Nexam Chemical: Q3 sales dip likely temporary - ABG

Sales -12% and adj. EBIT SEK -4m vs. ABGSCe
Lower volumes from some large customers likely temporary
Industrial weakness partially compensated for by new customers


Q3 results

Sales came in at SEK 44m (-12% vs. ABGSC 50m), -4% y-o-y. EBIT was -2.5m (-272% vs. ABGSC 1.5m), and adj. EBIT was -2.5m (-272% vs. ABGSC 1.5m) for a margin of -6% (ABGSC +3%). The company produced lease adj. FCF of -1.9m, and ended the quarter with a cash balance of 8.6m vs. R12m lease adj. FCF -3.5m. Some historically large customers within Performance Chemicals called for significantly lower volumes in the quarter than usual, an effect the company expects to be temporary. We think this was the main driver of the sales miss. Costs remain under control, with the gross margin even beating our estimate (47% vs. 45%), and the EBIT miss is thus solely due to the lower sales volumes. The worse cash flow was due to two major invoices that were paid after month end.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/nexam-chemical/Equity-research/2024/10/nexam-chemical---q3-sales-dip-likely-temporary/