Arise (ARISE) Q3 2024 earnings summary

Executive summary

• Net sales for Q3 2024 rose to SEK 105 million (MSEK 105), up from SEK 96 million year-over-year, driven by revenue recognition from the Kölvallen project and portfolio growth.

• Profit after tax increased to SEK 63 million (MSEK 63) from SEK 35 million, with EPS at SEK 1.55 (0.84), positively impacted by deferred tax recognition.

• EBITDA reached SEK 55 million, EBIT SEK 33 million, both down year-over-year.

• The development portfolio expanded by 200 MW in the quarter, with 155 MW added to late-stage, and a total portfolio now at 8.1 GW.

• The first energy storage project, Pajkölen BESS (40 MW), was sold, generating SEK 50 million at closing, with further payments and earn-outs tied to grid connection and performance.

Financial highlights

• Operating cash flow improved to SEK 43 million from -SEK 47 million; cash flow after investments was -SEK 8 million, up from -SEK 231 million.

• Own production generated 66 GWh at SEK 469/MWh, down from SEK 718/MWh last year due to lower wind speeds and market prices.

• Net debt at period end was SEK 395 million, with cash and equivalents at SEK 762 million.

• Equity/assets ratio stood at 56%.

• Dividend of SEK 51 million paid and share buybacks of SEK 110 million executed in the first nine months.

Outlook and guidance

• Management expects continued portfolio growth and further BESS transactions in the next 1-2 years.

• Project valuations are anticipated to improve due to falling interest rates and reduced project supply.

• Short-term power prices are expected to rise entering winter, with bullish sentiment if colder weather materializes.

• Upside potential in Nordic power prices due to a persistent gap with continental Europe.

• Hedging will be considered if SE4 prices reach EUR 60/MWh and SE3 EUR 50/MWh, with a stepwise approach.