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We adjust our TP to NOK 23 (22), reflecting updated power price and growth assumptions, offset by dilution from the latest capital raise. Through recent transactions, Cloudberry is taking the step up to become a fully integrated IPP, and with a local foothold/angle and a very flexible business model, we continue to like the company’s value proposition. BUY reiterated
Transforming into a fully integrated IPP
Cloudberry has continued to actively expand its portfolio though M&A this year, adding assets across the operating, under construction and late-stage development phase. Through the acquisition of an operating platform in Captiva and new hires, the company has also transitioned from a pure greenfield developer and asset owner, to a fully integrated IPP. If all projects are pursued, the company is now fully invested after the capital raise late last year.
Expect FID and divestment at key Stenkalles project before summer
We expect the company to sign of a corporate PPA and reach financial close of its 100MW Stenkalles project at lake Vanern before summer, including divestment of a 50% stake. We currently estimate NOK ~200m in net value creation, with potential upside as the project is de-risked. Aside from the direct financial implications, success at Stenkalles will be important an “proof-of-concept” of Cloudberry’s developer capabilities, and act as an important steppingstone to the company’s offshore ambitions in the Baltic Sea.
Strategic positioning in southern Scandinavia paying off
Cloudberry has strategically targeted the southern price areas of Scandinavia since its inception, which is looking like an increasingly wise decision. We increase our near-term electricity price assumptions and refine our power price curves to reflect the north/south grid constraints, expected to result in continued large regional differences in power prices the next years. We also update our estimates to reflect proportionate financials, which are more representative of underlying earnings.
Target lifted to NOK 23 (22), BUY reiterated
On the back of updated power price forecasts, we increase our valuation of Cloudberry’s power plants by 10%. Following recent transactions and increased renewable ambitions across Europe, we also lift our growth assumptions. Offset by dilution, this increases our SOTP to NOK 23 (22) of which NOK ~14 is backed by its operating power plants providing downside protection.
Cloudberry takes over Ramsliåna (6 GWh)
Cloudberry Clean Energy ASA has today taken over Ramsliåna hydropower plant located in Flekkefjord municipality, Agder County. The annual production is expected to be 6 GWh per year, enough power to keep 2200 #electriccars running for a year.
