Modus Group's revenue in the first half of the year reached EUR 203 million
The Modus Group, an international group of companies operating in renewable energy, mobility services, the auto business, and investment funds, had consolidated sales revenue of EUR 203 million in the first half of 2023, almost at the same level as in the same period in 2022 (EUR 203.8 million). The Group's unaudited earnings before interest, taxes, depreciation, and amortization (EBITDA) decreased by 9% compared to 2022, from €22 million to €20.1 million.
"Global economic challenges - inflation, rising interest rates, uncertainty - signaled a challenging period ahead last year. While our results in the first half of the year remained almost the same as a year ago, Modus Group, like many organizations, faces challenges in its day-to-day operations, ranging from increased costs to a slight slowdown in demand for high-value purchases. However, we do not doubt that the Group's broad business diversification and timely strategic decisions will ensure stability," says Ainė Martinkėnaitė-Martyniuk, Chairman of the Board of Modus Group.
Modus Group's results for the first half of the year were also affected by the steady exit from Belarus, which has already generated a loss of more than EUR 1 million this year, compared to the EUR 8.3 million total operating loss the Group incurred in the neighboring market last year. Part of this was due to the write-down of assets of the Group's energy companies.
Green Genius projects are gaining momentum in a growing part of Europe
The Group's renewable energy business, Green Genius, posted an 18% decrease in revenue in the first half of the year compared to the same period last year, amounting to EUR 10.8 million. EBITDA, however, grew by 96% to EUR 5.1 million. The successful development of solar projects and financing deals in Lithuania and Poland drove this.
Green Genius continued to be active this year both in Lithuania and abroad. Locally, the company won a €2.6 million grant for an innovative battery project, which it has already started implementing with Švyturys-Utenos alus. It has also acquired a 121 MW solar park project in Latvia. Wind power development is also continuing, with the signing of a wind turbine supply contract with Nordex and construction work on an 80 MW wind farm near Jurbarkas.
According to Ms Martinkėnaitė-Martyniuk, investments in Southern European countries, which started a few years ago, have also gained momentum, with the signing of an investment agreement for the further development of the portfolio in Italy this year. "The agreement with France's Eiffel Transition Infrastructure Fund will allow us to develop and build a 500 MW solar portfolio in Italy. This is one of the first equity and debt deals of its kind in Europe. It aims to support the development of renewable energy in Europe," adds the Chairman of the Board of Modus Group.
The search for alternatives has driven demand for mobility services
Mobility businesses' revenues grew 12% year-on-year in the first half of 2022 to EUR 58 million, but EBITDA almost halved to EUR 4.5 million. The revenue growth was mainly driven by the increase in the fleet of MyBee, a car subscription service, and the launch of the service in Latvia, thus ensuring its availability across the Baltic region.
"With inflation and everyday costs rising, as people look for ways to save money and postpone bigger purchases for the future, alternative services to owning a car, such as car sharing and car subscriptions, are becoming more and more popular. On the other hand, rising costs are also a significant challenge for businesses, so focusing on efficiency will be a key priority in the second half of the year," says the Chairman of the Board of Modus Group.
Demand for luxury brands keeps car sales stable
Modus Group's automotive sales revenue was down 5% year-on-year at EUR 131 million. EBITDA decreased by 3% and amounted to EUR 10.6 million. The slowing economy mainly impacted the results, high price volatility in the economy car segment and slowing consumption due to high inflation and rising interest rates.
According to the Chairman of the Board of the Modus Group, the current economic situation is causing customers to take a little longer to decide whether to buy a car. "While the supply chain disruptions that have plagued the automotive market over the past few years have been resolved, they have been replaced by instability in the market due to the current economic challenges. Customers are hesitant because of high-interest rates and the uncertainty of market prices, and are taking much longer to think," says Ms Martinkėnaitė-Martyniuk.
These trends are illustrated by the sales of economy cars, which accounted for only a small part (around 6%) of the EBITDA result. The strong demand for luxury cars and the growing popularity of the CUPRA brand and sales in Latvia were the main contributors to maintaining stable financial results.
Modus Asset Management enters Latvia
Modus Asset Management, the Group's investment fund management company, continued to expand its solar portfolios in the Baltic States and Poland in the first half of the year. The newly launched Clean Energy Infrastructure Fund, a renewable energy fund that qualifies for the Dark Green sustainability category, has completed its first round of distribution and attracted €85 million in investor commitments. The investment fund managed by the company also entered the Latvian renewable energy sector by acquiring a 55 MW portfolio of solar power plants. According to Ainė Martinkėnaitė-Martyniuk, Chairman of Modus Group, this is part of Modus Group's successful strategy of investing in the Baltic and Polish markets.