Eolus Vind
Eolus Vind - Heavy metal fans - no cooling of demand (ABG Sundal Collier)
2019-01-23 17:34
We expect EBITDA of SEK -10m…
…With operational activity flying under the P/L radar
Near-term business still exceeding 70% of MCap
Low activity despite high proactivityWe expect low activity in the first quarter due to no projects being delivered (we expect delivery of Anneberg in Q2). We expect both asset management and electricity production to contribute SEK 4.4m and SEK 3.1m to sales and SEK 0.5m and SEK 0.4m to EBIT, respectively. We also raise our estimate for electricity production given the high electricity prices recently, with SE4 and SE3 up 50% and 45% y-o-y in Q1 respectively. We expect Q1 net sales of SEK 19m (18m), EBITDA of SEK -10m (5m) and EBIT of -14m (3m).
The rich get richer and the big get bigger…
In October, Norwegian Water Resources and Energy Directorate granted Eolus permission to increase its concession for Öyfjellet from 330 MW to 400 MW. The increase was justified by new turbines being more effective, making it possible to increase capacity without increasing the number of windmills. This caused us to raise sales and EBITDA estimates for ’20/21e by SEK 502m and SEK 54m, respectively – increasing its already cash rich position. Also, we have raised ‘19/20 estimates, primarily due to updated FX and adjusted project margins.
Near-term business makes up 70% of MCap
We estimate the EBITDA for Eolus’ current near-term (3y) project pipeline is 70% of Eolus market cap, in addition to cash equivalents of SEK 455m and interest bearing debt of SEK 169m – resulting in net cash of SEK 286m. According to The Industry Association for Wind Power in Sweden, Sweden will increase its total wind power production from 17 TWh to 70 TWh (investments of >SEK 200bn) by 2040. This implies a CAGR of 7%. We view Eolus as well positioned in the landscape of wind power projectors. Given its track record and recurring international customers, we find no reason to believe Eolus will grow any slower than the market. Eolus’s Q1 report is on 24 January.
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