The interim financial report for Q1 2024 shows a satisfying result for ZITON, with an EBITDA of EUR 9.5m, which was EUR 0.9m above Q1 2023.
Highlights of Q1 2024
- J/U WIND ENERGY initiated the time charter with Siemens Gamesa at the end of February 2024.
- EBITDA amounted to EUR 9.5m in Q1 2024 compared to EUR 8.7m in Q1 2023. The improvement was due to an increase in revenue reflecting that J/U WIND ENERGY went on time charter with Siemens Gamesa at the end of February 2024, as well as improved contribution from the three smaller vessels due to a stronger market for major component replacements, which was partly offset by one-off income of EUR 0.8m in Q1 2023 for J/U WIND ENTERPRISE.
KPI guidance for 2024
Our KPI guidance for 2024 is unchanged, with the exception of CAPEX, at:
- Weighted average utilisation rate. We expect a utilisation rate in the range of 85-95%.
- EBITDA. We expect EBITDA to be in the range of EUR 52-56m.
- Cash flow from operating activities. We expect cash flows from operating activities to be in the range of EUR 4751m. This takes reversal of trade payables related to the upgrade of J/U WIND ENERGY amounting to EUR 6.5m at the end of 2023 into account.
- CAPEX. We expect CAPEX of around EUR 7m excluding CAPEX related to J/U WIND ENERGY. In addition, we ZITON A/S – 31 May 2024 expect CAPEX for J/U WIND ENERGY of approximately EUR 26m (up from EUR 22m due to additional CAPEX required) including CAPEX for leg extension and capitalised interest costs of approximately EUR 2m related to the vessel.
Outlook for 2024 and beyond
The outlook for 2024, is based on the following key assumptions:
- The long-term charter agreement with Siemens Gamesa for J/U WIND ENERGY. The vessel has been upgraded and initiated the time charter at the end of February 2024. The vessel is expected to operate successfully with limited off-hire days. However, in late 2024 the vessel will undergo a leg extension, during which the day rate on the time charter will be reduced.
- The long-term charter agreement with Siemens Gamesa for J/U WIND ENTERPRISE. The vessel is expected to continue to operate successfully with limited off-hire days.
- The three smaller vessels, servicing the market below 6 MW, will carry out regular major component replacements on framework agreements and other tenders attained.
- Beyond 2024, the effect of having J/U WIND ENERGY on time charter with Siemens Gamesa for the full year will positively effect EBITDA. Further, when the time charter for J/U WIND ENTERPRISE was extended it was mutually agreed with Siemens Gamesa that the day rate will increase materially from mid-2025. In summary, the contracted terms of the two long-term time charter contracts with Siemens Gamesa are, almost entirely, expected to enhance running twelve months EBITDA to around EUR 75m from mid-2025.
ZITON to explore strategic alternatives
The Board of Directors of ZITON has engaged Nomura Greentech to act as financial advisor in reviewing strategic alternatives focused on maximising shareholder value. These alternatives include, among other things, a corporate sale, a business combination or a partnership, while continuing to develop other growth opportunities. There can be no assurance that this strategic review will result in any transaction. ZITON has not set a timetable for completion of the process, and it does not intend to comment further unless a specific transaction is approved by ZITON’s Board of Directors and its shareholders, or it is otherwise determined that further disclosure is appropriate or required by law.
Read the full interim financial report for Q1 2024 here.
