Ferronordic: Earnings hold up much better than expected - ABG

Adj. EBIT SEK 130m (+65% vs. ABGSCe 79m)
Still looking to divest Russian business
1.3-4.8x ’22e-’23e EV/EBIT (adj.) on pre-Q3 estimates


Q3 outcome

Sales were SEK 1,479m (15% vs.ABGSCe 1,287m), and the gross margin was 24.7% (ABGSCe 21.1%), mainly on the revenue mix in Russia/CIS, where the higher-margin aftermarket and contracting services segments amounted to 76% (39%) of sales. This, combined with bigger than expected opex cuts, resulted in an adj. EBIT of SEK 130m (+65% vs. ABGSCe 79m), for a margin of 8.8% (ABGSCe 6.1%), which included the positive one-off from the VCE payment of SEK 321m, meaning reported EBIT was SEK 451m (+13% vs. ABGSCe 400m).

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/ferronordic/Equity-research/2022/11/ferronordic---earnings-hold-up-much-better-than-expected/