Borgestad (BOR) Q2 2024 earnings summary

Executive summary

• Profit before tax reached MNOK 32.7 in Q2 2024, up from MNOK 2.2 in Q2 2023, driven by higher EBIT and margin improvements, especially in the refractory segment.

• EBIT margin for Höganäs Borgestad Group was 10.5% in Q2 and 6.0% YTD 2024, compared to 3.0% and 1.8% in 2023.

• Increased ownership in Höganäs Borgestad Group to 69.7% during the quarter.

• Binding agreement to sell Gunnar Knudsens veg 144 (headquarters) for NOK 10 million, with completion expected in October 2024 and an estimated gain of NOK 7 million in Q4.

• Focus on real estate (Agora Bytom) and refractory operations, with ongoing operational enhancements and strategic investments.

Financial highlights

• Q2 2024 revenue was NOK 336.7 million, up from NOK 316.7 million in Q2 2023.

• EBITDA for Q2 2024 was NOK 45.2 million, compared to NOK 17.6 million in Q2 2023.

• Net interest-bearing debt reduced to MNOK 355.4 as of 30.06.24, down from MNOK 737.7 a year earlier.

• Available liquidity at period end was MNOK 142.8, up from MNOK 59.4 at 30.06.23.

• Equity ratio improved to 52% at June 30, 2024, from 34% a year earlier.

Outlook and guidance

• Management expects continued EBIT margin improvement in the refractory segment and stable performance in real estate.

• Revenue and EBITDA for Agora Bytom expected to remain stable.

• Exploring transformational M&A and liquidity events for Agora Bytom, with no urgency to transact.

• Inventory and receivables expected to decrease in H2, following seasonal patterns.

• Agora Bytom cost-cutting program to deliver full-year effect from 2025.