MT Højgaard Holding: The negatives dominated the share - ABG

EBIT revisions of -6% to + 3%
Good order execution and financial discipline
Order intake and loss from continued operations disappointed


Continued display of financial discipline

Q1'24 was a display of MTHH's improved financial discipline, demonstrated through its robust earnings, with EBIT up 69% to DKK 94m, and good order execution with revenues up 6%. However, exhibiting good order discipline comes at a cost when markets are weak and price competition is tough, and Q1'24 order intake of DKK 1,254m missed our estimate by 26%. While the core Danish construction divisions, MTH DK and E&P, did well, the P&L was hit by a loss from discontinued operations of DKK 68m, of which the Greenland activities contributed significantly, we believe. The very strong cash flow generation in 2023, driven by a significant improvement in NWC, will be hard to match in 2024 and cash from operations in Q1 '24 came in at DKK -33.3m versus DKK +44.2 in Q1'23, due to tax payments and a slight increase in working capital (still negative DKK -650m), while ROIC was 69%.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/mt-hojgaard-holding/Equity-research/2024/5/mt-hojgaard-holding---the-negatives-dominated-the-share/