Divestment price relatively in line with our estimate

Est. changes primarily on the back of time adjustments

SOTP fair value SEK 22-48 per share

Lower divestment price than expected, but can be exceeded
On 11 December, Arise divested its 231 MW wind farm project Skaftåsen to Foresight Group for a fixed fee of EUR 19.1m, a variable fee of EUR 6.4m, plus an earn-out of EUR 4.5m (possibly taking place in some 3-4 years) which we believe is likely to happen. Overall, Arise expects the project to generate SEK 210m in gross profit (excl. earn-out), which compares with our estimate of SEK 231m. Despite the gross profit being slightly lower than we anticipated, we still believe the divestment is very positive from several perspectives. The final divestment price could exceed our previous estimate by some SEK 26m if the earn-out takes place.

Large y-o-y est. changes but close to zero ’19e-’21e net effect
We make estimate changes on the back of the slightly lower divestment price, and also because of when we expect revenue recognition and cash flows to occur – both from Skaftåsen and the current projects Bröcklinge & Enviksberget. Arise will receive a payment equivalent to the fixed fee (EUR 19.1m) in Q4’19. We also wish to highlight that Arise is expecting a gross profit of SEK 210m, but we expect it to recognize some additional SEK 30m in cash flow due to Skaftåsen development costs already being accounted for. Overall, we lower EBIT by SEK -10m for ’19e-’21e.

We anticipate several possible positive events
With demand for Swedish wind farms still high, we believe that Arise is well placed, with its ongoing construction and already-announced permitting processes for future projects. Furthermore, we see several future developments for Arise, such as potential lifetime extensions on own wind farms, additional projects maturing and being sold, and more information regarding the value in the asset management division being disclosed. We also expect Arise to refinanc
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