Norwegian Aker ASA has recently succeeded in spinning off parts of its business and listing them on the stock exchange. Aker Horizons (Company presentation) is the latest of these ventures.
This time, an investment company has been spun off from the parent company, which actively develops its own portfolio companies with the help of Aker’s long experience and synergy benefits. The company focuses on businesses related to renewable energy sources and the reduction of greenhouse gas emissions. Planet-positive investing.
The current portfolio includes both more familiar listed companies and unlisted companies; the sum of the parts looks quite good:
The story, simplified, is to buy and develop companies. And at some point, to take an exit either in the form of (partial) listing or selling. As described in the presentation slide, the next step would be to list Aker Clean Hydrogen and Mainstream:
Other Aker-spun projects have gotten off to a good start on the stock exchange, and now a separate company has been established for operations. I will follow this story with interest.
I wonder if people have learned a bit from the Clean Hydrogen IPO after Everfuel and Horizont Energy, or if we’ll see another start with hundreds of percent.
I already posted this in the energy thread, but Clarksons Platou Securities started following Horisont today. Buy recommendation and target price 62 NOK.
Aker Offshore Wind made progress in its portfolio of development projects and prospects during the fourth quarter, as the company also took steps to strengthen its competitive position in the floating wind industry.
Aker Offshore Wind saw its portfolio develop favorably during the final three months of 2020, supported by operational developments in the consortia the company is part of. The company is currently part of projects or prospects in the following four countries: Norway, Scotland, South Korea and the US.
“We are pleased to have made progress across our portfolio during the fourth quarter,” said Astrid Skarheim Onsum, Chief Executive Officer of Aker Offshore Wind. “The activities related to developing the portfolio and the organization are progressing according to plan, which is also reflected in the reported financial figures.”
Aker Offshore Wind seeks to enter partnerships and collaboration to realise its goal of reducing LCoE (levelized cost of energy) in offshore deepwater wind power production.
During the fourth quarter, Aker Offshore Wind increased its ownership in Principle Power Inc (PPI) to about 47 percent. Aker Offshore Wind will look to actively support PPI to accelerate the industrialization of floating wind.
Financial results and outlook
Revenue for the quarter was NOK 1.5 million and EBITDA (Earnings before interest, tax, depreciation and amortisation) was negative NOK 45.3 million. The cash balance at the end of the quarter was NOK 474.5 million.
Aker Offshore Wind expects to make further progress on its portfolio of projects and prospects during 2021. The company is currently in the process of preparing bids for the offshore wind processes in Norway and Scotland, which are expected to be submitted in 2021.
After the end of the fourth quarter, Aker Offshore Wind entered into a cooperation agreement with Statkraft, Europe’s largest producer of renewable energy, to explore possibilities for collaboration on offshore wind power projects on the Norwegian Continental Shelf.
Nothing new or groundbreaking, development continues. 2021 priorities from the Q4 2020 webcast:
{“content”:“A really interesting package, I’m in. It gives a nice feeling to own so many interesting companies in one package. Maybe one of them will be a future winner?”,“target_locale”:“en”}
On the IPO day, I tried to calculate what we’re paying for the “empty” part of the glass, meaning how much of a premium there is in the share price (Aker Offshore Wind mcap0.51 + Carbon capture0.51 + Mainstream*0.75). I got quite a bit of premium as a result. Or alternatively, value for the other companies in the portfolio.
The challenge is that it’s quite difficult to determine the value of those unlisted parts. For Mainstream, there was at least a transaction price of €900M as a basis, and for REC, it’s also available. The others you just have to guess. On the other hand, the market probably does that for everyone every day.
I personally view this mainly as a dwarf ETF with a dividend yield, and above all, I wanted to see if there would be a similar price spike as in almost all Norwegian green stocks 1-3 months after the IPO
If Horizon owns around 50% of the companies, meaning 50% of the shares, then it is the majority owner and dictates how the company is developed and how funds are distributed. Additionally, when the market value has risen high, divesting from the company at a good price brings in cold hard cash.
My biggest question is whether the company will find new targets in the long run, as it divests from current ones. There’s currently a boom in green companies, but when the situation evens out, new targets might not be found “on a silver platter.”
I’ve been thinking the same thing myself. The company is very interesting, but there aren’t really any fundamental numbers available to start evaluating whether the market value is cheap/expensive more closely.
I calculated the market cap vs. listed shares. I came to pretty much the same conclusion. You don’t need to assign much value to that start-up portfolio…
Last night, I was also thinking about this “sum of the parts” and Aker Horizon’s market value, which at the latest closing price is 18.0265 B NOK.
Horizon’s listed holdings: Aker Offshore Wind (51%) = 2.11191 B NOK Aker Carbon Capture (51%) = 4.33041 B NOK Aker Clean Hydrogen (74-77%) = 6.598125 B NOK REC Silicon (24.7%) = 1.489163 B NOK
Value of listed holdings ~ 14.53 B NOK
Unlisted parts: 6.75B + Rainpower, assuming Mainstream’s + SuperNode’s market value is the purchase price paid by Horizon. Mainstream Renewable Power (75%)? Rainpower 100% =? SuperNode 50% =?
“Sum of the parts” = 14.53 + 6.75 = 21.28B NOK ~ 36.64 NOK per share at yesterday’s closing prices. However, take these figures with a grain of salt, as I have not verified them.
