Eolus Vind - ’22-’23e EBIT up 24-18% after acquisitions
Acquires two fully permitted wind power projects in SE3 We raise ’22e EBIT by 24% and ’23e by 18% New fair value range of SEK 193-252 (190-250) Acquires two wind power projects, totalling 99 MW On Friday (18 June), Eolus Vind announced that it has acquired two fully permitted wind power projects from RWE Renewables Sweden. The purchase price was not disclosed, but we argue that a premium is warranted due to the late development stages of the projects and thus the lower project risk. The projects are located in Sweden, in price area SE3, and management highlights that it sees continued strong investor interest in this area due to the higher electricity prices. Together, the acquired projects total 99 MW, of which 74.
4 MW in Avesta municipality (Skallberget/Utterberget) and 24. 8 MW in Hedemora municipality (Tjärnäs), areas where Eolus has solid experience from earlier projects. The sales process will begin this summer with the ambition to sign an investor agreement during the autumn.
The commissioning is planned during 2023. Acquisitions lead to estimate uplifts We argue that this is in line with Eolus’ ambition to continuously increase its project pipeline in both the near and long term. Besides, we see acquisitions as a good complement to Eolus’ greenfield projects and argue that they help the organisation to continue to build experience from a large number of projects.
All in all, we expect SEK 10m per MW in revenue (SEK 990m) and a 10% project margin for these projects. In addition, we expect the wind farm construction to begin in Q3’22 and if everything goes as expected the projects should be handed over in Q2/Q3’23. This leads us to raise ‘22e EBIT by 24% and ‘23e by c.
18%. New fair value range of SEK 193-252 (190-250) per share The share is down roughly 8% in the last month, trading below our fair value range and at 15. 3x ’21e EV/EBIT.
We raise our fair value range slightly to SEK 193-252 (190-250) per share on higher estimates and reitera.
