Q4’21 expectations We expect Q4 sales of SEK 95m, with SEK 78m from Production and SEK 16m from Development and Solutions. The key driver in the quarter is the high electricity prices, which has to some extent been offset by lower-than-expected electricity production of 82 GWh (-12% vs. ABGSCe). We estimate a group EBITDA of SEK 70m, of which Development & Solutions contributes SEK 3m and Production adds SEK 67m. We forecast a net profit of SEK 90m. In addition, we think that the pipeline will remain relatively unchanged compared to the end of Q3, at ~2.6 GW. Good outlook expected We expect management to present an optimistic outlook for the coming 2-3 years. The high electricity prices are likely here to stay and we have raised our ’22e-’23e forecasts: we now expect Arise to realise market prices in SEK/MWh of SEK 850 for ’22e and SEK 750 for ’23e, up from SEK 750 and SEK 650. Important to note is that Arise is not able to benefit fully from the high spot prices, since its production is not always producing most electricity at the same time as spot prices are peaking (intra-day). On the development side, we expect management to reiterate the estimate of the 277 MW Kölvallen project going to financial close in Q2’22. All in all, we have raised our ’21e-’23e EBIT by 2-5%, solely due to the higher electricity price forecast. We raise the fair value range to SEK 60-140 (50-118) The stock trades at 3.6x and 2.5x ’22e and ’23e EV/EBIT. As a consequence of the higher earnings forecasts, we have raised our fair value range to SEK 60-140 (50-118), where the high end implies ~10x ’22e EV/EBIT. Läs mer på Introduce
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