Meriaura Group Q3’24 preview: Growth powered by Renewable Energy

Translation: Original published in Finnish on 10/28/2024 at 7:39 am EET.

Meriaura Group will report its Q3 interim results on Thursday, October 31. We expect the group's revenue to have grown significantly, driven by Renewable Energy. We believe that the outlook for Marine Logistics is stable. We expect the operating performance to have strengthened from the comparison period, but we estimate that financial expenses and minority shares have weighed on the reported net result.

Growth projected for Q3 to come from Renewable Energy

We estimate Meriaura Group's Q3 revenue to have been 19.5 MEUR, a significant increase of 25% year-on-year. Most of the growth will come from Renewable Energy, as we forecast only moderate growth of 3% for Marine Logistics. We estimate Renewable Energy revenue at 3.5 MEUR (Q3'23: 0.2 MEUR), which includes approximately 2 MEUR of revenue from solar thermal projects (former Savosolar) and approximately 1.5 MEUR from the supply of solar power solutions, which were added to the company's offering through the Rasol acquisition in late 2023. Renewable Energy revenue can surprise in both directions, as forecasting quarterly revenue is challenging due to the inherent project nature and the lack of comparison figures for Rasol. For Marine Logistics, the company described in its Q2 report that the demand outlook is stable and the order book is strong.

Earnings level should improve, supported by growth

For Q3, we estimate an EBITDA of 2.1 MEUR (Q3'23: 1.7 MEUR) and an EBIT of 0.6 MEUR (Q3’23: 0.3 MEUR). In Marine Logistics, we anticipate an improved EBIT of 1.2 MEUR (Q3’23: 1.0 MEUR), supported by a stable cost environment and moderate growth. In Renewable Energy, we forecast an EBIT of -0.4 MEUR (Q3'23: -0.7 MEUR). The Renewable Energy result is supported by higher, albeit low-margin, revenue from solar thermal projects. We also expect Rasol to make a small positive contribution to the Renewable Energy result. Our negative earnings forecast for the Renewable Energy unit is based on the assumption that delivery volumes and margins in the solar thermal business are not yet sufficient to cover the fixed costs of the business. We project an operating result of -0.15 MEUR for the Other line of the group’s expenses. Our forecast for the group's net result is 0.0 MEUR, influenced by, among other things, financial expenses (estimated impact of -0.4 MEUR) and minority share (estimated earnings impact of -0.2 MEUR). The minority share relates to the sale of approximately one fifth of Marine Logistics (Meriaura Oy) to Meriaura Invest, the group's largest shareholder, at the beginning of July.

We expect Renewable Energy to continue to drive growth in the coming years

Meriaura Group does not provide numerical guidance, but we expect the company's verbal guidance to continue along the same lines as in the past. We expect the demand outlook for both Marine Logistics and Renewable Energy to remain stable. The solar thermal power plant orders announced in the past year will enable significant growth in 2024 and at least a similar level of revenue in 2025, too. If new solar thermal deliveries are won later this year or in early 2025, solar thermal revenue could continue to grow during 2025. For 2025, we forecast 46% growth for the solar thermal business and 33% growth for Renewable Energy as a whole, assuming Rasol grows at a steady 5%. We forecast Marine Logistics' revenue to grow at a steady 4% in 2025.