North Media: Still waiting for paper demand to recover - ABG

• Q2e: revenues down ~6% y-o-y, ~17% EBIT margin
• Paper prices down >26%, but too early for demand recovery
• '23e EPS up 19% on Q2 investment gain; FVR 59-98 (58-96)

Q2e: ~6% y-o-y revenue decline, ~17% EBIT margin
We forecast Q2 revenues of DKK 243m or a ~6% y-o-y decline (note tougher Q2 comps and easier in Q3 and Q4), weighed down by our forecast of a 9% y-o-y decline in the Last Mile segment (84% of '22 group revenues). We forecast Q2 EBIT of DKK 41m or a ~17% EBIT margin (vs. 20-26% in Q2s in '20-'22), with the lower margin vs. previous years driven by declining revenues combined with insufficient cuts in more fixed-nature costs (e.g. administration). However, we expect a portfolio gain of DKK 64m in Q2e to more than compensate, thus lifting Q2e diluted EPS to DKK 4.3 (vs. DKK -2.6 in Q2'22).

Länk till analysen i sin helhet: https://cr.abgsc.com/contentassets/e36aa8917a7642698789cb5261b2b4a2/pdf/still-waiting-for-paper-demand-to-recover.pdf