Nordecon (NCN1T) Q3 2024 earnings summary

Executive summary

• Revenue for the first nine months of 2024 reached €178.7 million, up 37% year-over-year, with significant gross margin improvement to 7.1% from 3.3%.

• Operating profit for the period was €7.0 million, reversing a loss of €0.5 million in the prior year.

• EBITDA rose to €9.2 million from €1.8 million year-over-year.

• Order book grew 11% to €195.6 million as of 30 September 2024, with significant new contracts in both building and infrastructure segments.

• The group exited the concrete work and Finnish markets in December 2023, focusing on core services and project management.

Financial highlights

• Net profit for 9M 2024 was €4.55 million, compared to a loss of €2.77 million in 9M 2023.

• Earnings per share improved to €0.11 from -€0.08 year-over-year.

• Gross profit increased to €12.8 million (9M 2023: €4.3 million).

• Administrative expenses rose 16% to €5.01 million, but the expense-to-revenue ratio decreased to 3.1%.

• Cash and cash equivalents at period end were €11.5 million (30 Sept 2023: €13.9 million).

Outlook and guidance

• Strategic agenda targets at least 5% annual revenue growth and operating margin consistently above 3%.

• Management expects revenue to increase in 2024 compared to 2023, focusing on cost management and leveraging competitive advantages in pre-construction and design.

• Focus remains on organic growth, efficiency, digitalization, and balanced order books.

• Plans to deliver strong dividend yield and increase operating profit per employee to at least €10,000 per year.

• The construction market in Estonia is expected to continue contracting into 2025, with weak demand and high competition.