Ovzon: Slow quarter, but we remain positive for H2 - ABG
Q2 sales of SEK 33m, -11% q-o-q and -22% vs. ABGSCe
‘22e sales cut by 39% due to the postponed launch
Delayed Ovzon-3 launch does not mean any lost sales
After reporting solid sequential growth of +10% q-o-q in Q1, Q2 sales fell short to our expectation and were SEK 33m for -11% growth vs. Q1. Given the solid momentum in terms of order announcements in H1, we had expected to see more sales improvements, explaining why Q2 sales were -22% vs. ABGSCe. Lower sales together with lower gross margins led to adj. EBIT of SEK -31m (vs. SEK -28m in Q1’21) against our forecast of SEK -23m. Capex was SEK 62m, meaning that Ovzon has accumulated capex of SEK 1.1bn since Q1’19 (it has guided for total Ovzon-3 related capex of ~SEK 1.5bn). More importantly, yesterday it announced that the launch of Ovzon-3 has been postponed to Q2’22 from Q4’21 due to the COVID-19-related supply chain issues. While uncertainties remain as to when these issues will abate, we believe that Ovzon’s new timeline looks realistic given how late-stage the project currently is.
We reduce ‘21e sales by 12% due to the Q1 miss. We remain confident that sales will improve in H2e, supported by the recent order announcements (both services and terminal orders). For 2022-2023e, we keep our leased capacity sales forecast largely unchanged, but push Ovzon-3 related sales from Q3’22 to Q1’23. For 2023, we estimate 20% Ovzon-3 utilisation in Q1, which gradually expands to 85% in Q4. This results in 2023e sales of SEK 651m, a -39% cut from our previous estimate of SEK 878m.
In our view, the rescheduled launch date is an external issue that does not impact the demand for the company’s services and long-term growth opportunities. Neither does it change our view of the likelihood of a successful launch. On our current estimates, the share is trading at 12.5x ’23e EV/EBIT and 6.0x on ‘24e.
Länk till analysen i sin helhet: https://www.introduce.se/foretag/ovzon/equity-research/2021/8/ovzon---slow-quarter-but-we-remain-positive-for-h2/