Ferronordic (FNM) Q2 2024 earnings summary

Executive summary

• Group revenue grew 62% year-over-year to SEK 1,095m, mainly due to the US acquisition, while net profit declined to SEK -81m, impacted by exchange rate losses and increased net debt from the US acquisition.

• US operations contributed SEK 707m in revenue and SEK 51m in operating profit, offsetting weaker results in Germany and Kazakhstan/Central Asia.

• Net debt increased to SEK 1,671m after the US acquisition; equity decreased to SEK 1,627m.

Financial highlights

• Gross profit rose 139% year-over-year to SEK 202m, with gross margin up to 18.4%.

• Operating margin improved to -0.3%; EPS dropped to SEK -5.56.

• US segment: SEK 707m revenue, SEK 51m operating profit, 7.3% margin; Germany: SEK 332m revenue, SEK -27m operating profit; Kazakhstan: SEK 56m revenue, SEK -1m operating profit.

• Net debt/Equity: 1,671m/1,627m; Equity/Assets: 33%.

• Working capital as % of revenue: 21% group-wide.

Outlook and guidance

• Optimism for continued US growth, supported by infrastructure programs and strong Midwest demand.

• Germany expected to remain weak in the near term, but long-term aftermarket and e-mobility opportunities seen; cost reductions underway.

• Kazakhstan/Central Asia remains challenging but holds long-term potential.

• Focus on integrating US operations and improving German and Kazakh contributions before further major acquisitions.