Topic: Cloudberry closed the acquisition of the Odin 106 MW wind portfolio and announced the final investment decision for its in-house developed 18.6 MW wind farm Munkhyttan I.

Cloudberry bought 80% of the Odin portfolio's shares. The part net to Cloudberry consist of 106 MW and 311 GWh of green electricity, increasing the capacity of its production portfolio by over 70% to 254 MW. The purchase price for Cloudberry’s stake amounted to DKK 1,265m. DKK 733m (NOK 1,074m) of which was paid in cash and DKK 532m was financed through debt. Together with the existing project debt on Odin (DKK 212m) the total EV of the Odin transaction stood at DKK 1,478m.

The Odin portfolio consists of 51 high quality Vestas and Siemens turbines with an average available uptime of 98%. All turbines are in production, cash-flow generating and located in the attractive price zones of DK1, DK2 and SE3. The large majority (95%) of the production capacity is located in the Danish price zone DK1, currently paying c. NOK 1,190/MWh. Thanks to the Odin acquisition, Cloudberry enters the Danish market and further diversifies its Nordic based production portfolio.

The capacity weighted age of the portfolio is around seven years with an implied remaining lifetime of c. 23 years (avg. useful lifespan of newer generation wind turbine is 30 years). In light of the resulting sound equity IRR of around 8% (eNuW), which is clearly above the assumed WACC of 5%, we regard this transaction as value accretive.

Further, Cloudberry announced the final investment decision for Munkhyttan I, an in-house developed 18.6 MW wind farm located in Sweden’s attractive price zone SE3. The estimated annual production is about 60 GWh with a 97% uptime guarantee. We estimate a total CAPEX of NOK 366m (eNuW) and model first revenues (eNuW: NOK 3.2m p.a.) from Dec. 2024e onwards. In the past, Cloudberry finalized its projects ahead of plan, which would pose some upside to our figures.

Cloudberry is further executing its project pipeline and has proven to be on budget and on time. With the Odin transaction, Cloudberry’s portfolio has reached a critical mass of 254 MW, which enables the possibility to enter PPAs with larger off-takers. Being able to fix power prices for parts of the portfolio for the longer term would notably increase visibility on future cash flows, a sensible step, particularly in light of the currently volatile electricity markets. BUY with a new PT of NOK 21 (old: NOK 20) based on SOTP.