Eolus Vind - Öyfjellet is coming
Q5’19/20 report (extended FY) due on 19 February New reporting standard and delays impact our estimates Fair value range of SEK 200-260 per share Q5’19/’20 expectations Eolus Vind has decided to change its reporting standard, from a split to a normal calendar year, which means that there will be five quarters for the ’19/’20 period (and therefore not comparable with previously reported figures). For the quarter ending Dec ’20, we forecast group net sales of SEK 737m, of which we expect 99% to stem from project development (SEK 728m) and the remaining 1% (SEK 10m) from the 900 MW under asset management. Combined, this should sum up to a group EBIT of SEK 67m, for an EBIT margin of c. 9% (vs.
SEK 72m and a 7% EBIT margin in Q4’18/19). The company has not yet communicated any new information regarding the completion of the US project Wind Wall, which should have been delivered at the end of 2020. We expect a few more months of delay and now estimate that the project will be delivered during Q1’21.
However, we expect some revenue recognition from the Öyfjellet and Wind Wall projects as development continues; we forecast revenue recognition of 14% for Öyfjellet (SEK 76m) and 24% for Wind Wall (SEK 11m). Revenue recognition to be delivered in 2021e On the back of our expected revenue recognition of Öyfjellet and Wind Wall, as well as the new reporting standard for Eolus, we lift our sales estimate by 53% for ’19/20e, and reduce it by -5% for ’21e and -63% in ’22e. We raise our EBIT estimates by 30% in ’19/20e and 34% in 21e, but lower it by -67% in ’22e.
In the Q5 report we expect management to guide for a new final project sale date for the Wind Wall project. Solid project outlook - fair value range of SEK 200-260 The share has continued to rise (1Y share price development of +30%). However, we still think that the company’s current projects of 7,000+ MW (with c.
1,750 MW to be delivered during ’21-’24e), incl. the partnerships with SCA and Vind.