Encevo Posts €171m Net Profit for 2023

On Wednesday 15 May 2024, Luxembourg energy player Encevo Group published its financial results for 2023.

Encevo described 2023 as a "pivotal year", during which "significant progress" was made in the transition to sustainable energy.

Last year, the group posted a net profit of €171 million, up from €107 million in 2022 (+59.8%). Encevo said a "major" part of this profit came from the markets and networks sectors, in which "particularly large" investments have been made in recent years. Its operating result (EBITDA) increased proportionally less than its net profit, reaching €316 million in 2023 (vs €268 million in 2022). The biggest fluctuation was again observed in turnover, which increased by €1.6 billion (from about €3.4 billion to more than €5 billion).

Encevo added it had "substantially" increased its investments in 2023: the total of €336 million (vs €272 million in 2022) invested by the group constitutes "a new peak".

Encevo also noted that the group had been "partially reorganised" at management level in 2023. Jean-Luc Santinelli, CEO of Teseos, joined the executive committee of Encevo in April 2023. Then, in July 2023, Laurence Zenner, new CEO of network manager Creos, completed the executive committee.

The group said that its main challenge remained to "refocus on future themes, in a context of high market price volatility and geopolitical uncertainty, without losing sight of current risks". The group reported that it had been possible to continue to keep market volatility away from end customers and protect them from "extreme" price fluctuations through the "far-sighted" procurement strategy of the energy supplier Enovos. Government measures such as curbing energy prices and covering gas network costs also played an "important" role in providing financial relief to end customers, according to the group.

Encevo added that it had made further progress in all areas on the path to a sustainable energy landscape in Luxembourg and the Greater Region. An important element cited was energy savings, which increased again last year, with a total of 170 GWh (vs 160 GWh in 2022).

The group noted that this progress was most pronounced in the development of renewable energies. Across the group's entities, installed renewable energy capacity jumped to 516 MW (vs 388 MW in 2022), an increase of about 33%. Energy production from renewable sources increased by 25% compared to the previous year to 849 GWh (vs 680 GWh in 2022). The main drivers of this growth were the large wind farm projects in Luxembourg (via the Soler joint venture between Enovos and SEO). The flagship project "Südeifel" has also made "significant" progress, explained the group: in recent months, Enovos has been able to connect a series of photovoltaic parks at eleven locations in Rhineland-Palatinate (Germany) to the grid with an installed capacity of more than 200 MW. In April 2024, the park was officially inaugurated and it constitutes the largest ground-mounted photovoltaic project in the Greater Region. Encevo added that growth in the field of photovoltaics in the Netherlands and the planned launch of projects in France "underline the group's anchoring in the Greater Region and the Benelux".

The group noted that the progression of renewable energies is set to continue in the coming years. Innovative projects are being developed, particularly in the field of photovoltaics, and more specifically in that of agri-PV where agricultural exploitation and energy production can be combined on dedicated areas, while promoting biodiversity, it said.

Looking ahead, the group described efficient energy networks as "the key to success" in progressing in the energy transition. It specified that €231 million of its total investment of €336 million last year went into energy networks. Creos Luxembourg alone invested €190 million, including €148 million in the electricity networks. Regarding the energy networks of the future, work mainly focuses on hydrogen networks, explained Encevo. Creos Luxembourg is working with partners in Belgium and France on the theme of interconnections and links with hydrogen transport networks at European level. In Germany, Creos Deutschland continues to work on the mosaHYc project aimed at transforming parts of natural gas networks into hydrogen infrastructure in the Greater Region, with connection to the future Luxembourg network.

Moreover, Encevo pointed out that the technical services sector, under the leadership of Teseos, has developed and become a "full-fledged pillar" of the group which is essential for bringing the energy transition to the widest possible audience. The range of products and services has been expanded, for example in the area of heat pumps or PV systems for self-consumption. Overall, entities in this sector continued to expand their activities in the directions deemed necessary for the success of the sustainable energy transition. Encevo confirmed that the range of services would be further expanded in the years to come, with the aim of advancing the energy transition at all levels.

In terms of challenges, the group said that the coming months are expected to remain marked by a certain degree of uncertainty, particularly due to the geopolitical context, both regarding energy prices and security of supply. It stressed that the climate crisis also requires additional efforts in energy efficiency and the development of renewable energies. As such, Encevo assured it would continue to "consolidate and consistently develop" the pillars of its strategy, namely renewable energies and energy supply, energy networks and technical services. It thus plans to maintain investments at a high level in the coming years, to ensure the continued transition to a sustainable energy world. To achieve this objective, the Encevo Group said it has committed itself to the entire energy value chain and can "count on the commitment" of its 2,841 employees (as of 31 December 2023; vs 2,521 in 2022).

The full annual report is available online at https://www.encevo.eu/en/.