Bäckhammar & Stigafjellet provided SEK 78m in EBIT

Slight delay for Wind Wall, delivery year-end ‘20

Long-term outlook intact, value range SEK 117-173

Solid project profitability while FX burdened EPS
The Q4 report was largely in line with our expectations. Sales were SEK 457m vs. our estimate of SEK 450m and EBIT was SEK 78m, -11% vs. our SEK 87m. The EBIT margin was 16.8% (ABGSCe 19.3%). Project development had sales of SEK 451m and EBIT of SEK 74m, with the earnings coming from the completion and delivery of Bäckhammar and Stigafjellet. Asset management contributed SEK 3m to EBIT and Eolus now has 903 MW under management. However, EPS was well below our expectations at SEK 1.32 (ABGSC at 3.08) due to unexpected negative FX effects on net financials, resulting from an unfavourable USD/SEK, which cost SEK 35m net.

Slight delays, but long-term estimates largely unchanged
The outlook remains largely unchanged, except for a few months delay of project Wind Wall, which is now expected to be delivered around year-end ’20. However, this does not impact net estimates. The project was sold to Cubico Sustainable investments in October, and the sale is a milestone and marks Eolus’ first project sold in the US. Öyfjellet is developing according to plan and is expected to be delivered in the fall of ’21. We expect to see some profits realized in the coming quarters as development continues. We note that the board decided to change its reporting period from a split financial year to the calendar year, which means the addition of a fifth quarter for this year (see page 6). Our model will be updated as we get more information from the company.

Valuation in the middle of our SEK 117–173 fair value range
Eolus’s current project portfolio amounts to 6,245 MW with 1,750 MW with expected delivery between 2021 and 2024. Additionally, the recently announced partnership with SCA could add another 1,000 MW. We believe this provides a solid platform for Eolus to deliver sharehol
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