Eolus Vind
Eolus Vind - Beat on revenue recognition, miss on EBIT (ABG Sundal Collier)
2021-02-26 13:49
Q5 EBITDA of SEK 62m (-9% vs. ABGSCe at SEK 68m)
Lower est. by 36% for ‘21e; delays impacting margins
LT portfolio intact; fair value range of SEK 190-250
Higher than expected revenue recognitionEolus delivered Q5’19/20 (Q5 as changing from split to full financial years) sales above our expectation, with group sales of SEK 1,078m (vs. ABGSCe at SEK 737m). The deviation on sales was mainly from higher than expected revenue recognition from Öyfjellet and Wind Wall. Öyfjellet’s revenue recognition was 17% (vs ABGSCe at 14%) and Wind Wall’s was 57% (vs ABGSCe at 24%), lifting project development sales to SEK 1,067m (ABGSCe SEK 728m). However, earnings were hurt by project delays, which forced higher project costs. Group EBITDA was SEK 62m (-9% vs. ABGSCe at SEK 68m) and net profit was SEK 30m (vs. ABGSCe SEK 52m). No new projects were launched in the quarter, and in the four-month period, 0 (43) wind turbines were put into operation, but 39 (29) wind turbines with an installed capacity of ~161 MW (~105) were transferred to customers. Finally, the board proposed a dividend of SEK 2.0 per share (1.5) for the 2019/2020 period, corresponding to a 25% pay-out ratio.
Lower EBIT 36-29% ‘21e-‘22e, margin affected by delays
Again, the quarter was characterised by higher than expected revenue recognition. As a result, we lower our EBIT estimates for ‘21 by 36% and by 29% for ‘22e, and as seen with ongoing projects, we expect the projects completed in ‘21e will deliver slightly lower margins due to increased costs from project delays.
Portfolio intact, fair value range of SEK 190-250 (200-260)
As of Q5’19/20, Eolus’s project portfolio amounted to 7,830 (5,515) MW. Eolus continues to add projects to its portfolio, making us more confident in our view that it has a solid foundation for long-term sales and earnings growth. We acknowledge the market’s appetite for renewable energy, the healthier geographical exposure and Eolus’s project potential. However, the slightly lower than e
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