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November 2, 2022

Aker Horizons ASA: Third-Quarter Results 2022

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Aker Horizons ASA (OSE: “AKH”), a developer of green energy and green industry, today announced results for the third quarter 2022. The company’s Net Asset Value (“NAV”) fell to NOK 16.5 billion in the three months to 30 September 2022, from NOK 17.4 billion at the end of the previous quarter.

Third-quarter highlights:

  • The combination of portfolio companies Mainstream Renewable Power and Aker Offshore Wind was completed, establishing Mainstream as a global frontrunner in offshore wind and creating a stronger renewable company with a 19 GW net global pipeline of projects under development, construction and operation across solar, onshore wind and offshore wind
  • Mainstream and Actis signed an agreement to sell Lekela Power, Africa’s largest pure-play renewable energy independent power producer, to Infinity Group and Africa Finance Corporation
  • Mainstream and its partner Ocean Winds were appointed preferred bidder by Crown Estate Scotland for an area with the potential for a 1.8 GW offshore wind farm off the Shetland Islands in Scotland
  • Aker Horizons signed a land lease agreement and entered a Power Purchase Agreement with the local municipality for the 20 MW first phase of the hydrogen project planned at Rjukan

“Our market segment continues to be shaped by inflation, supply chain bottlenecks and delays in permitting processes, which has led to increased levelized costs of energy. As a result, both participation in recent renewable energy auctions and final investment decisions have declined. However, we are seeing signs that project returns are rebalancing, and we expect to see activity levels pick up again,” said Kristian Røkke, CEO of Aker Horizons.

“Despite market headwinds, Aker Horizons made good progress in our projects during the quarter. Mainstream was awarded an area with the potential for a 1.8 GW offshore wind farm in Scotland. A significant milestone was reached in the Rjukan hydrogen project, which will serve as a blueprint project for further industrial development in our portfolio to drive down costs through standardization and digitalization,” Røkke added.

Aker Horizons’ NAV fell to NOK 16.5 billion in the third quarter, compared to NOK 17.4 billion in the second quarter, with the decline primarily due to the value decrease of Aker Carbon Capture. Gross asset value stood at NOK 22.6 billion at 30 September 2022, down from NOK 23.4 billion in the prior quarter.

Aker Horizons’ liquidity reserve, including cash and undrawn credit facilities, stood at NOK 9.7 billion as per 30 September 2022.

Portfolio Highlights

The transaction to combine Mainstream Renewable Power and Aker Offshore Wind to create a stronger renewable energy company with a 19 GW net global pipeline of projects under development, construction and operation, closed in August 2022. In parallel with the combination of the two companies, a number of Mainstream’s minority shareholders participated in a further issuance of shares, raising approximately EUR 6 million in new capital.

Mainstream and Actis signed an agreement to sell Lekela Power, Africa’s largest pure-play renewable energy independent power producer, to Infinity Group and Africa Finance Corporation. The transaction is expected to generate net proceeds to Mainstream of approximately USD 90 million, subject to certain closing adjustments, with the transaction valued at an enterprise value of approximately USD 1.5 billion.

In Rjukan in Norway, Aker Horizons signed a land lease agreement and entered a Power Purchase Agreement with the local municipality. Rjukan is a 40 MW hydrogen project, with 20 MW in the first phase, where Aker Horizons’ system architecture and standardized design will be implemented, de-risking other large-scale projects in the portfolio. The 234-gigawatt hours per year of renewable power secured through the PPA is attractively priced, below both current and forward prices. With power constituting two thirds of the levelized cost of hydrogen, securing cheap renewable power is an important step towards producing competitive green hydrogen. Aker Horizons’ asset development unit is working to mature the project toward a final investment decision in 2023, to facilitate hydrogen production from as early as 2025.

In Narvik, civil works were initiated at the Kvandal industrial site, a plot of 150 acres, preparing the ground for hydrogen-based industry. The location is well suited to utilize large volumes of clean energy, given its proximity to a major transformer station and Statnett’s main grid junctions in Northern Norway.

ENDS

Aker Horizons’ CEO Kristian Røkke, CFO Nanna Tollefsen, Asset Development CFO Kristoffer Dahlberg and Mainstream’s CEO Mary Quaney will present the main developments in the third quarter 2022 today at 08:30 CET followed by a Q&A session. The presentation, which is open to all, will be held in English and will be webcast on the following link.

Download PDF here.