Interim report 1 January – 30 June 2024
Q2 2024: Continued strength in the US
SECOND QUARTER 2024
- Revenue increased by 62% to SEK 1,095m (674)
- Operating profit increased by 63% to SEK -4m (-10)
- Operating margin increased to -0.3% (-1.5)
- The result for the period decreased by -226% to SEK -81m (64)
- Basic earnings per share1 amounted to SEK -5.56 (4.41)
- Cash flows from operating activities amounted to SEK 270m (40)
JANUARY - JUNE 2024
- Revenue increased by 74% to SEK 2,267m (1,305)
- Operating profit increased by 169% to SEK 17m (-25)
- Operating margin increased to 0.7% (-1.9)
- The result for the period decreased by -115% to SEK -11m (71)
- Basic earnings per share1 amounted to SEK -0.73 (4.87)
- Cash flows from operating activities amounted to SEK 394m (-86)
1 Before dilution.
Lars Corneliusson, President and CEO, comments:
“The second quarter of 2024 was mixed with continued strong performance in the US but continued challenges in our other markets.
The US operations continued to perform well. Total revenue was SEK 707m and the operating profit was SEK 51m with an operating margin of 7.3%. Equipment sales remained strong but were lower than in the first quarter 2024. Aftermarket operations were, however, stronger. During the quarter, the market for larger construction equipment in our area declined, but we delivered more machines and increased our market share. As the construction season got under way, so did the utilization of the rental fleet and the demand for service and spare parts. We spent further time with our new colleagues to learn more about the organization and the opportunities available. We had a strategy meeting with all branch managers where we exchanged ideas and shared our impression and vision for the business.
In Germany, we had a challenging quarter. In the market for new trucks, we saw the effects of increased supply and price competition from previous periods. Unit sales declined and we lost market share. On the other hand, a larger share of truck sales was rigid trucks, which typically have better aftermarket potential. Despite lower business activity, aftermarket sales were stable. We continued to implement our efficiency program and estimate that we reached our goal of saving approximately SEK 60m per
year at the end of the second quarter. As a result of lower sales, inventory remains too high. The work to normalise the stock level will continue throughout 2024. At the same time, we continue to invest in electric trucks and sustainable transport. Overall, turnover decreased by 44% to SEK 332m. Operating profit decreased to SEK -27m.
In Kazakhstan, the market for construction equipment remained challenging. Our new equipment sales, measured in units, decreased to 11. The aftermarket also decreased as business activity slowed. Due to lower-than-expected sales, the stock level is too high in Kazakhstan as well. Turnover decreased to SEK 56m, or 5% of the Group's total. Operating profit decreased to SEK -1m.
For the Group, turnover increased by 62% to SEK 1,095m. Operating profit amounted to SEK -4m. Net debt increased to SEK 1,671m, mainly due to the acquisition of the American operations in November 2023.
We are optimistic about our expansion into the US and the opportunities there. Demand is supported by a dynamic economy and a significant need to upgrade the country's infrastructure. The German economy is weak and we are taking steps to make our organization more resilient. However, we believe in continued strong demand in the aftermarket business and remain optimistic about the long-term prospects in Germany. We also see long-term potential in Kazakhstan.”
About Ferronordic
Ferronordic is a service and sales company in the areas of construction equipment and trucks. It is the dealer for Volvo CE in all or parts of nine states in the United States and also represents Hitachi, Sandvik and Link-Belt in parts of the same area. Ferronordic is dealer of Volvo Trucks, Renault Trucks and Sandvik Mobile Crushers in Germany and dealer of Volvo CE and certain other brands in Kazakhstan. Ferronordic began its operations in 2010 and currently has 41 outlets and approx. 800 employees. Ferronordic’s vision is to be the leading service and sales company in its markets. The shares in Ferronordic AB (publ) are listed on Nasdaq Stockholm. www.ferronordic.com
Contact
For investors, analysts and media:
Erik Danemar, Group CFO and Head of Investor Relations,
Financial Calendar:
Interim report July-September - 14 November 2024
Interim report October-December - 20 February 2025
Nybrogatan 6
SE-114 34 Stockholm
Corporate ID no. 556748-7953
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 15 August 2024, 07:30 CET.
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