A great 2008 for Eolia

Eolia Renovables, the renewable energy company founded by my friend Miguel Salis and in which I’m an early investor, has reported great results for 2008, despite the recession. The Eolia was started out of the offices of Jazzya, my holding company as Miguel Salis transitioned from being the Managing Director of Jazzya to the CEO of this extremely successful start up. Surprisingly Eolia was not started as a company itself but due to Miguel´s roots as a banker it was started as the first investment fund in Spain in renewable energies with financing from the investment bank Nmás1, Bankinter, BBK and Fonditel. In October last year Eolia completed the roll up of over 22 independent wind and solar development companies into a new company, which has resulted in the creation of the largest Spanish independent wind and solar electricity generation company, Eolia Renovables de Inversiones.

According to a recent Clean Energy Trends report, global revenues from the solar photovoltaics, wind power and biofuels sectors increased 53% in 2008, to $115.9 billion from $75.8 billion in 2007, with one sector alone, wind, exceeding $50 billion revenues.

Eolia’s revenue growth for 2008 outpaced the industry, reporting sales for almost 70 million euros, a 134% increase over the previous year. The consolidated EBITDA for 2008 reached 52 million euros, a 96% increase compared to 2007. If we included revenues from three companies acquired by Eolia in 2008 (Renergys, Deca and Asetym), sales for the past year would amount to 81 million euros, with a 62 million euros EBITDA. Eolia recently acquired 100% of Renergys, a paneuropean group dedicated to the construction and operation of wind farms in Germany, France, Poland and Portugal, and Asetym, a company I used to own that operates 35 solar plants in Murcia, Spain. In 2008 Eolia also acquired 45% of Deca, a company operating a 20 megawatts (MW) wind farm in Spain.

Wind energy amounts to 64% of Eolia’s total sales, while solar energy revenues add up to the remainder 36%, with the latter growing substantially from 2007, when solar energy sales were 29% of total revenues.

Wind capacity installed in Spain in 2008

Capex for 2008 grew to 659 million euros, on account of a 160% increase in installed capacity from 167 MW to 434 MW, an investment that gave Eolia the 4th ranking in Spain for new wind capacity installed during 2008. Last year the company started 5 wind farms in Spain, adding 141 MW to its total capacity, and 4 solar plants with a 35.8 MW capacity. As mentioned, the company also acquired two wind farms for 89 MW additional capacity and a 3.5 MW solar plant.

Eolia will keep growing in 2009, thanks to seven new wind farms being built in Spain, France and Poland, for an additional 171 MW. The company expects its total capacity to reach 553 MW by the end of the first quarter, three times the total capacity at the end of 2007.

The financial crisis is of course affecting the alternative energy industry, making it harder for companies to finance their projects. The horrible conditions of the stock markets render IPOs impossible and fewer IPOs in turn make it harder for venture capital firms to exit their investments and finance new companies. Last year Eolia was expected to go public on the Madrid stock market at a valuation between 800 and 900 million euros, but due to the market conditions the company had to postpone its listing plans.

Nonetheless, according to the Global Wind Energy Council (GWEC), strong policy support for wind power will continue to drive growth in China, Europe and the United States, bringing global wind power capacity to nearly triple in the next five years, although growing slower then in the past.

While 2009 will definitely be a tough year, the future looks bright for Eolia and alternative energy, despite the current economic conditions.

Disclosure: I am a shareholder in Eolia.