Boreo: Profitability remained at a good level despite soft top line - Nordea

Boreo reported Q2 adjusted EBIT ex-PPA of EUR 2.4m, 31% above our estimate and 20% above Refinitiv consensus. Net sales of EUR 42.3m grew 5% y/y (-4% on organic basis) and came 3% below our estimate and 6% below consensus. Reported EBIT was EUR 1.7m, 19% above our estimate. Net sales and adjusted EBIT ex-PPA increased in all business areas, expect Heavy Machines. Operational cash flow was EUR 3.9m in Q2 (EUR -1.9m a year ago, including discontinued operations), supported by working capital release from SANY business. EPS of EUR 0.18 came above our expectation of EUR 0.16. In line with its guidance policy, the company does not provide short-term financial guidance.

The company notes challenging business environment, while orderbooks remain at a good level and the company expects to continue on the path of an annual earnings growth of at least 15% in the future. In addition, the company aims to reduce its working capital from EUR 31m towards EUR 25m sustainable level during H2.

Despite adjusted EBIT beat, we expect consensus to make only limited positive estimate revisions due to somewhat soft top line development.

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