Topic: Cloudberry reported strong Q1 figures despite production shortfalls at the Odal wind farm (covered by warranties). A final investment decision for its transformative 175MW PV park in Denmark is expected until the end of the year.

Q1 consolidated revenues grew by 89% yoy to NOK 129m, largely in line with our estimates thanks to the strongly increased production volumes of 173GWh (+93% yoy). This should, above all, be carried by the Danish wind portfolio Odin (106MW net to Cloudberry), which was bought at the beginning of June 2023. While the average power price decreased yoy from NOK 118/MWh to NOK 73/MW/h it is largely in line with Q4 price levels of NOK 76/MWh.

Q1 consolidated EBTDA jumped by 190% yoy to NOK 58m. This was despite a significant shortfall from the Odal wind farm (reported as income/loss from associated companies) due to severe operational issues (EBITDA decreased from NOK 29m to only NOK 7m).

To recap, Odal wind farm uses blades from Siemens Gamesa, which announced severe issues with multiple series. Hence, only 50-60% of the Odal turbines were operational in Q1. The related production shortfall is to be covered by warranties. The claim at the end of Q1 (so far not booked) amounted to € 14-17m. With additional stand stills following a blade braking off in Q2, claims should further increase.

The Subby windfarm in Sweden was successfully erected ahead of time and has begun generating electricity.  Under standard weather assumptions Sundby is seen to produce 89 GWh per annum yielding annual revenues of c. NOK 56m by assuming an avg. power price of c. NOK 640/MWh.

Pipeline remains strong. The two projects under construction are progressing according to plan and cost. The 19 MW Munkhyttan wind farm should be erected by the end of the year 2024 and the 8 MW hydro power plant Ovre Kvemma is built and is expected to be connected to the grid in the following weeks. Due to the recent significant price deflation of solar panels, Cloudberry is speeding up development of the planned 175MW PV plant in Denmark. The final investment decision is expected still this year. The total backlog stands at 911 MW.

Cloudberry remains a BUY with an unchanged NOK 19 PT based on SOTP - change of analyst -