Q2’21 report due on Tuesday, 31 August

Est. revisions from fine-tuned project assumptions

Fair value range of SEK 200-260 remains

Q2’21 expectations
Eolus Vind should deliver a strong Q2 with sales of SEK 634m, supported by further development of project Öyfjellet and the handover of project Wind Wall. We assume 10% revenue recognition from project Öyfjellet and the 25% left from project Wind Wall, which should result in project development sales of SEK 628m and generate a segment EBIT margin of 7.1%. After the handover of project Wind Wall in Q2, which was converted to Eolus Vind’s asset management services, Eolus now has 921 MW under management and we estimate asset management sales of SEK 9m, for a segment EBIT margin of c. 23%. We expect group EBIT of SEK 47m, for a margin of 7.4%. Aligned with the sector, Eolus Vind’s upcoming projects might be affected by supply constraints regarding raw materials and key components, which should increase project development costs. However, Eolus Vind will increase its project prices in order to limit the margin impact from increased input costs.

‘21e EBIT up by 1%; slightly higher Wind Wall earnings
We leave our estimates relatively unchanged at this stage. We raise our ‘21e EBIT estimate by roughly 1%, as we factor in slightly higher earnings from project Wind Wall, but keep ’22e-‘23e unchanged. We expect management to provide more information regarding the wind farm acquisitions made at the end of Q2’21. Finally, we maintain our expectations of the final handover of project Öyfjellet in Q4’21.

Fair value range of SEK 200-260 reiterated
We believe that Eolus Vind has a strong pipeline of projects to execute on, which should drive earnings in the upcoming years. We note that the stock is down 7% in the last three months and is currently trading at 14.8x ’21e EV/EBIT. We keep our fair value range of SEK 200-260 per share.

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