We understand that the company is struggling with delivering project Skaftåsen in time due to WTG delivery delays. This raises several related concerns, e.g. the timing of grid connections. As such, Arise has postponed the project Skaftåsen COD Q2’22 (prev. Q4’21), and it is hard to predict project how affected profits will be at this point. Tormsdale has also been postponed by one year and now scheduled for ‘23/’24. All in all, this leads us to reallocate our project estimates and lower our project margin assumptions. We lower our ‘21e EBIT estimates by c. 54% and ’22-‘23e by 1-16%.
Strong pipeline, dependent on successful project execution
We argue that Arise has a strong project development pipeline of >2,600 MW, although the majority of this is likely be realised at least five years from now if the company proves able to overcome the remaining uncertainties. However, we are starting to become slightly concerned that earnings visibility remains low. We lower our fair value range to SEK 50-118 (53-122) per share on estimate revisions.
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