No estimate revisions

Expect sales of SEK 191m and EBIT of 20m

Report due 8 July

Q3 expectations
We expect Q3’19/20 to be the smallest quarter during the FY’19/20, with sales of SEK 191m and EBIT of SEK 20m on a margin of 10.1%. We expect 10% revenue recognition for both Bäckhammar and Stigafjellet as well as 15% for Wind Wall. The company highlighted minor delays (around one month) for the projects in its Q2 report and does not currently expect any further delays. We estimate net income of SEK 15m resulting in EPS of SEK 0.61 for the period.

Forecast changes & outlook
We do not make any changes to our current estimates; we expect FY’19/20e sales of SEK 1,337 and EBIT of SEK 232m with an EPS of SEK 8.75. We estimate the bulk of the profit coming from the handover of Bäckhammar in Q4’19/20. Looking into FY’20/21, the most important project by far is Öyfjellet; the 400 MW project is the largest project to date with expected revenue of EUR 441m, and we expect an EBIT of SEK 422m. In recent months, the project has experienced some local headwinds in Norway from the national wind power opposition as well as individuals concerned with the power plant’s impact on local reindeer herds. The project was approved in ‘16 and final details (MTA-plan) were approved in Dec. ‘19 by expert authority NVE. The MTA-plan was appealed in May 2020, but NVE did not change its decision. The final say lies with the OED (Oil and Energy Department), which tends to value the opinion of NVE. At this point, we anticipate that the project will be able to progress as planned, but we follow developments closely.

Trading in the middle of our fair value range
Eolus has a total project potential of ~6,000MW, of which ~2,000MW is set to be delivered between ’20 and ’24. The share is trading in the middle of our SEK 100-150 fair value range. For valuation details, see our in-depth report published 3 April 2020.

info@introduce.se (Introduce.se)

ABG Sundal Collier - Introduce.se