Meriaura Group Q1 morning result: A challenging quarter as expected, but outlook pretty positive

Translation: Original comment published in Finnish on 5/3/2024 at 9:17 am EEST.

Meriaura Group reported its Q1 interim results this morning. While revenue slightly exceeded our expectations, the result was somewhat below our forecast. As expected, difficult weather conditions and strikes hampered business in the first months of the year. However, the business outlook is quite positive judging by the order book.

Marine Logistics revenue exceeded our estimates

Meriaura Group's revenue for Q1 amounted to 17.9 MEUR, an increase of 11% year-on-year. Revenue exceeded our forecast by 3%, driven by higher-than-expected revenue in Marine Logistics (Q1: 15.9 MEUR). Renewable Energy's revenue of 1.9 MEUR was below our forecast. According to the company, ice conditions and strikes reduced dry cargo revenue and efficiency, as we had anticipated. However, project vessel utilization rates remained good in Q1 and the share of project shipments was slightly higher than usual. Midway through Q1, Meriaura rented a new project vessel to accommodate the order book for the spring and early summer. Although the cold winter also hampered solar power installations by Rasol, which was acquired at the end of 2023, the solar thermal project delivered by Meriaura Energy in Bad Rappenau, Germany, has progressed as planned.

Result slightly below our expectations

In Q1, EBITDA was 1.2 MEUR (5% below our forecast) and EBIT was -0.2 MEUR (our forecast was -0.1 MEUR). The result was therefore slightly below our forecasts. The result was burdened by inefficiencies in Marine Logistics due to strikes and weather conditions, as well as the low volume of solar power deliveries by Rasol due to weather conditions, among other factors. Q1 is seasonally a slightly weaker quarter for Marine Logistics due to the timing of the fairway dues.

The company is optimistic about its business outlook

Meriaura Group expects the demand for marine logistics services and renewable energy solutions to continue at a good level. This expectation is based on a strong order book in Marine Logistics and on customers’ interest in low-emission transport. The company also sees customer interest in the renewable energy market developing positively, supported by stricter emission requirements and expectations of lower interest rates. On Thursday evening, the company announced a new solar thermal project of around 5 MEUR in Lübeck, Germany, which supports our upward revenue forecasts for the Renewable Energy business. Rasol's order book is also described as reasonably good, although snow conditions and strikes slowed down deliveries in Q1.