Ferronordic (FNM) Q1 2025 earnings summary

Executive summary

• Revenue increased 3% year-over-year to SEK 1,206m, driven by strong service and parts sales despite market uncertainty.

• Operating profit declined to SEK 13m, mainly due to lower gross margin and product mix.

• Net loss of SEK -150m, primarily from adverse foreign exchange effects.

• Net debt decreased to SEK 1,826m, reflecting loan repayments and currency effects.

• The company remains optimistic about long-term opportunities, especially in the U.S., and is focused on cost control and inventory reduction.

Financial highlights

• Gross profit declined 15% and gross margin dropped to 16.3%, mainly due to U.S. segment and product mix.

• SG&A costs decreased by 11%, with SG&A as a percentage of revenue at 16.2%.

• Service and parts sales rose 17% year-over-year, offsetting a 4% decline in equipment and truck sales.

• Cash flow from operations increased to SEK 185m, aided by lower working capital.

• Earnings per share before dilution was SEK -10.32 (from 4.83).

Outlook and guidance

• U.S. business outlook remains positive, supported by infrastructure needs and no major project cancellations.

• German market remains weak, but government spending and cost reductions may aid recovery.

• Kazakhstan continues to offer growth opportunities, though it is a minor part of operations.

• Long-term goals: double revenue, operating margin above 6%, net debt/EBITDA below 3x over the cycle.