Research: Industrials
ABO Energy reported strong financial results for FY23, as revenue grew by 29% y-o-y to €300m and net profit increased by 11% to €27.3m. Revenue growth was partially driven by a substantial increase in billed construction services, which totalled €154.6m, up from €96.2m the previous year. Additionally, management has proposed a 11% increase in the dividend to €0.60 per share.
ABO Energy |
Global growth generates record net profit
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Renewable energy |
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17 April 2024 |
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ABO Energy reported strong financial results for FY23, as revenue grew by 29% y-o-y to €300m and net profit increased by 11% to €27.3m. Revenue growth was partially driven by a substantial increase in billed construction services, which totalled €154.6m, up from €96.2m the previous year. Additionally, management has proposed a 11% increase in the dividend to €0.60 per share.
Accelerating growth
ABO Energy’s pipeline consists of around 900 projects, with a nominal total capacity of 23.1GW (65% wind, 30% solar, 25% battery), under development or construction in 16 countries. Significant progress in its growth strategy was achieved during the year, with the company winning a recent tariff tender in France for four wind farms with a combined capacity of 57.5MW. It also won bids for four solar parks and two wind farms in Germany with a total capacity of 50MW and 22MW, respectively. The company continued to diversify its global portfolio, both in terms of technology and geography, through the development of solar projects in Colombia and Hungary, with a combined capacity of 10MW and 90MW, respectively.
Navigating the volatile power price environment
ABO Energy is taking steps to navigate the volatile power price market by securing power purchase agreements (PPAs) with its offtakers. For example, a French industrial company has secured the electricity from one of ABO Energy’s solar farms currently under construction. ABO Energy has also signed PPAs with a US internet company for the nearly commissioned Finnish 30MW wind farm and 50MW Spanish solar park, currently under construction. These two projects will supply roughly 100GWh of renewable energy per year over a 10-year period.
Valuation: Undervalued based on consensus
Consensus forecasts indicate steady growth over the coming years both in revenue and net income, which is in line with management guidance. Management has stated that it expects to see significant growth in the coming years, aiming for net PBT of €50m in the medium term. ABO Energy’s consensus P/E ratio for FY24e is 18.5x, broadly in line with the average of its peer group. Consensus also sees ABO Energy’s stock price as undervalued, with the average target price almost double the price at which it currently trades.
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Consensus estimates
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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Research: TMT
Next 15 Group’s net revenues grew 2.5% in the year to January, despite difficult markets. Adjusted operating margin rose from 20.2% to 21.0%, helped by head office cost savings. In common with much of the sector, spending by tech clients was soft, down 17% like-for-like. The group did well, though, in growing spend from non-tech clients, up 11%, making for a strong overall performance in a market beset by ongoing macro uncertainty. Next 15 has been building its AI capabilities for some time and this is now starting to show in efficiency and margin. It has the balance sheet strength to keep investing here, internally and through M&A, which should stand it in good stead as client confidence improves.