Eolus Vind: Anticipating a soft Q3 - ABG

- Expect weak Q3, revenue recognition from one project
- Raise '24e EBIT by SEK 376m & '25e-'26e by 24-15%
- Centennial Flats an important milestone, de-risks '24 estimates

Expect Q3 to be weak
We expect Q3 to be soft, as Eolus Vind will only receive revenue from one project – the ongoing construction of Stor-Skälsjön. We estimate net sales of SEK 67m and EBIT of SEK -19m.

We raise '24e EBIT by SEK 376m, '25e/'26e by 24%/15%
Following the change of analyst, we have thoroughly revised our '24-'26 estimates. We now estimate '24e/'25e/'26e sales of SEK 1908m/1634m/1957m and EBIT of SEK 674/473/529m. In the coming quarters, we expect Eolus Vind to divest its onshore wind projects Dållebo, Boarp and Fågelås (total of 88 MW) and its battery and storage project Pome (100 MW). In its Q2 report, the company emphasised that although there are numerous potential buyers, the process of selling projects is currently more protracted, and we therefore expect the divestment of these projects to take longer than expected. In Q4, we expect Eolus' revenues to be largely impacted by last week's announcement that Eolus Vind has achieved a milestone on its Centennial Flats solar and battery storage project. As a result, Eolus has received a payment of ~SEK 710 million (USD 64.7m), which will have a positive impact of ~SEK 550 (USD 51m) million on EBIT in Q4. The milestone payment de-risks our estimates for '24.

Centennial Flats an important milestone
The share is currently trading 2-3x P/E '24e-'26e and EV/EBIT 1.6x-1.4x, with the low multiples partly explained by the company's volatile historic earnings trend and the perceived risk level of future project sales. We believe that the milestone in Centennial Flats was important for Eolus in order to help regain investors' trust after a year of market softness.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/eolus-vind/Equity-research/2024/11/eolus-vind---anticipating-a-soft-q3/