Novavis Group: Clear Earnings Growth on the Horizon as Photovoltaic Farm Projects Show Promising Potential
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Clear earnings growth on horizon
Novavis Group is a company that prepares photovoltaic farm projects for construction (from leasing land, through permits and acquiring grid connection) and has a portfolio of projects with a total capacity of 583MW. After acquiring the necessary permits and connection conditions, taking into account current prices for a ready-to-build project (EUR 140-180tsd), the value of the portfolio will increase to PLN 360-470mn.
Novavis, as part of its ongoing projects, is working with Spain’s Iberdrola to deliver 425MW ready-to-build photovoltaic farms (with an estimated value of PLN ~180mn).
Given the expected timetable for obtaining project connections and further milestones in late 2023/2024, we assume a marked improvement in sales and financial performance. Current forecasts by the Institute of Renewable Energy call for an increase in photovoltaic capacity in Poland from 13.6GW to 26.8GW in 2025.
The development of RES so far supported by prosumers in the next few years will be the beneficiary of European Union regulations (RePowerEU, FIT55, CBAM). As a result, large professional photovoltaic farms will be the fastest-growing source of energy from the sun. The forecasts translate into increased demand for the ready-to-build photovoltaic farm projects that Novavis is developing. With improved financial performance, we expect Novavis to pay its first profit dividend to shareholders in 2024. We are initiating coverage of Novavis Group with a Buy rating and a target price of PLN 3.89/share.
