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CEO Kirsi Suopelto on 22nd August 2024: The first half of 2024 met our expectations
““The Meriaura Group’s first half of 2024 met our expectations. Both our revenue and profitability improved. Our revenue for January–June was EUR 40 million, which means an increase of 27% from the previous year. Both our business areas’ revenue developed strongly, particularly in the second quarter. After the strikes in the early part of the year, the demand for marine transport returned to normal levels and, as usual, decreased towards the end of the period because of the summer holiday season. The demand for project shipments remained strong throughout the review period.
In the first half of the year, Marine Logistics’ revenue was EUR 34.1 million, and Renewable Energy’s revenue was EUR 5.8 million.
Renewable Energy’s revenue was boosted especially by the delivery of a solar thermal plant to Bad Rappenau in Germany and by Rasol Oy, a solar power system supplier acquired in November 2023. The integration of Rasol Oy’s operations into the Renewable Energy business has progressed as planned. However, revenue from solar power systems fell short of our expectations in the early part of the year, as challenging weather conditions and strikes delayed installation and demand slowed as a result of the stabilisation of energy price fluctuations.
Our profitability also improved, particularly in the second quarter. Our EBITDA for the second quarter was EUR 2.3 million, or 10.4% of revenue. Our EBITDA for January–June was EUR 3.5 million, or 8.7% of revenue, compared with 8.3% in the previous year. The EBITDA was primarily boosted by improved profitability in Renewable Energy as a result of higher revenue. The operating result (EBIT) for January-June turned to positive, and was MEUR 0.6 million, or 1.5% of revenue.
The most significant events in the second quarter included two new orders for Renewable Energy. The solar thermal plant to be built in Palau-del-Vidre in France will provide heat to the greenhouses of Les Serres Vermeil SARL, which grows organic vegetables, and will be our first delivery to this customer segment. The project (around EUR 1.7 million) has been developed in collaboration with Eiffage Energie Systèmes – Cogénération SAS, one of the largest construction groups in France. The other new order is a solar thermal plant (around EUR 5 million) for the City of Lübeck district heating company.
In Marine Logistics, we placed a significant order in the second quarter for two new Eco Trader cargo vessels from Bodewes International Shipbuilding B.V. in the Netherlands. The construction of these energy-efficient bio-oil-fuelled vessels has started, and the vessels will be handed over to us in January and December 2026. The total value of the order is around EUR 34 million.
We expect the demand for both our marine logistics services and renewable energy solutions to continue to be stable. This is based on our strong order backlog in both bulk transport and project shipments, and on customers’ growing interest in low-emission transport. However, general economic uncertainty may affect the demand for and price level of marine transport. In the renewable energy market, interest in clean and low-emission forms of energy is growing. The trend is supported by tighter emission reduction requirements and expectations of lower financing costs.
It has been great to develop two businesses with ambitious sustainability goals. Now as I leave the company for new duties, these businesses are well-positioned to meet customers’ needs in a constantly changing operating environment. I would like to take this opportunity to thank all our partners, customers and shareholders, and especially our employees, for a rewarding time at Meriaura Group.”
– Meriaura Group´s Half-year release, on 22nd August 2024
Managing Director Jari Varjotie: “Interest towards solar heat is stronger than ever before, and our sales and system design teams are actively supporting both our current and potential new customers, especially in Europe, to find solutions for the deployment of emission-free and reliable thermal energy. However, we did not yet receive any new customer orders in the third quarter.
In addition to climate targets, interest in large-scale solar thermal systems is growing especially in response to the need for energy self-sufficiency and the price competitiveness of solar heat. In addition, the utilisation of solar heat also accelerates the transition to clean energy production when emission-free electricity of limited availability can be utilised elsewhere than in heat production. Heat accounts for about half of all energy consumption in Europe and globally. However, in the short term, the turbulent energy market and the general uncertainty of the economic outlook hinder the customers’ decision-making.
Our revenue in January–September grew by 35 per cent compared to corresponding period of the previous year and was EUR 2.9 million. The third quarter accounted for EUR 0.8 million of the revenue. During the current year, the net result has been weakened by the increase in material costs, which we have been unable to fully transfer to the previously agreed-upon fixed customer prices. In new tenders, we have taken the changes in material costs into account more strongly than before. Our order backlog at the end of September stood at EUR 1.0 million, compared to EUR 0.6 million a year ago.
