Jenåsen way more profitable than our expectations

Favourable years give potential for great cash pile-up

Ready to seize new opportunities – beyond wind power

Huge projects closed, all according to plan
Eolus has closed the deals Bäckhammar and Stigafjellet with planned completion in August ‘20 and H2’20, respectively. The latter was once again a project with order value in excess of Eolus’ Mcap. The announcement was welcomed by the stock market. However, it should not come as a surprise, as all was according to Eolus plans and included in our forecast. Looking at our estimates post Q4’17/18, no projects are added but the cost base is positively fine-tuned and revenues from electricity certificates added on the back of data points from the Q4 report. We estimate SEK 197-255m in EBIT for ‘19/20e –‘20/21e.

Well backed up – ’21e figures topped with triggers
Jenåsen, delivered in Q4, indicated a significantly higher project margin than expected. We are cautious about applying the same profitability profile to coming projects due to a range of favourable conditions related to Jenåsen, though this means that the risk in estimates should be on the upside. Our forecast is supported by announced orders and the big project Öyfjellet, which we are very confident will be established. Net cash is estimated at SEK 640m in 20/21e, corresponding to 53% of Mcap.

Near-term business 62% of the valuation and sun is shining
We estimate that the market is assigning a value of SEK 460m to Eolus’ future business. Near-term business (’18-‘21e) constitutes 62% of today’s market value (>70% 6m ago). What has changed in the last 6m is 1) a number of settled deals, 2) higher electricity prices, and 3) increased awareness of an expanded offering into solar power and energy storage. Since Eolus has solid experience of developing wind parks which are more complex than solar power facilities (but with many common denominators), we believe that the set-up is in place for Eolus to become an attractive d