Eolus Vind - Profit recognition should be the Q1 driver

Q1’21 report due on Tuesday 18 May Small ’21-‘22e estimate changes in absolute numbers LT appears intact with new entry in Poland; SEK 190-250 Q1 expectations: revenue recognition to colour the quarter Eolus Vind has decided to change its reporting standard, from a split to a normal calendar year, which means that there were five quarters for the ’19/’20 period (’21e figures will thus not be comparable with previously reported figures). We expect Eolus Vind to deliver a decent Q1 report, with group sales of SEK 333m, of which we forecast 97% to have support from project developments, primarily driven by revenue recognition of the US re-powering project Wind Wall (47 MW; 13% RR in Q1’21e) and the large Norwegian project Öyfjellet (400 MW; with 5% RR in Q1’21e). The remaining 3% should be helped by the ~900 MW under management. Combined, this should sum up to group EBIT of SEK 24m, for a margin of 7.

2%. However, last month, Eolus Vind announced that the company has entered Poland, and based on the assumption that Poland will have phased out all of its coal plants and moved towards RES following broader European emission targets and foreign policy pressure, we believe that this indicates good opportunities for the company’s ability to raise new projects. Small estimate changes; ‘21e project deliveries still intact We keep our estimates relatively unchanged in absolute figures at this stage.

However, we lower ‘21e EBIT by ~5%, but raise ‘22e EBIT by 26% due to minor project profit revisions for ’21-‘22e. All in all, we still expect the hand-over of the Wind Wall project in Q2’21 and Öyfjellet in Q4’21. Stock -17% in L3M, reiterate fair value range of SEK 190-250 We still argue that Eolus’ has an extensive project portfolio with 7,830 MW and the combination of onshore, solar PV and storage solutions makes us confident that the company has a solid profit foundation.

Further, the new entry intro Poland should most likely open for new portfolio projects.