MT Højgaard Holding: The future depends on actions taken now - ABG

Strong Q2’21e order intake of DKK 3.5bn
Underlying momentum for new orders continues
We reiterate our FVR of DKK 170-290/share

Due to the timing of orders in the backlog, MTHH’s guidance is for a relatively stable Q2’21 followed by high activity in H2’21. We estimate 4% organic sales growth in Q2 for revenue of DKK 1.6bn and EBIT (b. PPA/special items) of DKK 42m (2.7% margin). In the quarter, MTHH won two major orders, Rønne Harbour (~DKK 300m) and Holm 8/Nykredit HQ (~DKK 1.7bn), which were already in our estimates. Therefore, we forecast a Q2’21 order intake of DKK 3.5bn (including DKK 1.5bn in an underlying run-rate, which the company has previously guided). Our estimate is 30% below FS consensus (DKK 4.5bn) for the quarter but in line on a FY basis. In our pre-close call with management, it said underlying pipeline activity remains solid and will likely remain so in the mid-term given the recent DKK 160bn 2035 Danish infrastructure deal. It is clear that the international activities (Africa, Portugal and Maldives) remain under pressure due to COVID-19 lockdowns in the short term. Lastly, MTH DK announced an arbitration case in relation to the Gødstrup Hospital, which is not surprising given the delays.

In this report we include the acquisition of 60% of NemByg in our estimates, with business supporting the E&P construction offering in the south of Denmark. Our FY’21e sales of DKK 6.8bn is in line with guidance and consensus, but we/consensus estimate EBIT of DKK 190m, ~12.5% above guidance of DKK 160m. However, given the back end-loaded 2021 due to the order backlog and hence the high pick-up in activity H2’21e, any guidance upgrade is not likely until after the Q2’21 report.

For 2022e, MTHH is trading at a P/E of 10x versus Nordic construction peers at 14x and the EV/EBITDA is ~6x vs. peers at 8.5x. We reiterate our FVR of DKK 170-290.

https://www.introduce.se/foretag/mt-hojgaard-holding/Equity-research/2021/7/mt-hojgaard-holding---the-future-depends-on-actions-taken-now/