Nordex: Delivering Strong Returns
The quarterly figures from the Hamburg-based wind turbine manufacturer Nordex are a prime example of successful turnaround management. In the second quarter, Nordex more than doubled its EBITDA to EUR 224 million, while the margin jumped to 10.3%. That represents an increase of 450 basis points. Net profit soared to EUR 111.5 million. This is not a one-off effect, but a structural improvement in operational processes. The gross margin rose to 26.9%, whilst operating cash flow amounted to around EUR 240 million. The company has succeeded in delivering its projects more profitably whilst keeping costs under control.
The EUR 18.4 billion order book gives Nordex planning certainty for the coming years. In the second quarter alone, orders totalling 3.1 gigawatts (GW) were received, an increase of 32%. The return to the US market is also gaining momentum. With around 800 megawatts (MW) of new orders in the first six months, Nordex has already secured more business in the US than in the whole of last year. Production in Iowa is set to double. At the same time, the company secured major contracts in Turkey and Germany, including the 525-MW YEKA-5 project from its long-standing client, Türkerler Holding.
The EUR 2.475 billion guarantee facility signed in July is more than just a refinancing. It provides Nordex with financial flexibility on significantly improved terms and runs for 5 years instead of 3. This is a vote of confidence from the banks and strengthens the company’s position in the competition for major projects. The balance sheet is solid, with EUR 1.96 billion in cash and cash equivalents, net liquidity of EUR 1.67 billion and an equity ratio of 20.6%. Management has confirmed the outlook for 2026. Revenue growth of 9–11% is expected, with a margin of between 8–11%. The path to the medium-term margin targets appears clear.
RE Royalties: Setting the Course for Growth
On August 5, RE Royalties announced an increase in its investment in Solaris Energy by USD 1 million, bringing the total to USD 4.8 million. At first glance, this may not sound particularly exciting, but the key development is the memorandum of understanding signed at the same time, with a volume of up to USD 67.5 million. In addition to the USD 4.8 million already disbursed, a further USD 13.7 million is earmarked for 13 solar projects with a capacity of 48 MW that have already been commissioned, plus USD 49 million for 83 projects in the development stage totalling 142 MW. Although the letter of intent is not yet binding and is subject to due diligence, it clearly demonstrates the potential for scale within this partnership. If the due diligence is successfully completed, this could take RE Royalties to a whole new level.
Against this backdrop, the review of strategic alternatives initiated in March is taking shape. With PricewaterhouseCoopers Corporate Finance on board, management is evaluating how best to finance the pipeline comprising around CAD 20 million in firm letters of intent and a further CAD 200 million under review. The mismatch between short-term bonds and long-term royalty income is the key piece of the puzzle that needs to be resolved. The potential solutions range from a sale of the company, through co-investment partnerships, to capital structure optimizations via equity or debt financing. The focus remains on long-term value creation for shareholders.
The North American market for clean energy financing, valued at USD 120 billion, offers ample scope for growth. With its focus on medium-sized developers, RE Royalties has carved out a niche that is often neglected by banks. Operational speed is a decisive competitive advantage here. The Jackson Centre solar projects in Pennsylvania and the financing of solar installations in the Maldives demonstrate that the model works, from local community projects right through to international ventures. With 135 projects in its portfolio and an unleveraged internal rate of return exceeding 19% since its inception, the company remains an attractive prospect for investors seeking to participate in the growth of renewable energy.
E.ON: Solid Figures, but Regulatory Clouds on the Horizon
E.ON delivered a stable operational performance in the first half of 2026. Adjusted consolidated EBITDA rose by 1% to EUR 5.4 billion, whilst adjusted consolidated net profit increased by as much as 5% to EUR 1.9 billion. This means the group has already achieved 57% of its full-year EBITDA forecast and 69% of its net profit forecast. Nevertheless, management is sticking to its original forecast. This is raising questions among investors. The network division remains the undisputed earnings driver, with EBITDA exceeding EUR 3.8 billion, whilst the retail business performed more weakly, as expected.
The strategic direction is clear. Between 2026 and 2030, E.ON plans to invest EUR 48 billion, with the lion’s share of EUR 40 billion earmarked for distribution networks. In the first half of the year, EUR 3 billion was already invested in infrastructure, representing a slight year-on-year decline due to weather conditions. At the same time, the group is pressing ahead with the acquisition of the British supplier OVO Energy, which would increase its UK customer base from 5.6 to 9.6 million. The deal is still under review by the competition authority but is expected to be finalized in the second half of the year.
The key question for investors remains future regulation. The Federal Network Agency has set its proposed WACC for gas at 3.76%. This is significantly lower than previously assumed. Should this benchmark be applied to the electricity grids, returns on the regulated asset base, worth billions, would be noticeably lower. The final decision on gas is due in 2026, while the final decision on electricity will not be made until 2027. Until then, uncertainty remains, despite solid financial results and a promising investment pipeline.
The global energy transition is gathering pace and the investment opportunities are diverse. Nordex is impressing with an operational turnaround and strong margins, which finally lend credibility to the turnaround. RE Royalties, as a niche player with its scalable financing model, offers an exciting and promising entry into the royalty income market. E.ON is delivering solid figures but is struggling with regulatory uncertainties that are casting a shadow over its multi-billion-dollar grid expansion.
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