Eolus Vind - ’21e-’23e EPS up 11-23% after acquisition

Jointly acquires a fully-permitted project of ~260MW We raise ’21e EPS by 13% and ’22e-’23e by 11-23% New fair value range of SEK 200-260 (193-252) Jointly acquires a wind power project, capacity up to 260 MW On Friday, Eolus announced that it had acquired its second wind power project within one week. Eolus and Hydro REIN have jointly acquired the fully-permitted ‘Stor-Skälsjön’ wind power project from Enercon, of which Hydro REIN and Eolus will own 49% and 51% of the project, respectively. The project’s capacity totals up to 260 MW, and depending on the turbines they choose, the outcome is likely to be 250-260 MW. It is located in the Sundsvall and Timrå municipalities in the Swedish SE2 electricity price area and will be covered by a 12-year PPA contract with Hydro.

The purchase price for the project rights was EUR 17m, and besides this, Enercon will be compensated for the conducted construction works. The project has a signed grid connection agreement and the connection is expected to be completed this summer. Further, the sales process will be initiated this summer, and later during the autumn, supplier contracts will be signed with commissioning expected to commence in H2’23.

Acquisition behind positive estimate revisions Before we receive any additional information about the project and its earning structure, we assume a capacity of 250 MW, with revenues of SEK 10m/MW and a 10% EBIT margin. It has not yet been decided how the revenue will be split, but we expect Eolus to receive 100% of the revenue recognition and project-related cost, after which 49% of the project’s net profit will be attributable to Hydro REIN’s shareholders. Finally, we expect the project to be sold, with the revenue recognition to begin in Q4’21, and the commissioning to take place in Q4’23.

Based on the acquisition, we raise our ‘21e EPS by 13% and our ’22e-‘23e EPS by 11-23%. We raise our fair value range to SEK 200-260 (193-252)/share This acquisition stren.