Scatec Q2 2025 slides: 51% revenue growth driven by Philippines, record project backlog

Scatec (OB:SCATC) reported robust Q2 2025 results, with proportionate revenues surging 51% to NOK 2,302 million and EBITDA up 19% to NOK 1,130 million, driven by strong performance in the Philippines due to a higher Ancillary Services rate and significant new capacity awards in South Africa. The renewable energy developer also highlighted record construction activity with 1,979 MW under development and a substantial 5.2 GW project pipeline, alongside a 26% reduction in gross corporate debt since Q3 2024, positioning the company for continued growth and financial stability in the expanding global renewables market.

Analysis

Scatec (OB:SCATC) reported a strong Q2 2025 performance, underpinned by significant top-line growth and strategic expansion in key emerging markets. Proportionate revenues surged 51% year-over-year to NOK 2,302 million, while proportionate EBITDA grew 19% to NOK 1,130 million. This revenue acceleration was notably driven by high-margin construction activity and a substantial retroactive revenue recognition in the Philippines, where a higher Ancillary Services rate approval contributed NOK 231 million, rather than a material increase in power output. Strategically, the company solidified its position in South Africa by securing its largest-ever solar award of 846 MW, expanding its under-construction and backlog capacity in the region to 1.4 GW of solar and 226 MW of battery storage. This expansion is supported by a record 1,979 MW of projects currently under construction and a total growth pipeline of 5.2 GW. Critically, this aggressive growth is being managed alongside disciplined financial management, evidenced by a 26% reduction in gross corporate debt since Q3 2024 and a strong liquidity position of NOK 4.4 billion. The positive outlook is further reinforced by confident full-year 2025 guidance, projecting proportionate EBITDA between NOK 4,150-4,450 million.

Key Decisions for Investors

• The combination of 51% revenue growth, a robust 5.2 GW project pipeline, and a 26% reduction in corporate debt presents a compelling bull case, reinforcing the positive market sentiment and strong FY2025 guidance.
• Investors should closely monitor execution on the record 1,979 MW under construction, as project delays or margin compression below the guided 10-12% could temper the optimistic outlook, particularly given the significant exposure to the South African market.
• It is crucial to assess the sustainability of earnings growth beyond the one-off retroactive revenue of NOK 231 million from the Philippines, focusing on the conversion of the project pipeline into stable, long-term power production revenues.