Lamor Q3/2024 Interim Report: Lamor’s new orders were at a high level in Q3
Lamor Corporation Plc | Stock Exchange Release | October 24, 2024 at 09:00:00 EEST
Lamor’s new orders were at a high level in Q3
In the third quarter, Lamor increased its revenue and profitability compared to the previous quarter, although both decreased slightly from the comparison period. At comparable exchange rates, however, revenue was at previous year’s level. The number of new orders received remained high, and revenue excluding major service projects saw an increase. Market demand has remained strong, and the Company is updating its growth strategy to better capitalise on this demand.
This release is a summary of Lamor’s Interim Report. The complete report is attached to this release as a pdf file. It is also available on the company website at lamor.com/investors.
July–September 2024 in brief
- Revenue was EUR 30.8 million (31.1), a decrease of 0.9% from the comparison period
- EBIT was EUR 2.0 million (1.6) or 6.4% of revenue (5.1%), an increase of 25.5%
- Adjusted EBIT was EUR 2.1 million (3.0) or 6.7% of revenue (9.6%), a decrease of 30.9%
- Net cash flow from operating activities was EUR -4.3 million (-7.3)
- Earnings per share (basic) was EUR -0.01 (0.01)
- Orders received was EUR 35.4 million (13.5), an increase of 161.7%
January–September 2024 in brief
- Revenue was EUR 81.8 million (87.7), a decrease of 6.8%
- EBIT was EUR 3.7 million (5.4) or 4.5% of revenue (6.1%), a decrease of 32.1%
- Adjusted EBIT was EUR 3.9 million (6.9) or 4.8% of revenue (7.9%), a decrease of 43.0%
- Net cash flow from operating activities was EUR -15.6 million (-15.0)
- Earnings per share (basic) was EUR -0.04 (0.08)
- Orders received was EUR 120.7 million (34.0), an increase of 255.2%
- Order backlog* at the end of the period amounted to EUR 158.7 million (146.1)
* On 10 September 2024, Lamor announced that the company started negotiations with NEOM Company related to the proposed reduction of responsibilities allocated to Lamor. At the time of reporting, an order of approximately EUR 55 million is included in the order backlog and orders received in accordance with the original agreement.
The figures in brackets refer to the comparison period, which is the same period the previous year, unless otherwise stated.
Johan Grön, CEO
In the third quarter, Lamor increased again its revenue and profitability compared to the previous quarter. The slight decrease in revenue from the previous year was due to the higher level of revenue recognition from the Kuwait soil remediation project during the comparison period, which was mostly offset by increased sales in environmental protection and material recycling. Revenue excluding our major service projects was higher than in the comparison period, both in the third quarter and in January-September as a whole, highlighting the potential of our portfolio.
I am particularly pleased to report that we received new orders worth more than EUR 35 million in the third quarter. A significant proportion of these orders came from South America, where we won a two-year soil remediation project in Ecuador and a three-year environmental protection project in Peru in September, along with minor orders from all our market areas. Regarding the NEOM project we won in May, we announced in September that we had begun negotiations with the customer on the responsibilities allocated to Lamor. These negotiations were ongoing at the time of publication of this report.
During the third quarter, we successfully completed one of our recent major projects, establishing three oil spill response bases on the Red Sea coast in collaboration with the Saudi Arabian Center for Environmental Control (NCEC). The recent attacks on oil tankers in the region have further highlighted the relevance of preparedness. I would like to thank all Lamorians for their outstanding effort, which serves as an excellent example of a well-executed major project and is an important reference for future projects. We have also continued negotiations related to new business opportunities in environmental protection in the Middle East region.
Our soil remediation project in Kuwait progressed well. Despite truly challenging circumstances, we have succeeded in building a unique soil remediation operation where our results consistently outperform competing projects. Despite its operational success, the project still ties up too much of our working capital. However, thanks to efforts to reduce working capital, the working capital employed is expected to start declining from the last quarter of the year. The release of working capital has a significant impact on the company's cash flow and balance sheet structure.
In the Bangladesh project, Lamor has also performed very well, despite the fact that the delivery of the final part of the project has had to be postponed twice due to reasons unrelated to Lamor. Discussions about continuing the cooperation after the project are already underway with the customer. At our concept facility for chemical recycling of plastic, we progressed to the installation of process equipment in the autumn. However, production is not expected to start until early 2025, and the ramp-up of production will continue in stages. Chemical recycling of plastic represents a significant business opportunity for Lamor, and once the concept plant is completed, it will be possible to scale production. Demand for the end product has recently strengthened further.
Reaching our guidance requires good performance in the fourth quarter. We are involved in tenders of various sizes in the Middle East, Africa and South America. In the autumn, we have worked on our updated growth strategy. Our view of the market potential remains unchanged. Lamor's broad product and service offering provides numerous avenues for profitable growth. This requires even closer relationships with our key customers and increased local market understanding. The two new SVPs appointed this week bring us not only extensive industry experience, but also a strong understanding of our customers and local markets and culture. I believe that together with them we can create a strong foundation for Lamor's next phase of growth.
