Ferronordic - Prel. April figures for Russia released - ABG

Q1 above expectations, outlook in Russia still poor Prel. April revenue and selected BS items released Company says Germany will reach positive EBIT in ’22 Q1 outcome Sales were SEK 1,746m (+22% vs. ABGSCe 1,434m), up 38% y-o-y. The gross profit was SEK 300m (+21% vs. ABGSCe 248m) and EBIT was 108m (+36% vs. ABGSCe 79m) and included no NRIs (we had not expected any), resulting in an EBIT margin of 6.2% (ABGSCe 5.5%). Net profit was SEK 63m (+19% vs. ABGSCe 53m). The company also released preliminary April estimates for selected balance sheet items and revenue in Russia. Revenue was SEK 375m (41% of our Q2’22e Russia/CIS estimate). Also, inventory in Russia as of April was SEK 892m, meaning that at 20% gross margin there is ~SEK 1.1bn left in potential equipment and aftermarket sales in inventory (ABGSCe Q2’22e-Q4’22e equipment and aftermarket revenues for Russia/CIS is SEK 1.1bn). To our understanding, there are also smaller suppliers that continue deliveries to Russia, so operations can still continue in a more limited capacity once this inventory dries up. We estimate currently active suppliers are ~10% of Russia sales (not confirmed by the company). Estimate changes We do not expect significant consensus revisions following the report, despite the higher EBIT, as Russian operations still risk tapering off in the coming years if Volvo does not return to the country. Also, the remaining inventory figures released were roughly in line with our expectations. Final thoughts and conf call details The share is down 89% YTD, as sanctions have had a severe effect on operations in Russia. Most important now, in our view, is that Germany had a solid quarter and was 22% above our expectations on sales, as well as management saying they expect Germany to reach positive EBIT in ’22e (ABGSCe 11m). Finally, the company will host a conference call at 10:00 CET, dial-in SE: +46856642704, UK: +443333009260. The presentation can also be viewed via livestream at: https://tv.streamfabriken. ... Läs mer på ABG Sundal Collier

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