MT Højgaard Holding: A weakish quarter in a strong year - ABG

Unchanged estimates ahead of Q2’22

We forecast sales and EBIT of DKK 1.9bn and DKK 31m

Fair value range DKK 125 – 255 (140 – 270)

We expect reiterated guidance
With this report we change lead analyst, but our estimates are unchanged ahead of the MTHH earnings release on 25 August. We forecast the company to report revenues and EBIT before special items of DKK 1,917m and DKK 31m, respectively, making this a relatively weak quarter in a H2-loaded fiscal year for MTHH. While no major large orders have been announced during Q2’22 (stronger momentum seen so far in Q3’22) we are looking for an underlying order development to the tune of DKK 1,345m, partly supported by the Group’s DKK 3.5 stock (end of Q1) of won-but-not-yet-contracted orders. We expect management to maintain its full year financial guidance and to continue to highlight the benefits of its strategy of focusing on partnerships and phased projects.

Construction employment strong heading into Q3’22
Although the operating environment is tough and the number of bankruptcies has been significantly above average during Q2, we note that most redundant personnel have been rapidly been absorbed by other players in the market, suggesting continued good activity going into Q3. Moreover, because prices on some materials like steel and wood have come down, some public contracts that were cancelled during the year due to building costs might come into play again, although we view this as speculative, in particular as prices for energy-dependent materials such as cement are more likely to increase than decline in the near-to-medium term.

Fair value range adjusted to DKK 125 - 255 Due to negative movements in peer group valuation multiples, our fair value range is adjusted to DKK 125 – 255 from DKK 140 – 270.
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