Q1 outcome
Sales were SEK 631m (+11% vs. ABGSCe 570m), and the gross profit was 85m (+6% vs. ABGSCe 80m), for a gross margin of 13.5% (ABGSCe 14.0%). EBIT was positive in both operating segments, SEK 5m in Germany (ABGSCe 6m) and 7m in CIS (ABGSCe 4m), however overhead costs were higher than we expected, leading to a group-level EBIT of SEK -14m (ABGSCe -1m). This illustrates how the opex base is too big for Ferronordic's smaller operations since the Russia divestment, and the company needs to use the net cash position aggressively for M&A or scale down opex. The net cash position amounted to 681m (~50% of mcap) by end of Q1, down from SEK 957m in Q4'22, largely due to NWC build-up hurting cash flow.
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