Q2 revenues jumped to NOK 74m (eNuW: NOK 70m), up 36% yoy and 9% qoq, stemming from a 60% yoy increase of power production to 117 GWh. While hydro power contribution was stable yoy with c. 68 GWh, wind assets produced c. 50 GWh, up seven-fold yoy. The jump in wind energy is explained by the completion of the Han and Odal wind farms at end of 2022 with a capacity of 21 MW and 54 MW respectively. The production from the newly acquired 106 MW Odin portfolio (see update June 7^th) was also included in the June figures. Cloudberry sold 96% of the production at spot prices an realized an average price of NOK 760/MWh down 25% yoy but still on a high level.

The highlight of the Q2 release is the blow-out EBITDA of NOK 281m, up nine-fold yoy. Yet, this was mainly the result of a NOK 259m (eNuW: NOK 248m) book gain from the sale of three hydro assets with a total capacity of 19 MW (see update from June 20^th). This deal nicely underpins the hidden values looming in Cloudberry’s balance sheet. Mind you, Cloudberry conservatively books all his self-developed assets at cost rather than fair value.

The two projects that are under construction, the 8 MW hydro plant Øvre Kvemma and the 32 MW wind farm Sundby, are on time and budget. A final investment decision for the 19MW Munkhyttan I wind project in the attractive price region SE-3 (Sweden) was taken in June. This project should contribute 60 GWh p.a. once completed at the end of 2024 (already reflected in our est.). To finance further growth Cloudberry can rely on NOK 1.1bn cash and a NOK 2.2bn credit facility (NOK 1.1bn drawn) with an interest rate of <2%, which can be extended by an additional NOK 0.3bn.

Ground rent tax: The Norwegian renewables industry addressed the Norwegian government making it clear that in order to further develop local renewable assets, a clear framework is needed, which excludes a ground rent tax on existing wind parks. While the parliament is currently on summer break, this should be discussed in Oct. A decision, especially on the ground rent tax is expected for early 2024.

On September 5^th the company will hold a capital market day, where they will give more detailed insights in some of the projects of the pipeline and will give more details on the strategy towards the year 2030. Once again, Cloudberry published strong quarterly figures and is executing its projects like a clockwork. We reiterate our BUY with a PT of NOK 22 based on SOTP.