Renewable energy company Galata Wind increases its sales by 17.7% in 1Q21

Galata Wind Enerji A.Ş. 1Q21 Financial Results

In the first quarter of 2021, the consolidated revenue of Galata Wind Enerji A.Ş., 30% of whose shares were offered to the public in April, climbed by 17.7% year-on-year (y-o-y) to TRY 88.2 million with the 8.1% generation boost contributed by the Taşpınar WPP, which was commissioned at full capacity in March 2021, as well as the US dollar-indexed sales as the FX rate followed an upward trajectory.

The Taşpınar WPP, which partially commenced its operations at the end of 2020 and sold its electricity at US$ 94/MWh (incl. domestic contribution) as part of the Renewable Energy Support Mechanism (YEKDEM), recorded a generation output of 1,526 MWh in January 2021, 1,453 MWh in February, and 12,619 MWh in March when all of its turbines became operational. The Taşpınar WPP is expected to have a more positive impact on revenue growth throughout the rest of the year.

The sales revenue generated from carbon emission certificate right, which are reported under the other revenues generated from the Company's main operations, rose by 235% y-o-y and hit TRY 2.313 million. (2020/03: TRY 689,000)

Galata Wind's consolidated gross profit increased by 5.9% y-o-y to TRY 57.667 million (2020/03: TRY 54.464 million). The report states that the most important reason why the gross profit rate fell short of the revenue growth rate was the depreciation expense calculated in 1Q21 for the Taşpınar WPP, which was partially commissioned in 4Q20. (Depreciation expense included in cost of sales 2021/03: TRY 14.483 million – 2020/03: TRY 8.631 million)

Consolidated Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA), calculated by factoring in the sales revenues of the carbon emission certificate right, recorded a 18.1% increase, reaching TRY 71.309 million (2020/03: TRY 60.371 million), and the EBITDA margin was realized as 80.8% (2020/03: 80.6%).
*EBITDA calculation formula= Gross profit-operating expenses + Total amortization and redemption+ carbon emission certificate right sales revenues.

Galata Wind raised TRY 114.388 million (2020/03: TRY 75.643 million) from operating activities in 1Q21, denoting a 51% increase y-o-y. Cash inflow from operating activities indicates that the Company boasts a strong cash generation potential.

Despite the increase in the net profit from operations, as a lower y-o-y performance in FX gains from commercial activities was coupled with the impact of the Taşpınar WPP investment and the interest and FX expenses of the loans utilized to finance the investment increased, the Company’s net profit in 1Q21 remained below the previous year’s first quarter close and was realized as TRY 7.797 million. (2020/03: TRY 22.452 million in profit).

The revenue and gross profit generated from operations, which are to be considered as key performance indicators of the Company, saw an increase. Furthermore, the y-o-y improvement in EBITDA margin and the significant y-o-y rise in the cash the Company generated from its operating activities point to an overall positive 1Q21 As the Taşpınar WPP's turbines were fully commissioned in March, the financial statements in the following period are expected to reflect the positive effect of full capacity power generation.

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