MT Højgaard Holding: Stronger order book in a tougher environment - ABG

Forecasts for 2023-24e lowered by ~1% Record order book, partnerships have lowered risk Fair value adjusted to DKK 120-250 (125-255)

2022e forecast revisions reflect changed outlook Following MT Højgaard Holding’s Q2’22 earnings report, we raise our 2022e sales forecast by 5% while lowering EBIT by 23%. Our 2023e and 2024e estimates are lowered by ~1%, which prompts an adjustment of our fair value range to DKK 120-250 from DKK 125-255. Our forecast revisions for FY’22e largely reflect the company’s revised guidance, where sales expectations are raised by 5% following a very strong Q2 order intake of 3.4bn (+14%) while earnings are negatively impacted by raw material delays at Scandi Byg pushing planned project starts into early 2023, as well as COVID-19 delays in Portugal and costs related to the clearing up of projects in Greenland and the Faroe Islands, with the latter operations being phased out over the next couple of years.

Partnerships in focus as clouds loom over industry The strong order intake boosted the company’s order book to a record high of DKK 12bn at the end of Q2’22. E&P (newbuilds, refurbishments and building) comprises 50% of the orderbook while MTH Denmark (Infrastructure) comprises 36%. We note that 45% of the order intake in H1’22 was generated through the company’s strategic partnership agreements, while in Q3’22, additional contracts valued at DKK 1.8bn were awarded by DSB (Danish railways, one of the strategic partners), validating the company’s partnership strategy. According to management, the contracts under the company’s partnership agreement de facto carry a lower risk and have lowered the company’s overall contract risk. While the proof is still in the pudding, the combination of overall lower risk combined with a record order book should, all else equal, prove advantageous to the company as it heads into what appears to be a challenging 2023 for the industry.

Strong quarter with growth of 27% Q222 revenues rose 27% to DKK 2,215m while EB ... Läs mer på ABG Sundal Collier

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