Q3 2024 Ferronordic AB Earnings Call Transcript
Key Points
- Ferronordic AB (OSTO:FNMA PREF.PFD) reported a 77% revenue growth, driven significantly by strong performance in the US market.
- The US operations achieved a revenue of SEK686 million with an operating profit of SEK53 million, resulting in an operating margin of 7.7%.
- The company has successfully increased its market share in the excavator segment in the US, supported by a strategic expansion of its rental fleet.
- In Germany, despite a challenging market, the service and parts business grew by 6%, and the company is on track with its cost reduction program, achieving a SEK60 million annual savings run rate.
- Kazakhstan operations showed improvement with a 19% increase in revenue and a positive operating profit of SEK3 million, indicating potential growth in the region.
- Ferronordic AB (OSTO:FNMA PREF.PFD) faced a significant decline in the German market, with deliveries down by 60% and a 31 million SEK impairment of inventory due to market conditions.
- The company reported a net income decrease to minus SEK88 million, impacted by foreign exchange losses.
- Net debt increased to SEK1.792 billion, primarily due to the acquisition of US operations and efforts to expand the rental fleet.
- The German market is experiencing severe price pressure and economic downturn, affecting overall performance.
- In Kazakhstan, despite revenue growth, the service and parts business declined due to decreased client activity and competition from Chinese equipment.
Then we move to slide number 2 here and we continue to see strong performance in the US and that led us -- was much contributing to a 77% revenue growth. We had an operating result that increased to SEK2 million. If we exclude a one-off effect of an impairment of inventory in Germany, it was SEK32 million. Net debt of SEK1.792 billion and that is after the acquisition of the US operation and also partly driven by an expansion of our rental fleet in the United States.
Total equity of close to SEK1.5 billion. And we also presented on October 2 new financial objectives on our Capital Markets Day. So we move a little further and speak more about the US. The operations there are continuing to perform well. We had revenue of SEK686 million, operating profit of SEK53 million, which then gives us an operating margin of 7.7%.
We had lower machine sales. Actually the market is slightly down from high levels in '23, but the revenue was higher also than in last quarter and that is we had a good mix, we sold a large
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