Q2 2024 Ferronordic AB Earnings Call Transcript
Key Points
- Ferronordic AB (OSTO:FNMA PREF.PFD) reported a 62% revenue growth, primarily driven by the addition of US operations.
- The US operations showed strong performance with a revenue of over SEK700 million and an operating margin of 7.3%.
- The company gained market share in the US by delivering more machines despite a 27% market decline in larger construction equipment.
- Aftermarket business in Germany remained stable, with a 19-percentage-point increase in revenue share to 43%.
- Ferronordic AB is optimistic about the US market due to extensive federal and state infrastructure programs, which are expected to drive construction equipment demand.
- Net profit decreased to minus SEK81 million, mainly due to exchange rate losses.
- The German market faced challenges with a 44% revenue decline, partly due to not responding to price competition.
- Kazakhstan's market for construction equipment declined, leading to slow sales and high inventory levels.
- The cost reduction program in Germany took longer and cost more than initially anticipated.
- Ferronordic AB's net debt increased slightly to SEK1,671 million, influenced by the acquisition and consolidation of US operations.
Thank you. Hello, everybody. This is Lars Corneliusson here and welcome to this presentation of the second quarter results for Ferronordic of 2024. So we see continued strength in the US in the quarter. Overall, we had 62% revenue growth and that is driven by the addition of the US operations, operating results minus SEK4 million.
Net profit decreased to minus SEK81 million and that was mainly as a result of exchange rate losses. Net debt increased slightly to SEK1,671 million after obviously the acquisition and consolidation of balance sheets in the US operations and total equity then decreased to SEK1,627 million. If we talk about the US, it's continuing to perform well.
We had a revenue of slightly above SEK700 million in Q2 with an operating margin of 7.3%, SEK51 million. We saw the market in the US the first five months was going down slightly from a very high base in '23, 6% lower. We, however, delivered more machines to customers and obviously then we gained quite some market shares, actually.
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