Arise: Similar to Q1, but with softer wind conditions - ABG

Q2’21 expectations
We expect Q2 sales of SEK 43m, up 42% y-o-y (29% from development and solutions and 71% from own power production). Company announcements during the quarter indicate that own power production will amount to c. 61 GWh in Q2, 16% below the quarter’s budget of c. 72 GWh due to softer than normal wind conditions. As a result of lower electricity production and higher market prices for electricity (+170% y-o-y in price areas SE3 and SE4 where Arise’s own farms are located), we expect own production sales of SEK 30m. We estimate development and solution sales of SEK 13m, supported by revenue recognition from construction of the Skaftåsen project and an additional income (ABGSCe SEK 3m) from the sale of project Bröcklingeberget. We forecast group EBIT of SEK 7m, for a margin of 15.3% (-41.3%), and net income of SEK -4m (-27m). Last week, Arise announced that it has received an environmental permit for the c. 300 MW Kölvallen project; this has no impact on our estimates but is positive for the project development.