KN Energies (KNE1L) Q2 2024 earnings summary

Executive summary

• Six-month revenues reached €43 million, nearly flat year-over-year, with commercial activities contributing nearly €20 million and growing by 13% year-over-year.

• EBITDA increased by 30% to €21.7 million, with commercial activities' share of EBITDA rising from 40% to 43% year-over-year.

• Adjusted net profit (excluding forex impact) was €6.3 million, up nearly €2 million year-over-year.

• Secured new contracts for commercial and technical operation of four German LNG terminals, expanding international presence alongside Brazil.

• Advanced CCS Baltic Consortium project, granted PCI status by the European Commission; rebranded to KN Energies and marked 10th anniversary of Klaipėda LNG terminal.

Financial highlights

• Commercial LNG segment revenue grew by 57.8% due to new projects in Germany and Brazil.

• Liquid energy terminals revenue rose 2.9% despite a 2.9% drop in transshipment volumes; bitumen transshipment up 17%, biofuels up ~4%.

• EBITDA margin reached 51%; adjusted net profit margin 14.9%.

• Regulated business accounted for 57% of revenues, remaining stable year-over-year, but saw an 8.7% revenue decline due to FSRU dry-dock.

• Total group expenses decreased by 12.2% year-over-year, mainly from lower emission allowances and energy costs.

Outlook and guidance

• Management aims to increase commercial activities' share of EBITDA to 50% and beyond in the long term.

• Strategic focus on energy transformation, targeting climate neutrality by 2050 and 30% emission reduction by 2030.

• Investment focus on expanding reloading capacities for light oil products, developing carbon capture, hydrogen, and biofuel projects.

• NERC published a WACC of 6.54% for 2025, up from 5.06% in 2024, impacting regulated activities' returns.

• No annual LNG capacity allocation expected from 2025; focus on spot and secondary market allocations.