Freemelt: A lull in orders in Q1 - ABG

No new orders in Q1, one new order in Q2
Quarterly goodwill amortisation to double: SEK 6m to SEK 12m
Maintain long-term outlook, fair value range of SEK 10-20


Q1e: negligible revenue, but Q2 already looking better

For Q1e, we only expect sales of SEK 0.3m, as no new orders were received in the period. However, after Q1, the company received a new Freemelt ONE order from a US university, and this will be delivered in Q2. We estimate Q1 EBIT of SEK -26.5m, of which SEK -11.9m goodwill amortisation, as Freemelt recently announced that it was doubling the rate at which goodwill would be amortised (from 10 to 5 years). This means all current goodwill will be amortised by '26e. The change will be retroactively applied from FY'22, thus affecting '22 results negatively. The change has no effect on cash flow.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/Freemelt/Equity-research/2023/4/freemelt---a-lull-in-orders-in-q1/