Original-Research: MPC Energy Solutions N.V. (von NuWays AG): Buy

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Original-Research: MPC Energy Solutions N.V. - from NuWays AG

05.03.2025 / 09:00 CET/CEST

Dissemination of a Research, transmitted by EQS News - a service of EQS

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Classification of NuWays AG to MPC Energy Solutions N.V.

Company Name: MPC Energy Solutions N.V.

ISIN: NL0015268814

Reason for the research: Update

Recommendation: Buy

from: 05.03.2025

Target price: NOK 14.00

Target price on sight of: 12 months

Last rating change:

Analyst: Christian Sandherr

Q4 prelims paint a mixed picture; chg. est.

FY24 ahead of sales guidance. MPCES ended FY24 with a strong Q4, which put

the company ahead of its initial guidance, particularly driven by the plants

in El Salvador and Mexico. FY24 proportionate energy output increased by 31%

yoy to 116 GWh. Carried by improved electricity prices, proportionate sales

rose by 42% yoy to $ 12.8m. EBITDA's increase of 79% yoy to $ 7.9m was

supported by the improved top-line but also by managements successful cost

cutting efforts (overhead costs -30% yoy).

Impairments weigh of results. Reported group EBIT stood at $ -13.3m as a

result of $ 12.9m impairments, mainly stemming from the divestment in Puerto

Rico ($ 5.1m), a correction of a JV investment value in Colombia ($ 4.5m),

and a convertible note issued by a US microgrid developer ($ 1.7m). Adjusted

for those, EBIT would have come in at a $ 400k loss, a significant

improvement compared to previous year's $ 4.8m loss.

Colombia is an increasingly challenging market due to an alarming surge in

violence as conflicts between armed groups intensify. As a result, MPCES has

to hire private security personal to guarantee the protection of its staff.

This significantly weighs on the profitability of its two PV plants, Los

Girasoles and Planeta Rica. We hence also reflect lower margin estimates for

both projects in our model.

Rightsized portfolio. As previously communicated, management has further

rightsized its portfolio by selling the CHP project in Puerto Rico. While

the company was able to recover some $ 4m, the impairment related to the

project amounts to $ 5.1m. The current production portfolio now consists out

of four operational projects and one under construction (San Patricio, 65 MW

PV), which should become operational at the beginning of H2. In light of the

currently challenging situation in Colombia, which heavily impacts IRRs of

projects, we would not only expect the company to halt new developments in

that region (one project was sold) but also consider a sale of its two

operational assets (39 MW).

Slowed development efforts. With MPCES having notably reduced overhead costs

and having sold a development projects, the company is seen to have also

slowed general development efforts, ultimately reducing the pipeline. During

the earnings call, the CFO mentioned an early stage pipeline of roughly 200

MW, which is in line with our previous estimates of 186 MW.

Positive 2025 guidance. For FY25, management expects proportionate sales of

$12-13m (eNuW: $ 14m) and proportionate EBITDA of $ 9-9.5m (eNuW: $ 9.9m).

While this is below our estimates, it is important to note that the guidance

does not reflect any contribution from MPCES' Colombian plants as they are

up for sale (not yet excluded from eNuW). Hence, the longer the sale takes,

the higher the upside to the company's FY25 guidance.

Guatemala project progressing as planned. The construction of its 65MW PV

project, which begun at the end of February 2024, is in its final stages.

One third of the modules have already been installed. While MPCES has not

yet signed a co-investor (49% stake of the project), we expect this to

happen in due course. 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 rating but reduce our PT to NOK 14 (old: NOK 20) 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/31899.pdf

For additional information visit our website:

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Web: www.nuways-ag.com

Email: research@nuways-ag.com

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Diese Meldung ist keine Anlageberatung oder Aufforderung zum Abschluss

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Offenlegung möglicher Interessenskonflikte nach § 85 WpHG beim oben

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2095423 05.03.2025 CET/CEST

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