Q1 proportionate energy output increased slightly by 2% yoy to 29 GWh despite the sale of its CHP plant in Puerto Rico at the end of last year (6-7 GWh impact). Mexico and El Salvaor on the other hand show strong operational developments, overcompensating for that. As a result, proportionate group sales in Q1 stood at $ 2.9m ($ +0.1m yoy).
The goup's consolidated EBIT turned positive at $ 0.1m, a significant improvement compared to last year's $ 0.4m loss. This is mainly due to cost-cutting measures (e.g. reduced headcount) bearing fruit.
Sale of Colombian assets progressing. As highlighted during the Q4 earnings call, MPCES initiated the sales process of its two Colombian operational projects (39MW) due to the challenging situation in that region, triggering significant expenses to guarantee the safety of employees. Conservatively assuming a certain discount to the book value ($ 17m), MPCES should be able to receive some $ 15m, eNuW.
Reduced development efforts. With the sale of a Colombian development project in Q1, the pipeline now consists of two projects with a total capacity of 90MW. At the current development projects, MPCES should be able to receive roughly $ 40k per MW.
Guatemala project to begin producing electricity in July. In February 2024, MPCES begun construction of its 66MW PV project in Guatemala. The mechanical completion is expected to take place in May, followed by the grid connection at the end of June. While the company initially planned to sell a 49% stake to a co-investor, management decided to keep full ownership of the project, which is expected to generate annualized sales of $ 8m with an 80% EBITDA margin, roughly doubling its production portfolio (in terms of GWh).
No liquidity concerns. Thanks to the pending inflows from the sold development project and the two Colombian assets that are expected to be sold this year, MPCES should be well capitalized. In fact, management confirmed to plans to redistribute cash to shareholders once it becomes available.
We confirm our BUY rating with an unchanged NOK 15.5 PT (old: NOK 14) based on sum-of-the-parts (SOTP) valuation, separately accounting for the value of its current IPP portfolio (NPV) and its development backlog (multiple). This is largely inline with a 20% discount to the projects' book values (page 2).
ISIN: NL0015268814
