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Studsvik: Q3 a bit soft, F&MT prepares for ramp-up - ABG

Sales can be lumpy on a quarterly basis
Small revisions following the report
Soaring energy prices put nuclear in better light

Studsvik reported Q3 sales of SEK 182m (188m), which was 3% below ABGSCe, driven by sales below expectations in Decommissioning and F&MT. That was slightly offset by Waste Management and Scandpower. EBIT was SEK 21.9m (23.1m) and adj. EBIT was SEK 10.4m (23.1m), the deviation was caused by the sale of land in Studsvik that had a positive effect of SEK 11.5m. We expected adj. EBIT of SEK 12.9m and the main deviation was from a lower EBIT margin in F&MT. The revenue mix in that segment was less favorable this quarter with a higher amount of nuclear fuel transport that has a lower gross margin. However, we expect that to recover once the on-site analysis of the nuclear fuel from the larger orders ramp-up. Studsvik continued to decrease its debt level in Q3 and ended the quarter with a net cash position of SEK 7.5m.

Higher energy prices caused by insufficient supply have put nuclear power in a new light and we continue to see life-time extensions of active reactors in both Europe and North America and there will be a lot of new nuclear plants built in the coming years. For example, Studsvik order wins in the F&MT segment are from countries that intend to add additional capacity in the future and will lead to business opportunities.
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