Release Date: February 13, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Elmera Group ASA (FRA:1ZK, Financial) successfully mitigated the volume decrease due to mild weather through effective product management efforts.
- The company increased core margins in both the consumer and business segments, contributing to financial robustness.
- Net revenue increased year over year in all segments, and the company delivered on all financial targets for 2024.
- The proposed dividend of NOK3.00 per share represents an attractive payout to shareholders, supported by a gain from the sale of a 40% ownership in Metzum.
- The Business segment achieved a milestone of nearly 130,000 deliveries, showcasing a robust product range and strong track record.
Negative Points
- Mild weather led to a 9% reduction in volume sold year over year, impacting net revenue by NOK10 million to NOK15 million in the Consumer and Business segments.
- Increased competition during the seasonal trend from Black Week through Christmas temporarily impacted customer acquisition in the Consumer segment.
- Operating expenses increased in the fourth quarter, with OpEx temporarily hiked in the Nordic segment due to increased loss provisions and amortization.
- The company lost approximately 10,000 customers in the Consumer segment in 2024, partly due to changes in product offerings and increased competition.
- The Nordic segment experienced a 31% year-on-year volume reduction due to the phase-out of legacy fixed price products and mild weather.
Q & A Highlights
Q: The governing party, the Arbeiderpartiet or the Labor Party, has suggested a fixed mark on electricity if they win the election. How do you reflect on this?
A: Rolf Barmen, President, Chief Executive Officer: A fixed market has been suggested by left-wing parties a couple of times during the past years. From a macroeconomic perspective, this is considered to be a really bad proposal, but more importantly, it violates the European Economic Area legislation, which is already implemented in Norway.
Q: Can you elaborate on how you interact with politicians and the regulator to influence processes that are of urgent interest to your operations?
A: Rolf Barmen, President, Chief Executive Officer: We work closely with both the regulator and political parties to ensure that political intentions can be carried out in real life. Our engagement secures that we are invited into processes before final decisions are made. We are currently in close contact with the regulator regarding the Labor Party's proposal.
Q: In 2024, it seems that the Elmera Group lost around 10,000 customers in the Consumer segment. Is this what we can expect going forward?
A: Rolf Barmen, President, Chief Executive Officer: No, our target is customer growth in the Consumer segment. Half of the loss was due to changes in product offerings to solar customers, and the other half from price centers in Gudbrandsdal Energi. We aim for growth in 2025.
Q: Are you in talks with the government about the role of electricity retailers?
A: Rolf Barmen, President, Chief Executive Officer: Yes, and they have clearly stated that our role will not change. Every consumer will need a product from a retailer, and grid companies will administer the arrangement as they do with the existing support scheme.
Q: Will you be able to be competitive if there is a maximum cap on the retail margin?
A: Rolf Barmen, President, Chief Executive Officer: We will remain competitive by leveraging scale advantages. However, a maximum cap would violate the European Economic Area legislation, so we do not see it as a realistic path for the governing party.
Q: Can you comment on the cost development in the Nordic segment?
A: Henning Nordgulen, Chief Financial Officer, Executive Vice President: The increase in OpEx in 2024 is due to moving away from external telemarketing teams to internal sales teams for better control over quality and compliance. This is a planned development, and we are committed to maintaining nominal cost levels in 2025 while finding efficiencies.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
