Renewable Weekly – 15 May 2024

This week, we take a preliminary look at Vestas' Q2 announced order intake quarter to date.

Trump vows to stop offshore wind development with executive order on d...

Over the weekend, former US president Donald Trump said he would issue an executive order targeting offshore wind on his first day as president if elected. A president can issue an executive order directing a study of the impact while halting permitting of new projects. While this could negatively affect US permitting and thus the growth of offshore wind in the country, all other elements for the wind farms are determined on a state level. Hence, permitted wind farms would likely see a limited e...

Positive read-across from OX2 offer

This morning, renewable energy project developer OX2 announced it has received an offer from infrastructure fund EQT at a 43.4% premium to Friday’s close. We view this as further evidence of a greater willingness to pay for renewables in the private markets than the public ones, and thus believe the bid offers a positive read-across for renewable energy companies with strong development capabilities in the Nordics/Northern Europe, such as Cloudberry and Bonheur. We also believe it could be posit...

Renewable Weekly – 8 May 2024

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

Q1 likely just a bump in the road

Bonheur (Buy, TP: NOK275.00) - Limited knock-on effects from the weak ...

Bonheur reported Q1 EBITDA well below expectations (25% below our estimate and 33% below consensus), but we see limited knock-on effects for the rest of the year. Hence, we have lowered our 2024e EBITDA by 5% on the weaker-than-expected Q1 results, and raised our 2025–2026e EBITDA by 2–1% on a weaker NOK. We reiterate our BUY and NOK275 target price, and see the stock trading at an attractive 28% discount to our NAV and a 15% discount to our target price.

Q1 first take: soft wind and higher costs

Q1 should be decent

We are 10% above FactSet cons on Q1e EBITDA. Small positive estimate changes on better power prices. Attractive valuation levels: P/Core NAV 0.94x, '24e P/E 16.8x.

Renewable Weekly – 29 April 2024

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

Bonheur (Buy, TP: NOK275.00) - Q1e hit by lower power prices

We expect Q1 to be hurt by lower power prices and an idle turbine installation vessel, and forecast Q1 EBITDA of NOK817m, well below consensus. With no ongoing construction activity, we expect focus to be on how to get the consented onshore capacity into operation, and contracting activity in FOWIC. We reiterate our BUY but have cut our target price to NOK275 (290) on lower long-term power price expectations reducing our NAV and a slightly higher discount to NAV.

Bonheur (Buy, TP: NOK290.00) - Undervalued, but no near-term triggers

Despite the strong Q4, we have cut our 2024–2025e EBITDA by 5–8% due to lower forward power prices and are now 5–9% below consensus. Our lower power price expectation has also led us to cut our target price to NOK290 (305). We reiterate our BUY and the stock remains our top pick among renewable energy producers, trading at an attractive 37% discount to our NAV, but we struggle to see any near-term triggers.

Bonheur (Buy, TP: NOK305.00) - Consensus seems too high

We expect lower power production and lower UK power prices to weigh on Q4, and forecast NOK910m EBITDA, 14% below consensus. We have cut our 2024–2025e EBITDA by 27–17% on a combination of lower UK forward prices (-30% over the past two months) and a drop in the contribution from Wind Services after the US contract was cancelled. We are now 10–7% below consensus, but expect it to come down. We reiterate our BUY and NOK305 target price, with the stock trading attractively at a 28% premium to our ...

Supportive changes to Norwegian wind energy resource tax

Last night, the Norwegian Parliament agreed on an effective resource tax on wind energy of 25% versus the 35% previously proposed. At first glance, it seems the scheme will now be investment-neutral for new wind farms, which was a key pushback from the industry to the previous proposal. Among the renewable energy producers under our coverage, the new resource tax scheme will benefit Cloudberry and Bonheur. While some details are still unclear, we estimate it will increase the value of Cloudberry...

Bonheur (Buy, TP: NOK305.00) - Strong rebound in Cruise

We view the Q3 results as decent, with EBITDA 3% below consensus on higher maintenance costs and high-price contributions for its windfarms in the UK. The Cruise segment was the key positive from an operational perspective, suggesting that it is less affected by the weak UK economy than we expected. We reiterate our BUY and NOK305 target price, based on the company’s existing business, and see the stock trading an attractive 39% discount to our target price.

Bonheur (Buy, TP: NOK305.00) - Uneventful quarter expected

With company-specific triggers seen longer out in time in our opinion, we expect Q3 to be an uneventful quarter; we forecast EBITDA of NOK869m, 7% above consensus of NOK809m. We see focus on the call being on the still non-neutral Norwegian resource tax for onshore wind as well as on the challenged offshore wind market, with bids on the upcoming Norwegian tender due next month. We reiterate our BUY and NOK305 target price, and see the stock trading an attractive 41% discount to our NAV and a 33%...

Bonheur - Q3 a bump in the road

Only minor changes to post-’22 estimates Improvements ahead, but tax on wind risk coming up Still a BUY, but TP down to NOK 400 (440)

Bonheur - Q3 miss due to low wind speed

EBITDA NOK 1,083m is 22% below our estimate Low wind speed, electricity production 16% below Not as dramatic as it seems - Buy on dip today

Bonheur - Q3 was probably record strong

We expect EBITDA of NOK 1,380m Estimates up on higher electricity prices BUY on recent dip, TP NOK 440 (unch.)

Bonheur - Q2 miss, but great asset sale

Improvements ahead Asset sale supports higher valuation NAV support at NOK 450/s - a clear BUY in our view

Bonheur - Raising estimates again

Higher electricity price assumptions 2022e and 2023e EBIT up 3% and 11% Still a BUY, TP up to NOK 440 (400)