Our new deliveries started this year are progressing as planned both in Verdun, France, and in Sonora, Mexico.
Dozens of large-scale solar thermal systems are planned in Europe and are awaiting implementation decisions. Energy companies’ investment decisions in particular are currently being complicated not only by the turbulence in the energy market, but also by the compelling need for energy companies to deposit cash collateral for the amounts under their previously agreed-upon fixed supply contracts when the price of energy has risen dramatically. In industrial process heating, the maker of the investment decision is often a party other than a traditional energy company, for which reason they are not faced with a similar deposit collateral problem. As it is, industrial process heating has become even more promising than the district heating market, at least in the short term. Industrial process heating has already been a strong segment for us, as evidenced by our recent deliveries to Issoudun and Verdun.
A new phase in Savosolar’s business development will begin if the aforementioned conditional share exchange agreement is implemented, in which case we will get VG-Shipping, a company specialised in low-carbon and sustainable transport, as our anchor owner. VG-Shipping has a strong track record in successful business development in marine logistics and in the production and utilisation of renewable energy. Together with Meriaura, a company currently owned by VG-Shipping, we can meet the growing demand for solutions based on renewable energy and fill the supply gap. The objective of the merger is to speed up business expansion in solar heat and in various sustainable hybrid solutions for energy and heat production, as well as in low-carbon marine logistics and other projects promoting the green transition. The planning of the new group’s operations and strategy has proceeded well. We expect the merger to be completed by the end of November.
Even though the recent turbulence in the energy market has held back investment decisions, I believe that the growth of large-scale solar heat utilisation will accelerate, and I see than the merger with Meriaura will increase our ability to respond to growing demand both financially and by expanding supply. The group that will be formed as a result of the share exchange will be able to better address customer needs and significantly increase the shareholder value.”
– Savosolar´s January-September Business review on October 26th, 2022
Managing Director Bengt-Erik Rosin, Meriaura: “Meriaura’s third quarter was strong and the best summer quarter in the company’s history. Turnover increased by 50 per cent compared to the comparison period and was EUR 20.4 million. The net result also clearly improved and was EUR 3.6 million, being EUR 1.5 million a year ago.
However, the data are not directly comparable with the previous year due to the business deals that took place at the turn of 2021/2022. In the business deals Meriaura took over the shipping business from the owner company VG-Shipping and the administrative business from Aura Mare Ltd. This has improved the turnover approximately four per cent. The cost impact has been mainly structural, as previously leased vessels and purchased services were transferred to our own ownership. The turnover in January-September increased from approximately EUR 39 million to nearly EUR 54 million, and operating profit from EUR 3.5 million to EUR 7.8 million.
Traditionally, the demand for sea transport is weaker in the third quarter than at the beginning of the year. Last summer too, a slight and momentary drop in demand was experienced during the holiday season, but thanks to successful advance sales and contract coverage, our ships were well employed, and profitability remained good.
Demand was strong both in our main market area in Northern Europe, and in other parts of continental Europe and the Mediterranean. About 60 percent of the turnover in the third quarter was made up of the bulk business. More than 70 per cent of that accumulated from cargoes of contract customer.
The deck cargo ships of project logistics transports were also well employed throughout the quarter. During the review period, transports to a wind power project in Norway employed the vessels, and harbor cranes were transported both to Iceland and the Mediterranean. The share of project logistics was slightly less than 30 percent of turnover. The sharply increased fuel price significantly increased turnover, but due to the fuel clauses in the transport contracts, the effect on the result in terms of euros was minor.
As for the rest of the business, the third quarter was the main period for gypsum application of the Kipsi project. Gypsum was applied about 35 per cent less than a year earlier. In July-August, the share of other business was about 10 percent of the company’s turnover.
Meriaura’s owner company VG-Shipping and Savosolar entered into a conditional agreement to sell Meriaura’s entire shareholding to Savosolar. Other significant events include selling the vessel Mirva VG to a long-term partner, Helmer Lundstöm Ab. In connection with the sale, were concluded a long-term time chartering contract for the ship, and the ship’s operation continued without interruption. In September we signed a letter of intent together with GreenNortH2 Energy and Wärtsilä on the design and construction of a cargo ship using green ammonia as fuel.”
-Business Review January-September, 26 October 2022Meriaura