CEO’s Review

Order backlog grew significantly

After the challenging first part of the year, we are pleased to announce that in July–September almost all our segments improved their EBITDA, and the Group’s operating profit improved from the comparison period and the second quarter of 2022. Our order backlog and the company’s cash situation improved as well.

Picture: Tomi Glad / Glad Media Plc

Enersense’s revenue in January–September grew to EUR 178 (173) million, which represents an increase of 2.8% year-on-year. Revenue increased in all segments except Smart Industry, where volumes have decreased following the completion of the Olkiluoto 3 project. Due to a weak first half of the year, EBITDA in the review period was below the previous year’s level. EBITDA decreased by 15.4% and was EUR 8.8 million (10.5).

In these exceptional times, we have every reason to be satisfied with our overall performance. We succeeded in the pricing and implementation of several projects. With the inflation rate rising rapidly, we also succeeded in negotiating increases to the prices of materials with many customers for existing and new contracts.

Despite the challenging operating environment, our order backlog has developed steadily during the year. In the third quarter, our order backlog grew significantly and stood at EUR 385 (272) million at the end of September. In our Smart Industry segment, we have worked hard during 2022, building a foundation for future growth. Examples of this work include the ramp-up of Enersense Offshore and an agreement on outfitting work for two new ferries at the Rauma shipyard for TT-Line Company. An extensive strategic cooperation agreement with the energy company Helen on operation and maintenance tasks related to plants and networks was recorded in the Smart Industry segment’s order backlog in the third quarter. The strategic goal of both Enersense and Helen is to play a key role in the green transition, and this agreement enables us to contribute to Helen’s vision of achieving carbon neutrality by 2030. It is also our pleasure to welcome the operation and maintenance professionals who are transferring from Helen to Enersense!

After the end of the review period, we announced that we had further specified the focus areas of our growth strategy by focusing on zero-emission transport alongside onshore and offshore wind power and solar energy. In this area, we are seeking new business in charging solutions for electric transport, for example. In the zero-emission transport sector, our goal is to expand our role in the value chain from being an installation and service partner for companies that provide charging equipment solutions to becoming a manufacturer of charging devices, which we believe holds significant growth potential for us. We also announced that we had signed an agreement to acquire Unified Chargers Oy, a Finnish growth company manufacturing fast charging stations and high-power charging stations for electric cars. When the corporate arrangement is implemented, Enersense will be able to offer a complete range of advanced and customisable charging solutions for public sites and the needs of heavy transport, as well as smart services for charging station operations.

We are also determined to pursue our goal of energy production of our own, which involves building 600 MW of capacity for onshore wind power and 100 MW for solar power by 2027. Our subsidiary Megatuuli Oy plays a key role in achieving our goal for onshore wind power. Its current onshore wind power project portfolio (3,000 MW) enables the development of our own energy production. Megatuuli has projects in the feasibility study phase (2,000 MW) and in the permit, land use and EIA phase (1,000 MW). We will begin to report on the development of this project portfolio as part of our half-yearly reporting for the first and second half of each year.

The core of our growth strategy consists of seeking new business in onshore and offshore wind power, solar energy and zero-emission transport. However, the cost-efficiency of our basic business operations and profitable growth are, at least, equally important for us. I am very pleased with how we have succeeded in developing our operations continuously and systematically towards best practices in all sectors. It is great to see how our new operating methods have already proved to be broadly successful, and our internal development work towards our common goals continues in cooperation with our highly competent personnel.

In September, we announced a business combination agreement through which MBÅ Invest, our second largest shareholder, will merge with Enersense. An extraordinary general meeting convened by Enersense’s Board of Directors will be held on 10 November 2022 to discuss decisions related to the merger of Enersense International Plc and MBÅ Invest Oy, among other matters. The purpose of the merger is to increase the transparency and equality of the ownership and governance, and simplify the ownership structure of Enersense. The transaction will bring MBÅ Invest’s holding better to the fore and make the executives’ true ownership in the company transparent. The transaction will also increase the management’s commitment through long-term transfer restrictions on shares. The elimination of indirect ownership is also aimed at improving the liquidity of Enersense shares.

Jussi Holopainen
CEO