NRC Group (NRC) Q2 2024 earnings summary

Executive summary

• Q2 2024 marked by weak financial performance due to NOK 160 million downward adjustments, mainly from project write-downs and legal disputes, including the ETM rail project and Finnish operations.

• Revenue stable at NOK 1,747 million compared to NOK 1,797 million in Q2 2023; EBIT adj. margin dropped to -5.1% from 3.6%.

• Management strengthening and improvement programs underway, with new MDs in Norway and Sweden; Sweden continues transformation.

• Strategic roadmap for 2024–2028 targets NOK 10 billion revenue and >5% EBIT adj. margin by 2028, despite 2024 setbacks.

• Liquidity measures under consideration, including a potential share issue and ongoing discussions with bondholders.

Financial highlights

• EBIT adj. at NOK -88 million, down from NOK 65 million in Q2 2023, driven by project write-downs and legal issues.

• Net loss of NOK 785 million in Q2 2024, including NOK 650 million goodwill impairment.

• Operating cash flow at NOK 7 million, significantly lower than NOK 107 million in Q2 2023.

• Order backlog at NOK 7.8 billion, down 3% YoY; book-to-bill ratio 0.8x.

• Equity ratio at 35%, down from 44% YoY.

Outlook and guidance

• 2024 expected to be a setback year, but long-term targets reaffirmed: >5% margin and NOK 10 billion revenue.

• 2024 revenue target ~NOK 6.5 billion with EBIT adj. margin between -0.9% and -1.5%; improvement expected towards 2028.

• 2025 target: revenue ~NOK 7.0 billion, EBIT adj. margin >2%, with gradual margin improvement through 2028.

• High tender pipeline (NOK 29 billion) and strong governmental investment support future growth.