Bonava annual report

bouhlalyounes10 Feb 6, 2023

On 2 Feb 2023 Bonava released its annual results for 2022 – shares dropped by more than 10% on that day.

Actually, it is not the first time when Bonava disappointed investors.
The Company is constantly showing weak results over the last 6 years:

  • Capitalization decreased 4 times – from SEK 12.4 bn in 2017 to SEK 3.2 bn in 2022
  • Share price dropped by 71% in the period
  • Net income decreased 3 times – from 1.4 bn in 2017 to 0.6bn in 2022 which resulted in net profit margin decrease from 10.4% to 3.2%
  • EPS decreased from 13.0 to 7.36 SEK per share
  • Total debt and leverage increased
bbk365 Feb 6, 2023

May be it is temporary. May be it is time to buy?

bouhlalyounes10 Feb 6, 2023

No, I think it is time to sell.
Bonava faces growing construction costs as a result of rapidly growing inflation.

bouhlalyounes10 Feb 6, 2023

At the same time the company cannot increase sales price because demand is very sensitive to further price increase which is already record high.

bbk365 Feb 6, 2023

Plus they have relatively high debt and it tend to grow over the last periods. Average interest rate increased from 2.18% in 4Q2020 to 4.2% in 4Q2022.

Praveen Chawla GuruFocus PremiumPlus Icon Feb 6, 2023

The stock is selling at < half of tangible book value. Large margin of safety.
It should recover when the economy recovers.