SinterCast: Unfortunate start to '23, but outlook still strong - ABG

Slow start to '23, but March better, 4m-5m EE milestones delayed
-14% y-o-y EBIT drop caused by temporary dip in cup sales
Our '24e-'25e outlook remains intact, fair value SEK 100-160


Q1: temporary dip in cup sales, somewhat slower ramp

Q1 revenue came in at SEK 26.4m, down -6% y-o-y, and Engine Equivalents (EE) came in at 3.3m, up 3% y-o-y. The revenue decrease was mainly due to a drop in sampling cup shipments, which came in at 32,900, -33% y-o-y. The company states that the reason for this drop was order timing and inventory reductions following the normalisation of global supply chains, and thus was not related to future production demand. We believe this was indeed a temporary dip. EBIT was SEK 6.5m, down -14% y-o-y, as a result of the revenue decrease and operating leverage. Similarly, net profit was SEK 6.3m, -20% y-o-y. The somewhat slower than expected EE ramp in Q1 caused the company to state that the 4m and 5m EE milestones will likely be delayed. Nevertheless, after a weaker January and February, production picked up again in March, reaching 3.8m EE, making it the third highest month of production ever. Management states that the outlook for both production ramps and equipment installations remains good.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/sintercast/Equity-research/2023/4/sintercast---unfortunate-start-to-23-but-outlook-still-strong/