Key figures
| EUR thousand (unless otherwise noted) | Q3 2024 | Q3 2023 | Change % | 1-9/2024 | 1-9/2023 | Change % | 1-12/2023 |
| Revenue | 30,793 | 31,086 | -0.9% | 81,821 | 87,745 | -6.8% | 122,520 |
| EBITDA | 3,708 | 3,278 | 13.1% | 8,879 | 10,472 | -15.2% | 16,182 |
| EBITDA margin % | 12.0% | 10.5% | 10.9% | 11.9% | 13.2% | ||
| Adjusted EBITDA | 3,736 | 4,625 | -19.2% | 8,982 | 11,819 | -24.0% | 18,464 |
| Adjusted EBITDA margin % | 12.1% | 14.9% | 11.0% | 13,5% | 15.1% | ||
| Operating profit or loss (EBIT) | 1,971 | 1,570 | 25.5% | 3,658 | 5,387 | -32.1% | 8,426 |
| Operating profit (EBIT) margin % | 6.4% | 5.1% | 4.5% | 6.1% | 6.9% | ||
| Adjusted operating Profit (EBIT) | 2,056 | 2,975 | -30.9% | 3,936 | 6,910 | -43.0% | 10,943 |
| Adjusted operating Profit (EBIT) margin % | 6.7% | 9.6% | 4.8% | 7.9% | 8.9% | ||
| Profit (loss) for the period | -100 | 381 | -726 | 2,296 | 2,679 | ||
| Earnings per share, EPS (basic), euros | -0,01 | 0.01 | -0,04 | 0.08 | 0.09 | ||
| Earnings per share, EPS (diluted), euros | -0,01 | 0.01 | -0,04 | 0.08 | 0.09 | ||
| Return on equity (ROE) % | -0.2% | 0.6% | -1.1% | 3.6% | 4.3% | ||
| Return on investment (ROI) % | 1.5% | 1.6% | 3.0% | 5.8% | 8.7% | ||
| Equity ratio % | 34.8% | 46.1% | 34.8% | 46.1% | 40.0% | ||
| Net gearing % | 109.1% | 51.9% | 109.1% | 51.9% | 60.7% | ||
| Net working capital | 83,682 | 59,224 | 41.3% | 83,682 | 59,224 | 41.3% | 62,245 |
| Orders received | 35,411 | 13,532 | 161.7% | 120,703* | 33,980 | 255.2% | 43,950 |
| Order backlog* | 158,739 | 146,063 | 8.7% | 158,739 | 146,063 | 8.7% | 124,192 |
| Number of employees at the period end | 593 | 660 | -10.2% | 593 | 660 | -10.2% | 840 |
| Number of employees on average | 604 | 682 | -11.4% | 641 | 630 | 1.7% | 658 |
* On 10 September 2024, Lamor announced that the company had started negotiations with NEOM Company related to the proposed reduction of responsibilities allocated to Lamor. At the time of reporting, an order of approximately EUR 55 million is included in the order backlog and orders received in accordance with the original agreement.
Events after the reporting period
Disclosure policy updated
On 1 October, the Company announced that Lamor’s Board of Directors had approved the updated Disclosure Policy. The update includes various technical and stylistic updates, specified responsibilities related to the approval of stock exchange releases and company announcements and specified criteria for publishing press releases. Changes took effect immediately. The updated disclosure policy is available on the company's website at https://www.lamor.com/investors/governance/disclosure-policy.
Renewal of the Group Leadership Team
On 23 October 2024, Lamor announced the appointments of two new market area SVPs as the Company aims to strengthen customer relationships and focus sales in all its markets. Rob James (MSc, Process Safety & Loss Prevention) was appointed SVP, Europe and Asia as of 11 November 2024. Aziz Al-Othman (MSc, Computer-Based Information Systems; Mechanical & Marine Engineer) was appointed SVP, Middle East and Africa as of 1 November 2024.
Östen Lindell (current SVP, Europe and Asia) and Pentti Korjonen (current SVP, Middle East and Africa) will leave their positions in the company. Santiago Gonzalez, who has led the South and North America market area, has also expressed his interest in retirement, and the recruitment of his successor in on-going.
Following the changes, Lamor's Group Leadership Team consists of:
- Johan Grön, CEO
- Vesa Leino, interim CFO (until 31 October 2024) – Mikko Forsell, CFO (as of 1 November 2024)
- Johanna Grönroos, Chief Strategy Officer
- Santiago Gonzalez, SVP, North and South America
- Rob James, SVP, Europe and Asia (as of 11 November 2024)
- Aziz Al-Othman, SVP, Middle East and Africa (as of 1 November 2024)
- Juha Korhonen, VP, Supply Chain and Project Management
- Mervi Oikkonen, VP, People and Culture
Financial calendar for 2025
In 2025, Lamor will publish financial reports as follows:
- Financial statements release for the year 2024 on 6 March 2025
- Interim report January−March 2025: on 8 May 2025
- Half-year report January−June 2025 on 31 July 2025
- Interim report January−September 2025 on 30 October 2025
The annual report 2024, including financial statements and report by the Board of Directors, is estimated to be published on Lamor’s website on 7 April 2025, the latest.
The Annual General Meeting is tentatively scheduled to be held on 28 April 2025. The meeting will be convened later by Lamor’s Board of Directors.
Webcast for shareholders, analysts and media
Webcast for shareholders, analysts and media on the results for the financial period January–September 2024 will be arranged on 24 October 2024 at 10:00 a.m. EEST. The webcast includes a Q&A session, and participants can ask questions in English and Finnish via the event chat room. The webcast can be followed at https://lamor.videosync.fi/q3-2024.
A recording of the webcast will be available later at the company’s website at lamor.com/investors/reports-and-presentations.
Porvoo, 24 October 2024
Lamor Corporation Plc
Board of Directors