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Original-Research: MPCES Energy Solutions N.V. - from NuWays AG
01.11.2024 / 09:01 CET/CEST
Dissemination of a Research, transmitted by EQS News - a service of EQS
Group AG.
The issuer is solely responsible for the content of this research. The
result of this research does not constitute investment advice or an
invitation to conclude certain stock exchange transactions.
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Classification of NuWays AG to MPCES Energy Solutions N.V.
Company Name: MPCES Energy Solutions N.V.
ISIN: NL0015268814
Reason for the research: Update
Recommendation: Buy
from: 01.11.2024
Target price: NOK 20.00
Target price on sight of: 12 months
Last rating change:
Analyst: Christian Sandherr
Strong op. progress, impairments weighing on consolidated P&L; chg. est.
Q3 proportionate sales increased by some 29% yoy to $ 3.6m as the group's
energy output increased to 30.7 GWh driven by the ramp up of the company's
production portfolio but also higher energy prices at its El Salvador sites.
As a result, the proportionate EBITDA strongly increased to $ 2.6m, a 72%
margin (+126% yoy). Thanks to the group's tight cost control (-30% overhead
costs yoy), the consolidated EBITDA turned positive at $ 1.4m.
While the 9M consolidated EBIT figure was still negative at $ 1.4m, this was
mainly due to impairments to the tune of $ 1.35m. This should provide
investors with confidence that the consolidated EBIT is seen to turn
positive in FY25e, also partially carried by the San patricio project
turning operational.
Furter portfolio adjustments looming. As already visible during Q2, MPCES'
CHP plant in Puerto Rico was not producing any electricity in Q3 due to the
absence of demand from the offtaker, which is undergoing a long-term
restructuring of its manufacturing site and business. As a result, MPCES has
impaired some $ 0.8m of the project's book value and has put the project up
for sale. Taking into account the offtaker's financial situation, we would
expect the sales to take place at a notable discount (~ 50%) to the
remaining book value of $ 8.3m. We expect the sale to be signed at the end
of Q1/early Q1.
Further, MPCES decided to discontinue three development projects due to a
low likelihood of ultimately running them at internally required IRRs. While
the company has recorded impairments for two projects (Acacia and
Matarredonda), we expect the company to be able to sell the third one
(Pacande) at or above the book value of roughly $ 0.8m, eNuW.
Liquidity no reason for concern. While the free cash (excl. cash in project
companies and cash deposited as collateral to secure project-related bank
guarantees) stood at only $ 1.6m at the end of Oct., this figure should
strongly increased towards the end of the year (eNuW + $4-4.5m) due to the
imminent sale of the CHP plant and the Pacande development project. On top,
MPCES is still pursuing farm downs of several project, which are currently
running inefficient funding structures (i.e. 100% equity).
Guatemala project progressing as planned. The construction of its 65MW PV
project, which begun at the end of February, is progressing as planned and
reached 50% completion. Installation of modules shoud begin shortly. 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, which was also confirmed by
management during the earnings call. 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.
We confirm our BUY ratin with a new NOK 20 PT (old: NOK 23) based on based
on sum-of-the-parts (SOTP) valuation, separately accounting for the value of
its current IPP portfolio (NPV) and its development backlog (multiple).
You can download the research here: http://www.more-ir.de/d/31155.pdf
For additional information visit our website: www.nuways-ag.com/research
Contact for questions:
NuWays AG - Equity Research
Web: www.nuways-ag.com
Email: research@nuways-ag.com
LinkedIn: https://www.linkedin.com/company/nuwaysag
Adresse: Mittelweg 16-17, 20148 Hamburg, Germany
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Diese Meldung ist keine Anlageberatung oder Aufforderung zum Abschluss
bestimmter Börsengeschäfte.
Offenlegung möglicher Interessenskonflikte nach § 85 WpHG beim oben
analysierten Unternehmen befinden sich in der vollständigen Analyse.
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2020519 01.11.2024 CET/CEST
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