Arise - Own producion showed improved profitability
Q1 EBITDA of SEK 23m (ABGSCe at SEK 20m) Own production slightly better than expected Trading at 9. 5x ‘21e EV/EBITDA, down to 2. 3x in ‘22e Q1’21 results Sales of SEK 47m (21% vs. ABGSCe at SEK 39m), down 6% y-o-y.
EBITDA of SEK 23m (11% vs. ABGSCe at SEK 20m), for a margin of 47. 9% (vs.
ABGSCe at 52%) and down from 51% in Q1’20. The wholly owned production achieved good profitability during the quarter with an average income from production of SEK 463 per MWh (314) and better than what we expected (ABGSCe at SEK 415 per MWh) as the electricity market has returned to more normal conditions. Comments and outlook Report came in mainly as we expected, with low expectations of Development and Management profits during this quarter and no larger share of revenue recognition.
Despite the already announced entry into Poland and UK, Arise is making good progress for Ranasjö and Salsjöhöjden (240 MW) and hope to complete sale of the projects before end of Q2. No major to slightly positive share price reaction likely today. Final thoughts and conf call details The share is currently trading slightly below our fair value range of SEK 53-117 per share.
However, we continue to like Arise’s project portfolio, which if successful should generate significant profits over ‘22e and ‘23e. On our estimates, the share is trading (pre-Q1 figures) at 9. 5x ‘21e EV/EBITDA, which comes down to 2.
3x EV/EBITDA in ‘22e due to significant revenue recognition.
