Nordecon (NCN1T) Q2 2024 earnings summary

Executive summary

• Revenue for H1 2024 increased 33% year-over-year to €114.9 million, with strong growth in the Buildings segment and both main segments returning to profitability.

• Operating profit for H1 2024 was €3.3 million, reversing a loss of €0.4 million in H1 2023; EBITDA rose to €4.7 million from €1.1 million.

• Net profit for H1 2024 was €1.8 million, compared to a net loss of €2.3 million in H1 2023; EPS was €0.03.

• Order book at 30 June 2024 stood at €178.8 million, up 15% year-over-year, with 90% in the Buildings segment.

• The group exited the concrete work market and Finnish operations in December 2023, focusing on core contracting and design management.

Financial highlights

• Revenue: €114.9 million in H1 2024 (+33% year-over-year).

• EBITDA: €4.7 million (H1 2023: €1.1 million); EBITDA margin 4.1% (H1 2023: 1.3%).

• Gross profit: €7.2 million (H1 2023: €2.8 million); gross margin 6.3% (H1 2023: 3.2%).

• Operating margin: 2.8% (H1 2023: -0.5%); net margin: 1.6% (H1 2023: -2.7%).

• Operating cash flow: €6.1 million inflow (H1 2023: €4.3 million inflow).

Outlook and guidance

• Management expects slight revenue growth in 2024 versus 2023, focusing on cost management and risk avoidance.

• Strategic targets include annual revenue growth of at least 5% and operating margin consistently above 3%.

• Estonian construction market is expected to contract further in 2024 due to weak demand and declining public investment.

• In Ukraine, volumes have recovered to pre-war levels, but future developments remain uncertain due to the ongoing conflict.

• Swedish operations are seeking new opportunities amid weak demand and expected economic stabilization in H2 2024.