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Short-term factors cloud results, story intact

Despite its reported 8.9% revenue decrease in 9M16 vs 9M15, we remain convinced of Ellomay’s ability to generate cash flow dependably from its solar assets in Italy and Spain to reinvest in its diverse pipeline of international power generation assets. Temporary factors – both lower solar radiation (worse weather) and lower spot prices – hit Ellomay’s 9M16 results and we therefore reduce our FY16 revenue forecast by 9.7% to take account of this. However, we leave our FY17 forecasts little changed and increase our FY18 numbers on power price forecasts and currency moves. 9M16 results contained nothing to permanently unsettle investors on Ellomay and its equity story. On the contrary, there has been good progress towards the development of several Dutch waste-to-energy assets, which could meaningfully enhance Ellomay’s returns.