Cloudberry Clean Energy — Transformative FY23 with revenue rocketing

Research: Industrials

Cloudberry Clean Energy — Transformative FY23 with revenue rocketing

Cloudberry Clean Energy recorded a strong performance for FY23. Revenue nearly tripled compared to FY22 (NOK217m), reaching NOK610m. EBITDA also significantly increased to NOK263m (FY22: NOK151m). The company’s total portfolio capacity grew to 494MW (FY22: 316MW), with 267MW of producing assets. This expansion was reflected in Cloudberry’s increase in net assets, which rose to NOK6,691m (FY22: NOK4,603m). Despite the company’s substantial growth throughout FY23, it maintained a strong financial position, with net cash of NOK779m (FY22: NOK1,538m).

Written by

Harry Kilby

Analyst

Industrials

Cloudberry Clean Energy

Transformative FY23 with revenue rocketing

Industrials

QuickView

16 April 2024

Price

€0.74

Market cap

€216m

NOK11.63/€

Share price graph

Share details

Code

52K.F

Listing

Frankfurt

Shares in issue

291.5m

Business description

Cloudberry Clean Energy is a Nordic renewable energy company that owns, develops and operates hydropower plants and wind farms in Norway, Sweden and Denmark. The company has 267MW of assets in operation, 27MW in construction, 200MW awaiting construction permits and a 625MW backlog, as well as a pipeline of over 2.5GW.

Bull

Large pipeline and growth ambitions to 2030.

Ability to generate shareholder value across entire asset life cycle, including asset sales.

Potential to participate in high-growth solar projects.

Bear

Negative investor sentiment towards renewables.

Increased power price volatility making it harder for management to forecast future revenues.

Not yet dividend paying.

Analysts

Harry Kilby

+44 (0)20 3077 5724

Andrew Keen

+44 (0)20 3077 5700

Cloudberry Clean Energy recorded a strong performance for FY23. Revenue nearly tripled compared to FY22 (NOK217m), reaching NOK610m. EBITDA also significantly increased to NOK263m (FY22: NOK151m). The company’s total portfolio capacity grew to 494MW (FY22: 316MW), with 267MW of producing assets. This expansion was reflected in Cloudberry’s increase in net assets, which rose to NOK6,691m (FY22: NOK4,603m). Despite the company’s substantial growth throughout FY23, it maintained a strong financial position, with net cash of NOK779m (FY22: NOK1,538m).

Key events

In May 2023 Cloudberry completed the acquisition of 80% of Skovgaard’s Odin portfolio. This agreement has secured Cloudberry a majority stake in a portfolio of 51 operational wind turbines, as well as a long-term development agreement for future projects in Denmark. The Odin portfolio substantially contributed to Cloudberry’s operating cash flow of NOK224m (FY22: NOK43m) and further diversified its production profile, adding 311GWh of net production. In June 2023, Cloudberry sold three hydropower plants for record prices to a private infrastructure investor. This transaction demonstrated Cloudberry’s ability to create value for its shareholders throughout the full life cycle of its assets.

Growth ambitions: ‘3 in 30’

In FY23, Cloudberry launched an ambitious growth strategy called ‘3 in 30’. The strategy aims to achieve 3TWh of producing assets, 3TWh of permitted projects and 3g CO2 per KWh of emissions by 2030. However, Cloudberry stated that in the short term, its key priorities are profitable growth and capital discipline. The sale of its hydropower assets in June generated the opportunity to effectively recycle capital into potentially higher returning new renewables energy projects. This strategy has become more viable as the capital expenditure costs for deploying solar panels have reached an all-time low, enabling the company to participate in the strong growth expected from this increasingly competitive sector of the renewables space. Cloudberry has a pipeline of more than 2,500MW of nonexclusive projects and increased its credit facility by NOK200m to NOK2,200m. This facility aids growth at an interest rate margin of below 2%.

Valuation: Undervalued according to management

Cloudberry has begun to buy back its own shares as it believes the company is trading well below its historical asset values. Cloudberry’s consensus FY24 P/E ratio is 14.8x, which is relatively modest compared to its peers as they trade on an average of 20.6x.

Consensus estimates

Year
end

Revenue
(NOKm)

PBT
(NOKm)

EPS
(NOK)

DPS
(NOK)

P/E
(x)

Yield
(%)

12/22

217.0

122.0

0.47

0.0

26.4

N/A

12/23

610.0

222.0

0.93

0.0

12.4

N/A

12/24e

507.0

40.5

0.52

0.0

14.8

N/A

12/25e

572.2

92.5

0.70

0.0

12.7

N/A

Source: LSEG

EDISON QUICKVIEWS ARE NORMALLY ONE-OFF PUBLICATIONS WITH NO COMMITMENT TO WRITING ANY FOLLOW UP. QUICKVIEW NOTES USE CONSENSUS EARNINGS ESTIMATES.

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General disclaimer and copyright

This report has been prepared and issued by Edison. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

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No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2024 Edison Investment Research Limited (Edison).

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Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

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