Intrinsic Value Scatec ASA (0R3I.L)

• Previous Close: £115.85
• Intrinsic Value: £31.24
• Upside potential: -73%

Stock Valuation Context

Business Model And Market Position

Scatec ASA is a global renewable power producer specializing in solar, wind, and hydro power plants, alongside energy storage solutions. The company operates across three segments: Power Production, Services, and Development and Construction, ensuring a vertically integrated approach from project inception to long-term operation. With 15 GW of capacity in operation or under construction, Scatec has established itself as a key player in the renewable utilities sector, leveraging its expertise in engineering, procurement, and asset management to secure stable cash flows and scalable growth. The company’s diversified geographic footprint mitigates regional risks while capitalizing on global decarbonization trends. Scatec’s market position is reinforced by its ability to deliver end-to-end renewable energy solutions, catering to both developed and emerging markets. Its focus on utility-scale projects and partnerships with governments and private entities underscores its competitive edge in a rapidly evolving energy landscape.

Revenue Profitability And Efficiency

Scatec reported revenue of NOK 3.4 billion for the period, with net income of NOK 628 million, reflecting a solid profitability margin. The company’s operating cash flow of NOK 3.1 billion highlights efficient cash generation, though capital expenditures of NOK -3.3 billion indicate significant reinvestment into growth projects. This balance underscores Scatec’s focus on scaling its renewable energy portfolio while maintaining financial discipline.

Earnings Power And Capital Efficiency

Scatec’s diluted EPS of NOK 3.95 demonstrates its earnings capability, supported by a robust project pipeline and operational assets. The company’s capital efficiency is evident in its ability to deploy substantial capex (NOK 3.3 billion) while sustaining positive cash flows, aligning with its long-term strategy to expand renewable energy capacity and enhance returns on invested capital.

Balance Sheet And Financial Health

Scatec’s balance sheet shows NOK 3.9 billion in cash and equivalents, providing liquidity for near-term obligations. However, total debt of NOK 28.2 billion reflects the capital-intensive nature of renewable energy projects. The company’s financial health hinges on its ability to manage leverage while funding growth, supported by stable cash flows from operational assets.

Growth Trends And Dividend Policy

Scatec’s growth is driven by its 15 GW pipeline, with a focus on expanding solar, wind, and storage solutions globally. The company currently does not pay dividends, prioritizing reinvestment into high-return projects. This aligns with its growth-oriented strategy and the sector’s capital demands for scaling renewable infrastructure.

Valuation And Market Expectations

With a market cap of NOK 11.3 billion and a beta of 1.66, Scatec is viewed as a higher-risk, growth-oriented play in renewable utilities. Investors likely price in its expansion potential and exposure to volatile energy markets, balancing near-term capex pressures against long-term decarbonization tailwinds.

Strategic Advantages And Outlook

Scatec’s integrated business model and global project pipeline position it well for the energy transition. Its expertise in development, construction, and operation provides a competitive moat, while partnerships and government support enhance scalability. The outlook remains positive, contingent on execution and capital allocation efficiency in a rapidly growing sector.

Sources

Company filings, market data