Renewable Weekly – 8 May 2024

This week, we look at key takeaways from GWEC's 2024 Global Wind Report.

Renewable Weekly – 29 April 2024

This week, we summarise our Q1 previews for the sector.

Cadeler (Buy, TP: NOK72.00) - Progressing as planned

The H2 results were in line with the guidance, and the new 2024 EBITDA guidance of EUR105m–125m is supportive for the growth case in our opinion, and largely in line with consensus and as we expected. New cranes have been installed on the O-class vessels, and the newbuilds are progressing well, with the first vessel (Wind Peak) due for delivery in August, which could allow some short-term work ahead of the Sofia contract in 2025. We have made limited estimate revisions, and reiterate our BUY and...

Cadeler (Buy, TP: NOK72.00) - Guidance in focus for H2 results

As the H2 results will be the first with Eneti consolidated in the balance sheet and partly included in the P&L (merger closed mid-December), there could be noise on the reported numbers versus sell-side modelling. Based on company guidance, H2 EBITDA should be just above breakeven, and we forecast 2024 adj. EBITDA of EUR117m (large consensus spread; median EUR115m). Given the record tender pipeline, we expect positive contract news flow ahead, and consider the valuation attractive at a 2026e ad...

Cadeler (Buy, TP: NOK72.00) - Extending the lead

The Cadeler growth journey continues with the order of a third A-class foundation installation vessel at accretive terms, as it is exercising an existing option with the yard. We see solid prospects for this vessel as we forecast an undersupplied market, supported by a tender pipeline up 100% since last summer. Management is also upbeat on near-term opportunities in the foundation space for its turbine vessels and purpose-built foundation newbuilds. The transaction is accretive; thus, we have ra...

Cadeler (Buy, TP: NOK70.00) - Wearing the yellow jersey

Having executed a successful combination with Eneti, Cadeler is set to reap benefits operationally and in the capital markets as the undisputed industry leader. Compared to other parts of the offshore wind value chain, Cadeler appears largely protected (or even benefiting) from recent headwinds. The installation vessel market remains undersupplied for the foreseeable future and recent contracts suggest record-high dayrates. We reinstate coverage with a BUY and NOK70 target price.

Cadeler (No_rec, TP: NOK) - Creating the industry leader

The proposed combination of Cadeler and Eneti is set to create the leading offshore wind-installation company. Due to DNB Markets’ role in the transaction, we have withdrawn our recommendation and target price.

Cadeler (Buy, TP: NOK60.00) - Starting to walk the foundation talk

With Cadeler being vocal about stepping into the business of ‘T&I services’ for foundation installation, we believe the contract announced last week with Orsted for Hornsea 3 is a key milestone for the company. In addition to providing the foundation installation vessel, it is set to execute multiple other services, likely totalling cEUR500m. It also announced that it will install 50% of the turbines at the project. We previously assigned some value to the prospect of it taking on additional ser...

Northern Lights

Cadeler (Buy, TP: NOK55.00) - Focus remains on out years

We see limited impact from the below-consensus 2023 guidance presented with last week’s 2022 results, as in our view the investment case is about 2025 onwards, when the O-classes are upgraded and the four newbuilds put into operation. In this note, we explore the incremental earnings potential from Cadeler’s expansion into ‘T&I services’ for its two foundation newbuilds, which we believe could increase vessel EBITDA by 50–100% versus a ‘vessel only’ scope, though with some additional risks. We r...

Havfram wins parts of Hornsea 3 turbine work

Havfram today announced its maiden newbuild turbine installation contract for Osted’s Hornsea 3 project. Following recent talks about potential Hornsea 3 delays or even cancellation, we consider it positive for the industry that the project is progressing (in particular for Cadeler, which has the foundation installation contract). Havfram did not comment on contract economics, but as this job is its maiden newbuild contract and provides for decent duration (1 year), we see annualised EBITDA of c...

Vestas says turbines are big enough

Vestas’ CEO said in an interview that wind turbines are big enough for now. We believe a key investor concern surrounding WTIV companies (Cadeler, Eneti) has been that turbine sizes will outgrow vessel capabilities (as they have in the past), and that Vestas now signalling a slowdown of growth could ease this concern. Hence, we consider the comments from Vestas to be positive for WTIV companies as it reduces the risk of the current high-end installation assets becoming obsolete.

Havfram’s entry confirmed

Havfram’s entry into the offshore wind installation market has been confirmed today, as it announced its first newbuild WTIV order with CIMC Raffles in China, with options for more vessels. Its entry had been expected for some time, as Havfram last year signed an LOI with CIMC Raffles for a “series” of vessels and last month secured USD250m from Sandbrook Capital (PE) to fund its newbuild programme. Havfram today said it has raised another USD250m in equity from PSP Investments (via Sandbrook Ca...

Havfram ownership change suggests newbuild move forward

Private equity company Sandbrook Capital has acquired HitecVision’s majority stake in Havfram’s offshore wind business and committed to investing USD250m in new equity, according to a press release by HitecVision today. The new equity will be used to finance a series of wind turbine installation vessels (WTIV) newbuilds, which are set to increase competition in the high-end WTIV segment (although we still await clarity of the number of vessels and specifications). Havfram has previously been voc...

Northern Lights

Cadeler (Buy, TP: NOK55.00) - The leading offshore wind installer

Cadeler is pulling ahead of its competitors and placing itself as the clear leader in offshore wind installation, with a fleet of six high-end installation vessels. The newbuild programme is supported by solid contracting success in recent months, and we like the shift towards more long-term contracts, providing even more earnings visibility to 2026 and beyond. The stock looks attractively valued at 2025–2026e EV/EBITDAs of 4.3–3.2x; we have raised our target price to NOK55 (50) and reiterate ou...

Cadeler (Buy, TP: NOK50.00) - Near-term noise should be ignored

H1 was affected by the phasing of revenues as Cadeler trimmed its full-year guidance by c4%, to EUR56m–65m (EUR56m–70m previously). Management seemed even more bullish on the market outlook than earlier, and we believe the company’s already-superior backlog coverage will improve further. We continue to see the shares as attractively priced versus our updated SOTP of NOK60 per share (NOK52 earlier) and an EV/EBITDA of 3.3x–4.0x in 2025–2026e when the newbuilds are in operation. We reiterate our B...

Cadeler - H1 on the soft side, but strong outlook

H1 EBITDA EUR 23m vs. ABGSC 30m ’22 EBITDA guidance EUR 56-65m (56-70) Strong outlook – buy on any weakness today

Nothern Lights

Cadeler (Buy, TP: NOK50.00) - A hidden gem

Growth in the offshore wind sector keeps accelerating, with project awards under the UK CfD Round 4 likely to produce a wave of contracts for the installation industry. We see Cadeler as well positioned to increase its backlog, supporting its 2022–2026e EV/EBITDA valuation of c4x. We consider its business model to be well protected from project delays and have raised our target price to NOK50 (45) due to its recent newbuild order, and reiterate our BUY.