Enersense International Plc | Business review Q3/2024 | October 28, 2024 at 12:30:00 EET
The figures in this release are unaudited. The figures in brackets refer to the comparison period (the corresponding period of the previous year), unless otherwise stated. All figures and amounts have been rounded off from exact figures, which may result in minor inaccuracies in additions or subtractions.
The Group's core business operations include the mechanical project business, the electrical and automation business and the operation and maintenance business in the Industry segment, and the design, construction and maintenance of transmission grids and substations, as well as wind and solar farms, in the Power segment. The Connectivity segment's business operations as a whole - the design, construction and maintenance of fixed and wireless telecommunications networks - are included in the Group's core business operations.
July-September 2024
- Revenue EUR 111.5 (94.2) million, 18.4% year on year.
- EBITDA EUR 8.6 (3.9) million, EBITDA margin 7.7 (4.2)%.
- Revenue from core businesses EUR 90.9 (89.6) million.
- Adjusted EBITDA for core businesses EUR 9.0 (5.0) million.
- Operating profit EUR 6.1 (1.6) million, profit margin 5.5 (1.7)%.
- Undiluted earnings per share EUR 0.19 (-0.05).
- On 23 September 2024, Kari Sundbäck started as the CEO of the company.
- On 20 September 2024, Enersense announced having signed an agreement with Boliden, a Swedish metal company, concerning an extensive development project related to the Odda production plant in Norway. The agreement covers the installation and manufacture of process pipelines in the same areas where Enersense has been carrying out equipment and steel installation work since 2023. The agreement will be recognised in the Industry segment's fourth-quarter order book.
January-September 2024
- Revenue EUR 310.5 (255.5) million, 21.5% year on year.
- EBITDA EUR 3.6 (7.0) million, EBITDA margin 1.2 (2.8)%.
- Revenue from core businesses EUR 252.8 (243.0) million.
- Adjusted EBITDA for core businesses EUR 16.9 (10.6) million.
- Operating profit EUR -4.0 (-0.1) million, profit margin -1.3 (0.0)%.
- Undiluted earnings per share EUR -0.98 (-0.39).
- Order backlog EUR 353 (511) million at the end of September. Especially the order books of the Industry and Connectivity segments decreased from the comparison period.
After the review period:
- On 14 October 2024, Enersense announced that The European Patent Office (EPO) had granted a European patent for the gravity-based base solution for an offshore wind power plant developed by the company.
- On 9 October 2024, Enersense announced having won a contract in Fingrid's public bidding process for the construction of new substations in Lemmensaari and Sydänmaa. The project will employ Enersense until the end of 2026. The value of the contract is approximately EUR 13 million and it was recognised in the order book of the Power segment for the third quarter of 2024.
- On 11 October 2024, Enersense announced having signed an agreement with Telia Towers Finland Oy, a Finnish mast and equipment infrastructure owner, on the maintenance of mast and equipment room infrastructure. The four-year agreement includes maintenance work on Telia Towers' mast and equipment room infrastructure throughout Finland and will be recognised in the order book of the Connectivity segment for the fourth quarter of 2024. The cooperation can be continued with two one-year options.
Guidance for the 2024 financial period (issued on 1 August 2024)
In 2024, Enersense's revenue is expected to be in the range of EUR 365-390 million and EBITDA in the range of EUR 4-8 million. Adjusted EBITDA in the core businesses is forecast to be in the range of EUR 17-21 million.
In 2024, revenue is expected to grow. The EBITDA is expected to improve in the latter part of the year, taking normal seasonal variation into account, following the measures to improve profitability.
The financial guidance does not take into account any divestments that may result from the strategic assessment
Key figures
| 7-9/2024 | 7-9/2023 | Change-% | 1-9/2024 | 1-9/2023 | Change-% | 1-12/2023 | |
| Revenue, (EUR 1,000) | 111,503 | 94,168 | 18.4 | 310,470 | 255,491 | 21.5 | 363,318 |
| EBITDA, (EUR 1,000) | 8,632 | 3,945 | 118.8 | 3,595 | 7,049 | -49.0 | 14,704 |
| Core business | 8,640 | 4,336 | 7,832 | 10,646 | 14,925 | ||
| Non-Core business | -8 | -392 | -4,236 | -3,599 | -221 | ||
| EBITDA, % | 7.7 | 4.2 | 1.2 | 2.8 | 4.0 | ||
| Adjusted EBITDA, Core business, (EUR 1,000) | 8,980 | 5,030 | 16,872 | 11,503 | 18,386 | ||
| Operating profit, (EUR 1,000) | 6,105 | 1,597 | n.a | -3,981 | -51 | n.a | 5,260 |
| Operating profit, % | 5.5 | 1.7 | -1.3 | - | 1.4 | ||
| Result for the period, (EUR 1,000) | 3,663 | -1,129 | n.a | -15,562 | -6,793 | -129.1 | -9,149 |
| Equity ratio, % | 18.3 | 26.8 | 18.3 | 26.8 | 26.0 | ||
| Gearing, % | 117.8 | 72.7 | 117.8 | 72.7 | 70.2 | ||
| Return on equity, % | 8.1 | -1.9 | -34.3 | -11.5 | -16.0 | ||
| Earnings per share, undiluted, EUR | 0.19 | -0.05 | -0.98 | -0.39 | -0.54 | ||
| Earnings per share, diluted, EUR | 0.19 | -0.05 | -0.98 | -0.39 | -0.54 |
CEO Kari Sundbäck
After a challenging first half of the year, Enersense had an encouraging third quarter. Revenue in July-September increased by 18% from the comparison period and amounted to EUR 111.5 million. The growth was primarily driven by the Industry segment's higher service and project business volumes and the favourable development of the Connectivity segment's project business related to the construction of optical fibre networks.
