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Eolus Vind: Öyfjellet still planned for 2021 - ABG

Lower margin than expected…
…but Öyfjellet still to be completed in ‘21
’21 EBIT down 13%, fair value range lowered slightly

Eolus had Q2’21 sales of SEK 673m, 6% ahead of our forecast of SEK 634m. The main driver of the revenue was the handover of the Wind Wall project, which was delayed by 6-9 months, primarily due to pandemic-related issues. Management stated that the delay had a clear negative effect on the project’s profitability. In addition, the company recognised another 9% of revenue related to the Öyfjellet project. Group EBIT only reached SEK 8m in Q2’21 vs. ABGSCe 47m, and we suspect that in addition to the final Wind Wall revenue recognition proving less profitable than expected, the Öyfjellet project also did not contribute much to Q2 EBIT. The project portfolio increased from 7.8 GW in Q1 to 9.0 GW at the end of Q2, supported by increases across all technologies outside of Solar. In addition, the late-stage part of the portfolio increased from 1.3 GW in Q1 to 1.8 GW in Q2, an important indication that Eolus continues to successfully build its near-term pipeline.

We believe that Eolus is in a good position for long-term growth, as reflected by the growing project portfolio. Demand for renewable electricity generation remains high, and the company is confident that it can pass on cost inflation to end customers. We have slightly lowered our fair value range to SEK 195-255 (200-260), reflecting a slightly higher execution risk for the company following the Q2 report.
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