Group costs an issue: too much opex for current operations
For Q1e, we expect both Ferronordic's remaining segments, Germany and Kazakhstan (CIS), to be profitable at the EBIT level. However, the current overhead cost base is too big for the company's smaller operations since it divested its Russian business, resulting in an estimated negative group-level EBIT. The company is looking to fix this issue by using its ~SEK 1bn (SEK 66/sh) net cash position, i.e. making a larger acquisition. All in all, we estimate Q1 revenue of SEK 570m, down 67% y-o-y (+4% org., -74% divested, +3% FX), and EBIT of SEK -1m, with Germany and CIS (excl. overhead) at an EBIT of SEK 6m and SEK 4m, respectively.
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