Arendals Fossekompani (AFK) Q3 2024 earnings summary

Executive summary

• Group revenues grew 5% year-over-year to NOK 909m in Q3 2024, driven by strong results from Volue and NSSLGlobal, but operating profit declined 9% to NOK 51m due to normalizing power prices and higher costs.

• Major portfolio realignment included the sale of Vergia, the Volue transaction, and insolvency of Commeo Germany, focusing on core businesses and value creation.

• Dividend of NOK 1.00 per share declared for Q3 2024, to be paid in November.

Financial highlights

• Revenues: NOK 909m (Q3 2023: NOK 866m), up 5% year-over-year; operating profit: NOK 51m (Q3 2023: NOK 56m), down 9% year-over-year.

• Net cash proceeds of NOK 1bn from Volue transaction to be received in Q4.

• Operating cash flow improved to NOK 158m (Q3 2023: NOK 60m); NIBD at NOK 1,171m.

• Solid balance sheet with available liquidity of NOK 1,876m as of 30.09.2024.

• Share price up 20% year-over-year to NOK 165.4; market cap NOK 9.1bn.

Outlook and guidance

• Group expects higher revenues in 2024, but lower operating profit compared to 2023, mainly due to normalized electricity prices and reduced hydropower profits.

• Volue anticipates both revenues and operating profit to be higher in 2024, with a 15% long-term organic growth target and ongoing M&A activity.

• Tekna expects flat or slightly improved revenues and improved operating profit in 2024.

• ENRX and NSSLGlobal expect 2024 revenues in line or higher than 2023, with stable operating profit.

• Short to medium term focus on value realization in existing portfolio; no significant new AFK-level investments expected.