Q2 consolidated sales grew by 42% yoy to $ 2.4m as the group's energy output increased to 29.1 GWh driven by the ramp up of the company's production portfolio; two projects became operational throughout 2023.

The group's consolidated Q2 EBITDA improved notably from $ -0.3m (Q2 2023) to $ 1.1m (37% margin) thanks to the positive operating leverage but also the successfully implemented efficiency measures on the holding level (e.g. reduced overhead and renegotiated contracts with suppliers). For FY24e, the company is on track to hit the targeted 30% cost reduction vs previous year. Still, EBITDA was impacted by negative one-offs to the tune of $ 100k, related to unforeseen energy purchases.

MPCES’ FY24e guidance reiterated. Management continues to expect significant growth across all of its KPIs; energy output +44% yoy to 145 GWh, project revenues +32% yoy and project EBITDA +93% yoy. Above all, this should be carried by the ramp-up of its production portfolio. Mind you, over the course of FY23, the company finalized two projects (Los Girasoles in May and Planeta Rica in November), which will impact the full year of 2024. The guidance is largely in line with our estimates.

Project development remains on track. The construction of its 65MW PV project in Guatemala, which begun at the end of February, is progressing as planned and installation of module substructures is seen to commence in August. While MPCES has not yet signed a co-investor (49% stake of the project), we expect this to happen until the end of this year. Importantly, finding a co-investor has ultimately no impact on the construction timeline as MPCES has already fully financed the project.

Once the project is completed (eNuW: mid-2025), it is seen to generate annualized sales of some $8m.

Despite the good year-to-date share price development (~ +25%), we continue to regard the valuation as attractive. This is particularly evident when considering that the company trades on a roughly 60% discount to the NAV of its assets at the end of Q2 (see page 2). At the same time, renewable assets usually sell at a premium to their book value.

We confirm our BUY rating with an unchanged NOK 23 PT, which is based on sum-of-the-parts (SOTP) valuation, separately accounting for the value of its current IPP portfolio (NPV) and its development backlog (multiple).