Topic: Cloudberry released its preliminary Q4’23 figures with the annual report expected to follow on March 20^th. The operationally strong Q4 results were burdened by a NOK 57m one-off effect related to a complete write down of its 100 MW shallow water wind project Steenkalles in cooperation with Hafslund as this project will not be further developed. Another NOK 18 m expense (non cash) is related to the Odal wind farm, impacted by the resource rent tax in Norway.

Indeed, the resource rent tax became effective as of January 1^st and set at 25% instead of the previously discussed 35%. Positively, the tax design is investment neutral for new wind projects, i.e. they will not be burdened. We therefore expect Cloudberry to start looking for new wind developments opportunities across Norway again.

Q4 sales grew 70% yoy to NOK 119m well above our estimates (eNuW: NOK 80m). The jump is explained by higher production volume, up 65% yoy to 157 GWh, mainly driven by the acquisition of the Odin Portfolio and an high average selling price of NOK 760/MWh vs. NOK 650/MWh (eNuW).

Q4 EBITDA came in at NOK -41m (eNuW: NOK 85m) due to a negative contribution of NOK 86m from associated companies under which Cloudberry reports the net income/loss from its participations in associated companies. The drivers for the negative result are the beforementioned one offs related to the Steenkalles project and Odal.

Furthermore, the Sundby windfarm in Sweden was successfully erected ahead of time and below the estimated costs of c. NOK 565m (eNuW) and should contribute as of the beginning of the new year and is now reflected in our estimates. Under standard weather assumptions Sundby is seen to produce 89 GWh per annum yielding in annual revenues of c. NOK 56m by assuming an avg. power price of c. NOK 640/MWh. Additionally, 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.

Cloudberry delivered again on point and time showing its operational excellence. Remains a BUY with new of PT of NOK 19 (old: NOK 20), based on SOTP, reflecting the impact of the 25% resource rent tax.