<a id="bm-comp-3709ea5c-f8f4-454c-8298-26228dfbdc4f" name="bm-comp-3709ea5c-f8f4-454c-8298-26228dfbdc4f" class="BMCustomAnchor"></a><table><tr><td bm-component-id="3709ea5c-f8f4-454c-8298-26228dfbdc4f" style="vertical-align: top; width:100.000000%;"><ul><li>Q3 weak but it's a small quarter for '24e</li><li>Estimates for Pome divestment pushed to '25e from '24e</li><li>Sales processes for Ölme (73MW) and Pienava (158 MW) initiated</li></ul></td></tr></table><a id="bm-comp-d4de4525-28ca-4343-b885-0901b44d55ba" name="bm-comp-d4de4525-28ca-4343-b885-0901b44d55ba" class="BMCustomAnchor"></a><table><tr><td bm-component-id="d4de4525-28ca-4343-b885-0901b44d55ba" style="vertical-align: top; width:100.000000%;"><h3 class="bm-h3">Q3, small quarter for '24e</h3><p>Eolus had Q3 sales of SEK 24m, -8% y-o-y and EBIT of SEK -94m (vs. SEK 159m in Q3'23). EBIT was hurt by write-downs of SEK 40m related to the Skidbladner (1,000 MW) and Arkona (1,200 MW) off-shore projects. The lower sales and EBIT were partly due to Eolus only recognising revenues from one project, Stor-Skälsjön (9% revenue recognition), and no projects being sold during the quarter. However, it is important to note that Q3 is a small quarter for '24e, and we expect a major project milestone to be booked in Q4. Read press release <a href="https://www.eolus.com/en/blog/mfn_news/eolus-has-received-substantial-milestone-payment-for-us-solar-and-battery-project/" target="_blank">here</a>.</p><h3 class="bm-h3">Pome divestment moved to '25e</h3><p>In its Q3 report, Eolus announced that the US battery project, Pome, has been delayed and is now expected to be sold in the coming months. We therefore move the Pome divestment from '24e to '25e (~SEK -200m EBIT in '24e, ~SEK +200m in '25e). We also lower project margins for Stor-Skälsjön (~SEK -100m in '24e). Finally, we make several small adjustments to projects in the late-stage portfolio. All in all, for '24e-'26e our aggregated EBIT estimates come down by ~SEK 140m. Looking ahead, the company announced that it has initiated the sales process for the onshore wind/solar project Ölme (73 MW), and the onshore wind project Pienava (158 MW). We find it positive that the company is moving forward with projects in its portfolio despite the recent market softness.</p><h3 class="bm-h3">Near-term margin risks</h3><p>The share is currently trading at '24e-'26e P/Es of 4-3x and EV/EBITs of 8x-3x, with the low multiples partly explained by the company's volatile historic earnings trend and the perceived risk level in future project sales. In its Q3 report, Eolus highlighted that it has noticed increased ROI requirements among investors. This, coupled with a visible short-term market softness, increases risk for near-term project margins.</p></td></tr></table>