I-tech: Q3 impacted by weaker market conditions - ABG

Sales -18% vs. ABGSCe, EBIT SEK 11m vs. ABGSCe 16m* Newbuild market down 50% y-o-y, affecting growth * Sizeable customer has reduced planned volumes for '25 Q3 results Q3 sales came in lower than expected at SEK 41m (-18% vs. ABGSCe 50m). The company writes that the overall conditions in the shipping industry are still positive, but highlights that newbuild contracting has dropped by 50% y-o-y. As a result, even though existing customers are buying more and volumes are rising, the slowdown in new shipbuilding has limited overall growth. Moreover, the company writes that a sizeable customer has reduced their planned volume offtake for '25 due to financial constraints. EBIT was SEK 11m (-32% vs. ABGSCe 16m), for a margin of 27% (ABGSCe 32%). The gross margin was 57% (vs. ABGSCe 58%), with a small impact due to customer and product mix. FCF lease adj. came in at SEK 23m (vs. ABGSCe 12m). Estimates and outlook On numbers alone, '25e-'27e sales change by -5%, and EBIT adj. changes by -9%. We expect the weaker newbuild contracting conditions to continue to impact growth going forward. However, we anticipate that I-Tech will continue to increase its market share. The company also states that it will announce new partnerships in the coming quarter and that it is pursuing ongoing activities to improve margins in the future. We therefore believe that there is potential for continued improvement in gross margins. Regarding the regulatory process the company gave an updated timeline and writes that more clarity regarding the next step of process is still expected during the coming quarter. Valuation The share has returned -11% L3M (vs. peer median -14% and OMXSSMAC -1%), and is currently trading at 23x-14x '25e-'27e P/E on our pre-report estimates vs. the peer median of 47x-19x. The company will host a presentation of the Q3 results at 10:30 CEST.