Yesterday, Cloudberry hosted a capital markets day. Here are our key takeaways:

Strong capital base to develop the current backlog. With NOK 1bn cash on hand and a NOK 1.1bn credit facility (< 2% interest) granted by Norwegian saving banks, the company is well equipped to develop the project backlog, exclusive projects to Cloudberry, of 491 MW (~1.5TWh), wind (438 MW), hydro (50 MW) and solar (3 MW); see page 2. The company can also execute the proportionate 50 MW Stenkalles and 60 MW Duvhällen wind projects currently in the development phase. With the grid concession recently being grated for the latter, a final investment decision should follow in the short term.

Favourable long-term pricing. Cloudberry focuses on projects in the southern regions of Norway and Sweden to profit from higher regional power prices (NO1, NO2, NO5, SE3, SE4). Thanks to interconnections with the UK, Germany and the Netherlands, where power prices are usually higher than in the Nordics, prices should stay at a high level in the long-term. (eNuW: NOK 500/MWh).

Odin transaction, a Danish door opener. The 106 MW Odin wind portfolio acquisition, almost all the MW located in the high pricing DK1 region, was a strategic step to entry the Danish market paired with a development agreement with Skovgaard to for projects with an additional 350 MW capacity. The 350 MW comes on top of the aforementioned exclusive backlog of 491 MW.

3x the production portfolio until 2030. Thanks to its local development teams, the greenfield development business is one of Cloudberry’s competitive advantage resulting in equity IRR’s of over 15% compared to 6-9% for the operating assets. Latest divestments  yield IRR of > 55% showing the high profitability of the business. Until 2030, the company aims to develop 3 TWh of new projects of which 1 TWh should be added to the own portfolio. Another one TWh of production capacity should be added through value value accretive M&A transactions until the end of the decade

Further, Cloudberry announced a share buy-back program of up to 7m own shares (2.4% of outstanding shares), at a price of up to NOK 14.60 per share (book equity per share excluding minority interests) which would use less than 10% of existing cash and not burden any of the expansion plans.

Cloudberry remains a BUY with an unchanged PT of NOK 22 based on SOTP.