Our efficiency programme is progressing as planned, and our systematic work to improve profitability is bearing fruit. After a loss-making second quarter, the Group's EBITDA returned to positive and amounted to EUR 8.6 (3.9) million in the third quarter. Profitability improved in all segments. The businesses subject to a strategic assessment were loss-making in the early part of the year, but in the third quarter, their combined result was zero (EUR -0,4 million Q3/2023), for which I would like to thank the entire personnel of the units.
At the end of the review period, the Group's order backlog stood at EUR 353 (511) million. The Industry segment's order backlog decreased due to some long-term customer projects being close to completion. Although the construction of optical fibre networks continued at a good level, the Connectivity segment's order backlog was particularly impacted by continued caution of telecom operators, especially in terms of mobile network investments. There were delays in some investment decisions in renewable energy, which had an effect on the Power segment's order backlog. Additionally, in the comparison period, the segment's order backlog was exceptionally high as a result of electricity distribution system synchronisation projects between the Baltic countries and Europe.
We entered into significant contracts
During the third quarter, we entered into significant agreements, including the one with Boliden, a Swedish metal company, for an extensive development project related to the Odda production plant in Norway. After the review period, we announced a four-year contract with Telia Towers Finland Oy on the maintenance of their mast and equipment room infrastructure, and an agreement with Fingrid on the construction of new substations in Lemmensaari and Sydänmaa.
Strategic assessment progressing as planned
In June, we announced that we would focus on our core businesses, which provide project and service operations for the green energy transition, and would carry out a strategic assessment of our businesses related to onshore wind power and solar energy project development, offshore wind power, and zero-emission transport solution development. The strategic assessment is progressing as planned, and we will report the results once the assessment has been completed.
We will continue to systematically implement our strategy to improve profitability
I started as the CEO of Enersense in late September. During my first few weeks here, I have sought to meet as many customers as possible and get to know our own teams. I am impressed by our people's expertise and commitment to serving our customers. As one of our customers put it, "Enersense has a positive attitude and drive that cannot be found elsewhere in Finland". We have a lot of positive and innovative spirit on which to build a good future.
We innovate in sustainability together with our customers. It is an essential part of our focus on our core business: the development of high-quality services that enable a sustainable green energy transition for our partners in the energy, telecommunications and industrial sectors, primarily in Finland and the Baltic countries. A prime example of this is the European patent granted by the European Patent Office for the gravity-based base solution we developed for offshore wind power plants.
During the rest of the year, we will focus on completing the strategic assessment we announced in June, and on sharpening our strategy for the selected core businesses, improving the company's profitability and increasing shareholder value.
I would like to thank everyone at Enersense for an encouraging third quarter. I would also like to take this opportunity to thank Juha Silvola, who led Enersense as its interim CEO for almost the entire third quarter and now serves as the head of the Power and Connectivity segments. My thanks also go to our customers, partners and investors. With determination, Enersense will continue to focus on serving its customers and further developing its operations in line with its strategic guidelines.
This release is a summary of Enersense's January-September 2024 Business Review. The complete report is attached to this release as a pdf file. It is also available on the company's website at www.enersense.com/press-releases/reports-and-presentations/.
ENERSENSE INTERNATIONAL PLC
Kari Sundbäck
CEO
More information:
Kari Sundbäck
CEO
Tel. +358 50 464 7704
Email: kari.sundback@enersense.com
Jyrki Paappa
CFO
Tel. +358 50 556 6512
Email: jyrki.paappa@enersense.com
Media contacts:
Liisi Tamminen
Head of Communications and Sustainability
Tel. +358 44 222 5552
Email: liisi.tamminen@enersense.com
Distribution:
Nasdaq Helsinki
Major media
www.enersense.com
About Us
Enersense International Plc is a creator of zero emission energy solutions and strongly supports the ongoing energy transition and enabling a zero-emission society. Enersense Group's revenue in 2023 was EUR 363 million. The company has approximately 2,000 employees, with operations in Finland and internationally. Enersense's shares are listed on Nasdaq Helsinki (ESENSE). The company's investor pages can be found at www.enersense.com/investors.
