of of of PV vessels were were gonna work.

And I think we have deliver in in in the last year. Right? We have finance. We have protected assets. And and and it’s it’s really happening.

Right? Even even faster than we expected and then a higher IRR is easier for everyone to understand. Right? Because it’s pretty simple. It’s more based on on on storing the energy and delivering that energy at at at the peak hours or at night at the highest potential price.

So, we will spend a lot of time in the Capital Markets Day explaining how the economics of stand alone projects work. Right? And and as you say, it’s it’s more complex. Right? You have different revenue stacks.

I think the main the main, the main driver is is now storage. Right? No matter what you look at. Sorry. It’s it’s trading.

It’s trading. So basically, storing the energy when when the that energy is is is is is is cheaper and delivering that energy when when the energy is is is is, you know, you you get a higher price for for for merchant. You can also secure that, level through a long term agreement. So what we call tolling agreements. Right?

So those will be similar to the PPAs, but it will be more we are calling them, tolling tolling agreements. Right? So in the long term, we get a hedge on the day ahead. They could be as as long as ten years. Right?

So that’s that’s the main revenue stack. But also in some markets, there in The UK as an example, I think either you have access to a capacity payment or capacity market or economics don’t work as well. There are other markets like Spain where we believe that just trading and, accessing all other markets like frequency regulation, secondary and tertiary and ancillary services. I think economics will work pretty well. We have also some subsidies in some in some projects, coming from the funds.

So it’s it’s it’s more complex to explain, but we believe we’re gonna see very, very good returns. In some markets, it will be sufficiently attractive just with the trading, like is the case of Spain. Even if Spain has announced some capacity auctions as well. Right? Germany has announced also some auctions capacity auctions, but, I mean, I think it will happen a year and a year and a half from now.

I think Spain will happen in the next next two months. Right? But even without these capacity payments, I think numbers will work. We we will spend a lot of time going market by market, what is our approach, and where are the upsides. And and again, time to market is gonna be very important.

Right? Every if you are able to connect one project one year earlier. It’s gonna have higher value than than a market one one year later. Right? And about the impairment.

Right? It’s, I think Daniel will give you more details on on this question. It’s it’s also very important to explain that the bigger we are, the more we spend on development CapEx. Right? We and and and this is we create a lot of value.

Right? Thanks to this DEVX, we are able to produce, projects like the ones we have in Odysseus of Atacama. Right? And other geographies. But we also, at the end of the year, we analyze which projects are not we are not very sure or there’s a very high possibility that they go ahead.

So we we write them off even if this write off in some cases could be re re reverse. Right? And I think there has been an impairment in in Colombia as well. But Daniel can can give more visibility on on on on the on this.

Daniel Othano, Chief of Strategy and Capital Markets Officer, Trinity: Exactly. It’s it’s about that that, we have had €5,500,000 write off coming from development CapEx of project that, we we have considered not to to to carry on. And we are developing many gigawatts. We’re we’re lucky. We have we have a very good development team that is making real most of the pipeline we’re developing, but, but then there are some project to finally cannot reach a status.

And in this case, has been €5,500,000. Then the rest is project asset deterioration mainly in Colombia, Eleven Point Six Million. But be in mind that this can be reverted. This is a contingency impairment test that we had had, in case we, for instance, decide to sell. Those Colombian asset that we have been spoken about this openly that, we we we don’t want to to to we would like to to invest equity in some of the Latin market, but mainly Chile and Colombian asset might be.

So if we reach the devaluation we’re talking and normally obtaining, this will be reverted. And the the total impairment will be just that €5,500,000 deterioration.

Ruben Gomez, Head of Investor Relations, Trinity: Okay. Thank you. Next question from Alantra, Fernando La Fuente. Please go ahead.

Fernando La Fuente, Analyst, Alantra: Hello. Good morning, everyone. And two quick questions for me. The first one, the VD is on a follow-up on your PPAs strategy. If I look at what you have signed in Atacama, the first PPAs were, basic night PPA.

And the fourth one has been an hybrid one. What is the trend now for the next phases? Are you looking for signing hybrid PPAs or it’s going back again to night PPAs? Just wanted to have a little bit of color on that side. And the second question is on your cash movements for 2025.

It would be great if you could give us a little bit of color on the CapEx that you expect for this year or so proceeds from this process already agreed. Then also if you are looking for additional disposals to have a sense of what could be sold. And lastly, if you have an estimate of where should net debt end the year 2025. Thank you so much.

David Reith, Executive Chairman and CEO, Trinity: Thank you, Fernando. I’m I I might leave Daniel a second one. Right? I’m not sure if we can give those those this guidance. Right?

But I can I can say that we are working in new disposals, and we will see new new disposals, particularly on on on segments that are not longer our priority like PNGDs in Chile, and we still have roughly 200 megawatts? And, and and, well, the equivalent to PNGDs in Colombia that we have a very, very advanced deal as we have been spoken for for a long time. It takes longer than other markets, but I think we will have some visibility even at the end of this quarter or early early next quarter. Right? But but, you know, sometimes it’s opportunistic.

