Arise: Price Heads South, Fundamentals Head North – A Few Charts

The share price of the Swedish windpower company Arise indicates a struggling company. arise kurs

However, the balance sheet is solid after the recent refinancing and the pricing fundamentals have improved significantly this last year, especially since the start of the year. The combination of electricity prices (first graph below) + e-certificate prices (next two graphs) are now consistently above the 500 SEK/MWh range. A level we haven’t seen for the last three years. Finally “in the money”-territory on an allin basis, not just on a cash flow basis as has been the case in recent years. I believe break-even (e-spot + e-certificates) is now around 400 SEK/MWh if we include the recent impairments.


March was particularly cold and was probably an outlier. The price has come down and settled at 400 SEK/MWh for April (still way above previous years: April 2017: 280 SEK/MWh, April 2016: 200 SEK/MWh, April 2015: 240 SEK/MWh).

E-certificate prices have risen sharply in the last few weeks:


Screen Shot 2018-04-30 at 10.46.54

Much of this has to do with rising coal prices (and CO2 emission pricing has an impact on this which is why I include a graph of that as well).



The story has changed but the price hasn’t reflected this change, yet!

4 thoughts on “Arise: Price Heads South, Fundamentals Head North – A Few Charts

  1. My problem with arise is that it’s largely a commodity bet for the price of electricity. How do you forecast the electricity price for the future e.g. Based on the large amount of snow in the Nordics which will keep the reserves as well as the ground water level High in the spring and summer? Is their any operational aspects in the company that makes it better compared to its peers with the exception of more owned power plants? (which is good during electricity price inclines)


    1. Yeah, water level reserves is one indicator in the short term, which is about average for the time of year currently. I think coal prices is the more significant one though as it is the lowest cost all other energy sources are measured against. I personally believe CO emission prices will be significant in that regard and that they will be going higher as the already apparent ice melting issues force governments to hurry the transition away from coal.

      But yea, a very tough commodity to predict for the longer haul. My article here was simply a commentary on short term price movements that are out of whack.

      I don’t believe Arise is better than peers operationally. But they are priced at half book value while the other listed Swedish company Eolus is priced at a little over 1,0. The difference is that Arise is more leveraged because they own more wind farms while Eolus is asset light and make more project sales. But as prices increase leverage suddenly becomes an advantage instead of the disadvantage that it is priced as so Arise ought to follow the price moces more closely than Eolus which hasn’t been the case lately.


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