Intermoney | Acciona (Buy, TP 200 euros/share) has won the contract to build and maintain a waste treatment and energy generation plant in north London, with an investment of 800 million euros. The new installation will have the capacity to treat 700,000 tonnes, as well as to supply electricty and heating to 50,000 homes. The plant will be able to treat up to 135 tonnes of recyclable material and it should be operational in 2025. It is not the first contract of this kind Acciona has been awarded in the UK. In 2019, it won the tender to build a slightly smaller plant (400 million euros) in Scotland.
Valuation: This is yet another example of the fact that renewable energy is not Grupo Acciona’s only business. It is also involved in other value-added activities, one of which groups together the whole water cycle. Until June this year, the firm’s water business generated EBITDA of 44 million euros, up 6% from a year earlier. Meanwhile the construction and concessions activities registered 75 million euros of EBITDA , tripling the figure to June 2020. Whatsmore, we expect these divisions, particularly construction, to see their margins expand in the coming years. Finally, the group’s Other Activities, including Bestinver and the property business, recorded EBITDA of 29 million euros in H1’21 (up 21%). That said the renewables business was the most relevant, contributing EBITDA of 501 million euros (up 18%). The Water division had a portfolio of almost 6.1 billion euros at end-Q2’21.