Interim report 1 January – 30 June 2022
Evaluating strategic options
SECOND QUARTER 2022
- Revenue increased by 6% to SEK 1,691m (1,590)
- Operating profit increased by 2% to SEK 147m (144)
- Operating margin decreased to 8.7% (9.0)
- The result for the period decreased by 63% to SEK 32m (86)
- Basic earnings per share amounted to SEK 2.20 (5.94)
- Cash flows from operating activities amounted to SEK 39m (120)
JANUARY - JUNE 2022
- Revenue increased by 20% to SEK 3,436m (2,856)
- Operating profit increased by 14% to SEK 255m (224)
- Operating margin decreased to 7.4% (7.8)
- The result for the period decreased by 34% to SEK 95m (142)
- Basic earnings per share amounted to SEK 6.50 (9.79)
- Cash flows from operating activities amounted to SEK 23m (211)
Lars Corneliusson, CEO, comments: "The conditions for our business in Russia have continued to deteriorate. Further sanctions have been introduced and Volvo and certain other key partners have still suspended sales to Russia. We take all measures to ensure that our operations in Russia comply with applicable laws. Where permitted, we have so far continued to serve our customers. We are now evaluating strategic options for the Russian business, including divesting all or part of it, or downsizing it and continuing on a limited scale. During the quarter we have worked to isolate the Russian business from other parts of the Group, ensuring that potential negative effects from the Russian business will not spill over on our businesses elsewhere.
In Russia, new and used machine sales in units decreased by 64% and 48%, respectively. We expect sales to continue to decline as our sellable inventories decline and as new restrictions take effect. Total revenue in Russia/CIS was down 20% in rubles but grew by 5% in Swedish krona to SEK 1,315m. The operating margin declined. The operating result was flat at SEK 157m.
Our businesses in Kazakhstan and Germany are developing well and we continue to strengthen our positions in these markets. In Germany we are now launching electric trucks from both Volvo and Renault Trucks and are about to launch a rental business for electric trucks. We are also getting closer to turning the business into profits. We continue to look for opportunities to grow the business, both when it comes to new services and products as well as to new markets.
The German market for heavy trucks declined by 6% in the second quarter 2022. Our new trucks sales declined by 4% in units and we gained further market shares. Our used trucks business continued to contribute to the top line. Aftermarket sales grew by 28%. We now expect to reach positive operating profit sometime in the second half of 2022. Total revenue in Germany grew by 12% to SEK 375m. The operating result improved by 23% to SEK -10m.
These are turbulent times. In a longer perspective, we however believe that the underlying conditions and business opportunities in the Kazakh and German markets remain strong.”
Ferronordic is a service and sales company in the areas of construction equipment and trucks. It is the dealer of Volvo Construction Equipment and certain other brands in all of Russia and Kazakhstan, aftermarket partner of Volvo Trucks and Renault Trucks in part of Russia, and dealer of Volvo Trucks and Renault Trucks in part of Germany. The company also offers contracting services where it owns and operates equipment to carry out works for customers. Ferronordic began its operations in 2010 and now has approx. 100 outlets and approx. 1,800 employees. Ferronordic’s vision is to be regarded as the leading service and sales company in its markets. The shares in Ferronordic AB (publ) are listed on Nasdaq Stockholm. www.ferronordic.com
For investors, analysts and media:
This information is information that Ferronordic AB (publ) is obliged to disclose pursuant to the EU Market Abuse Regulation and the Swedish Securities Market Act (2007:528). The information was submitted for publication on 17 August 2022, 07:30 CET.
Your subscription is now saved and you will receive an e-mail to verify your address and activate your subscription.
Latest press releases
Interim report 1 January – 30 September 2023
Q3 2023: Weak operationally. Key strategically.
Ferronordic expands to the USA – acquires one of the country’s largest Volvo Construction Equipment dealers
Ferronordic has entered into an agreement to purchase Rudd Equipment Company, Inc. (“Rudd”), one of the largest dealers of Volvo CE in the United States with operations in all or parts of nine states. Ferronordic thereby takes its first step to expand into the important US market. The purchase price amounts to USD 95.0m, corresponding to 5.8 x 2022 adjusted earnings before tax. In 2022, Rudd had sales of USD 308.3m with an operating income of USD 16.5m and earnings before tax of USD 16.4m (both adjusted to IFRS). In addition, Ferronordic acquires two real properties for USD 10m, currently rented by Rudd.