MT Højgaard Holding: Downscales international activities and cuts guidance - ABG

Continued underperformance in Greenland triggers downgrade
Strategic process for MTH International initiated
Call with management Monday at 8:30 (CET)

Earnings guidance cut by DKK 100m. Revenue outlook unchangedIn 2022 MTHH's International division (~7-8% of group sales) posted a loss of DKK 37m (following a meagre result in 2021 as well) and in Q1'23 the division was an even stronger drag on earnings with a loss of DKK 19m. At the Q1'23 conference call, management stated that the company's FY'23 guidance hinged on the company being able to mitigate the negative impact from three underperforming fixed-priced (not cost-indexed) contracts in Greenland. On Friday MT Højgaard Holding (MTHH) downgraded its FY'23 earnings guidance by DKK 100m from DKK 300 - 325m to DKK 200 - 225m which suggests that this has not been the case and the downgrade may be further impacted by restructuring costs, we speculate (see below). The company will provide additional details on a conference call Monday morning (details below). A troubled division... At the same time, the company also announced that the Board of Directors has decided to initiate a strategic process for the troubled MT Højgaard International unit which comprises the companies activities in Greenland, the Faroe Islands, the Maldives as well as Africa through its 60% ownership in the Portuguese company SETH...that clouds the performance of the Core Danish business Alongside Friday's announcement, the company also stated that the core Danish activities (~88% of group revenues) have continued to demonstrate good performance in Q2'23 and have expectations through the month of May, driven by particular strong development in MTH Denmark.
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