Encevo Group Net Profit Down 44% to €38m in 2020

Luxembourg-based energy provider Encevo Group recently announced its financial results for 2020, a year marked largely by the COVID-19 pandemic.

Although the health crisis impacted last year's results, Encevo Group boasted good operational performance. Not only did it maintain security of supply and customer services throughout the crisis, but the solid foundations on which the group is based enabled it to continue its development and move forward in the sustainable energy transition.

In 2020, the group posted a net profit of €38.2 million, down 43.7% from €67.9 million the previous year. Nevertheless, EBITDA increased from €211.9 million in 2019 to €223.3 million in 2020. The group therefore posted solid performance despite the health crisis and its economic repercussions; volumes in terms of energy sales, both for electricity and natural gas, were down compared to 2019 and all sectors except residential have been affected.

Nevertheless, the group reached a new record level in terms of investments at €252.1 million, including €180 million just for network activities. The major part of these investments for Creos Luxembourg concerned the modernisation of the networks, especially the electricity networks. Creos has also launched the 380 project, which consists in the construction of a very high voltage line to replace the existing infrastructure, which dates from the 1960s and which will no longer be able to safely cover the ever-increasing needs for electricity. The deployment of smart metres is almost complete and will contribute to the development of smart grids essential for the success of a sustainable energy transition. The number of public charging stations for electric vehicles has also increased to 400 stations, including the first “SuperChargy” fast-charging stations.

Decarbonisation and renewable energies

Creos is also working on the modernisation of its gas network and on the the capacity of the networks to accommodate more green gas (biogas and hydrogen) with a view to a decarbonised energy world. Several such initiatives are supported by the various entities of the group, in particular a pioneering project in the Saar-Lor-Lux region for the conversion of networks from natural gas to hydrogen in which Creos Deutschland is participating.

Increasing the share of renewable energies is another key element of a sustainable energy transition. Consequently, the installed production capacity in renewable energies increased further to 358 MW (333 MW in 2019) including 184 MW in Luxembourg. It is mainly wind and photovoltaic energy that are recording an increase in terms of production. As well as repowering a wind farm, a new wind farm was connected to the grid in the town of Garnich in southwestern Luxembourg. Regarding photovoltaic energy, several new Enovos installations were connected during 2020 in Luxembourg but also in the Netherlands.

New wind projects are emerging for 2022 in Luxembourg and Germany. The country's photovoltaic footprint, as well as that of the Greater Region, is also set to grow considerably. Innovative projects, such as floating photovoltaic systems, are being developed in Luxembourg while in Germany, photovoltaic installations with a total capacity of 200 MW are planned for development in the next two years in Rhineland-Palatinate.

The field of technical services experienced a year of consolidation. The Encevo Group acquired all of the shares in Global Facilities, a subsidiary until then 50% owned, as well as a majority stake in Minusines. Despite a lockdown effect, the field of technical services further developed in a promising way. The new skills acquired in the field of energy transition have been put to good use, which has mainly resulted in an increase in the number of photovoltaic power plants installed but also of recharging stations connected to the networks.

Investments

The sustainable energy transition to a sustainable energy world will require further efforts, as reflected in the group's record level of investment over the past year. Moreover, the group plans to invest €1.3 billion by 2025. Most of these investments concern networks (more than 800 million in Luxembourg alone), but also the production of green energy (photovoltaic and wind) at the local level as well as in neighbouring countries and regions (Germany, Belgium, the Netherlands and potentially France).

The COVID-19 crisis will continue to be a challenge for most of the group's activities in 2021. The uncertainties that accompany this crisis further reinforce the difficulty of the energy context.

In 2020, the number of employees of Encevo Group amounted to 2,164 people (average over the year; compared to 1,972 people in 2019).

The full annual report is available at www.encevo.eu.