Right? And and I think we it’s in Spanish market is getting very hot again. So I don’t know. We we had planned to keep, scuderos. Scuderos might be might be, hybridated, right?

So we will keep that in our portfolio. But, Agiorac could be could be another rotation target potentially, right? And there is a very strong interest in in the Spanish market as well again. And going to, well, your question about the PPA strategy, it’s, you know, in PPA’s are more complex when you have storage. No no two PPA’s are the same.

So it’s true that we we the first ones were nine PPAs. We were basically selling the energy just at night. The one we made for phase four was a hybrid, PPA as well. We have one price for the energy we deliver during the day plus another kind of a tolling agreement for whatever we store. Right?

And well, we the the new PPS we announced, I think are are gonna be more night PPAs. Right? But we are also working some hybrid and we will also announce, I believe, some new, purely p, PV, PPAs. It’s it’s the the market is changing a lot. Right now, there there is a big change in the in the matrix of in in Chile that will eventually happen in other markets thanks to the quick introduction of PVVEST.

So we will see again a very high interest of of daily, purely PV PPAs. So, you know, so so the market changes very, very quickly. So, but anyway, whenever we announce PPAs, we will give give, more more visibility.

Daniel Othano, Chief of Strategy and Capital Markets Officer, Trinity: Okay. And from my side, what I can tell you is that even though we have just shown $110,000,000 EBITDA in 2024 coming from Oasi of Atacama deal. Well, we as you can see, we have anticipated most of the cash flow coming from that operation. There is still another close to $70,000,000 coming from that deal. And in the case of what we have more operation, Jose Cabrera and Tavernas, I think the EBITDA of that deal capital gains will be close $70,000,000 to $80,000,000 depending on final earn out.

And the cash flow should be $110,000,000.120 both capital gain and equity recycling. Then regarding net debt, it will depend on the cap as we will invest during the year. This is something we would like to explain in Capital Markets Day. I can tell you that this year, we have invested hundred and €50,000,000. If you made some numbers, you you will see that that the figure to be even above 1,000,000,000 CapEx investment this year.

That will be reflected partially in the net debt depending on supplier facility. So so that will not be 100% affecting 2025 figure. Anyway, there there is a lot of cash flows coming in, a lot of CapEx to be invested. And then, as you know, we are always working on asset rotation with good valuation, capital gains, and equity recycle might appear and affect positively again to the net debt.

Ruben Gomez, Head of Investor Relations, Trinity: Okay. Thank you very much. Next question from Bernstein. Thibault, please go ahead.

Thibault, Analyst, Bernstein: Hello. Good morning. Thank you very much for taking my question. My first question would be regarding the load factor. I see on slide 10, a lower factor in 24.

May I ask what are the driver for it? And may I ask what is potentially the impact from Contenu and Temango that are not fully in operation, I guess? And but I guess they were already commissioned last year. So this this will be my my first question. The second one would be regarding the procurement cost.

Do you anticipate lower cost out of stabilization? Yeah. That will be my two first questions.

David Reith, Executive Chairman and CEO, Trinity: Okay. Thank you. Thank you very much, Tibol. I’m looking at the slide 10. I believe, and maybe Daniel can add that.

Daniel Othano, Chief of Strategy and Capital Markets Officer, Trinity: Yeah. The very easy load factor is Yeah. Slower because of the very high load factor that our wind project, Duma Wambos, had in Peru close to 5,000 hours. So so that is the main reason. The comparison with solar that is around 2,000 is making the number bigger.

David Reith, Executive Chairman and CEO, Trinity: Yeah. And Tener Tamango, I think they got delayed a few months particularly TENO to be fully operative, right, Daniel? So if you compare to the figures. Anyway both plants are fine. They should be, we are also looking at hybridation in these two plants, right?

And, we will give also visibility very very soon on on PPAs and our strategy concerning Central Chile. Right? Because again, we don’t see we see a lot of value in a lot more value in in the habitation of of the plants, delivering the energy at a way higher price at night. So every single plan we have purely solar, I think will be to some extent, hybridized. I think your sorry, what was the second question?

Thibault, Analyst, Bernstein: It was on procurement cost and evolution of CapEx per megawatt for both solar and

David Reith, Executive Chairman and CEO, Trinity: Yeah, it is. Yes, it’s a very good yeah, yeah, I remember it’s a very good question, Thibaut. I think it’s, if you ask me about solar, I think we are record low levels. Well, it’s time to I wouldn’t expect really either or not really, but the possibility of even some increases in solar in solar panels. Remember there we are now procuring panels for as low as eight or eight point five cents, right?

