Revenues grow by 33% yoy to NOK 73m (eNuW: NOK 108m) thanks to the growing installed based. Power production more than doubled from 70 GWh to 155 GWh (+120% yoy and +32% qoq), whereas 65% is from wind and 35% from hydropower. Despite higher volumes produced in Q3, revenues were flattish qoq, due to a drop in realized power price of 34% to NOK 500/MWh qoq. The drop is explained by unusual high precipitation after a storm which has increased the hydro balance in Norway’s high-priced southern regions and therefore pushed prices downwards.

EBITDA fell to NOK 2m after NOK 74m in Q3’22. This sharp decline is primarily explained by a negative contribution of NOK 13m from net income from associated companies and joint ventures which contributed NOK 76m in Q3’22. In detail, the Odal wind farm (54 MW share) contributed a loss of NOK 9m vs. a positive contribution of NOK 51m in Q3’22 and the Forte hydro portfolio (25 MW share) resulted in a NOK 4m loss vs. a NOK 25m contribution in Q3’22, both mainly driven by notably lower power prices.

Positively, Cloudberry signed a three-year baseload PPA with Energi Danmark. As of 2024, Cloudberry sells 31.5 GWh produced by its Odin portfolio in the Danish price zone DK1 for a fixed price of NOK 1,220/MWh. The price is highly attractive and well above the expected three-year average price of NOK 581/MWh (eNuW) and underpins the willingness by European institutions to pay for renewable energy. The volume sold represents 4% of Cloudberry’s production in 2024. With that, Cloudberry makes another step to its target of 70% merchant exposure and to streamline its revenues. In Q3, 92% of the production volume was sold at spot prices and largely hit by the spot price volatility.

Tax issues: An updated proposal foresees a reduction of the resource rent tax for onshore wind from 40% to 35% and the termination of the 23% surplus taxes for prices >NOK 700/MWh as of October 1^st. The proposal is not final and will be further discussed with a final decision expected by year end.

What's, the backlog of exclusive projects to CB was increased to 686 MW (420 MW last year) and all projects currently under construction are before or on schedule and on budget, showing the great management skills of the entire team. Further, CB announced a share buyback program. In the first phase, the company will buy back 3m shares at a max price of NOK 14.6 with phase two launching in Jan. 2024.

Reiterate our BUY with a new PT of NOK 20 (old: NOK 22) based on a SOTP.