Even some spot prices below 8. I think this is not really sustainable. Just if you look at the results of the main manufacturers, it’s very clear that that I don’t think that’s longer sustainable. Whether that increase is up to nine to 10 or will there will remains at eight, we will see. But I think it’s good time to hedge all your needs for panels for for for the year.

This is what we see. That’s in solar. In BES, well, we see there has been a decrease, way, faster than we all expected. Right? I still believe that we will see further decreases in in the case of VES, and and that’s the feeling I’m getting because the efficiency gains are are happening in the industry way faster than anybody expected.

Right? And and I think the the, we we will see some more decreases in in the in the near future. That’s my expectation. But again, it depends on on many on many factors.

Thibault, Analyst, Bernstein: Thank you very much. And just to double check on load factor, do do you achieve the targeted load factor on existing farms? You gave the number of hours expected. Do do you is it in on track?

David Reith, Executive Chairman and CEO, Trinity: Yeah. I believe it’s on track and nothing remarkable has changed.

Daniel Othano, Chief of Strategy and Capital Markets Officer, Trinity: Thank you very much. Maybe if I Yeah. There is a small negative effect in the production of Kiowa during several months because in this particular plan, during the the abbreviation, we we have to stop it in order to be able to to to to have the the substation works. Okay? That is just happening to Kiowa.

It was affecting production, but not a lot of revenue. For incoming hybridation project, this will not happen. Okay?

David Reith, Executive Chairman and CEO, Trinity: You know, we in order to hybridate, Kiowa, we had to disconnect the substation for around two two months, Daniel, three months. Yeah. But we were talking about the summer months with with plenty of very low prices and even sometimes could could payments. So it has really affect affected the figure of kilowatt of production, but not really the turnover. The plan was reconnected again like as I said before, I think last week.

Yeah.

Thibault, Analyst, Bernstein: Thank you very much. And in terms of guidance 2025, should we expect it at the CNG? Could you give some light, some color on this one?

David Reith, Executive Chairman and CEO, Trinity: Sorry, guidance on?

Thibault, Analyst, Bernstein: On this year, both net debt or both net income and EBITDA, do you expect to deliver some guidance in terms of the CMD?

David Reith, Executive Chairman and CEO, Trinity: We don’t provide yearly guidance. So we we have provided a three year plan, right, with a CapEx of 2,600,000,000.0 that that we now state that we are more than ready to to meet. That was between ’23 and ’26. We also provided a rotation proceeds of 600,000,000 that we have already achieved two years before, right, on target. And, we will provide visibility on 2027 in the Capital Markets Day.

But we don’t provide guidance, I’m sorry, for but many analysts are giving their estimations.

Thibault, Analyst, Bernstein: Thank you.

David Reith, Executive Chairman and CEO, Trinity: Thank you. Okay.

Ruben Gomez, Head of Investor Relations, Trinity: And last question from, Temi at Barclays (LON:BARC). Please go ahead.

Henry, Analyst, Berenberg: Hi. Can you hear me?

David Reith, Executive Chairman and CEO, Trinity: With Samiko.

Ruben Gomez, Head of Investor Relations, Trinity: But yes.

Henry, Analyst, Berenberg: Policies.

Ruben Gomez, Head of Investor Relations, Trinity: Okay. Tell (WA:OEXP) me, if you want, you can text us the the question

David Reith, Executive Chairman and CEO, Trinity: in the chat. Maybe in the chat.

Ruben Gomez, Head of Investor Relations, Trinity: We can read it. Okay?

David Reith, Executive Chairman and CEO, Trinity: We have not received yet the the question. Let’s see if he writes.

Ruben Gomez, Head of Investor Relations, Trinity: Okay. He wants a color on PPA prices. And if you have already covered the expectations of the targets of the previous Capital Markets Day? Those are the two questions from Temi. The color how we are seeing that the PPA prices are evolving?

David Reith, Executive Chairman and CEO, Trinity: Well, we we, you know, with the the market is changing quite a lot, and we are moving more to hybrid PPAs, night PPAs, stalling agreements. So we are talking about different animals. Right? So it’s hard to compare apples with apples. If if you look at purely solar PPAs in Europe, I think the the price has gone down by by 15, even 20%, but the CapEx has gone down more or less the the same.

Right? So I think it’s it’s, that’s that’s how the picture looks like in Europe. If you look at Chile, night PPAs, we we closed them in the well, we don’t disclose the the price, but they were definitely in the high eighties, and they will be they might be in the high seventies. Right? So remember that those are index, right, to to CPI.

But again, the the CapEx has even decreased drastically, so we expect to remain with the same IRRs. So that’s the how how the the picture looks like in the PPA market.

Ruben Gomez, Head of Investor Relations, Trinity: Okay. So thank you very much for attending, and see you again in our next quarterly results presentation. If you have more doubts, please contact the IR team. So thank you very much.

David Reith, Executive Chairman and CEO, Trinity: Thank you very much. Have a great day. Thank you.

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