Svolder (SVOL) Q1 24/25 earnings summary

Executive summary

• Net result for the quarter was -469 MSEK (-198 MSEK last year), or -4.60 SEK per share (-1.90 SEK per share last year), reflecting a challenging period for the portfolio.

• Substansvärdet (NAV) decreased by 7.8% including reinvested dividends, to 52.50 SEK per share; the B share price fell 9.7% to 53.55 SEK per share.

• Dividend of 174 MSEK (1.70 SEK per share) was paid during the period.

• Portfolio performance lagged the Carnegie Small Cap Return Index, which declined 4.8% in the same period.

• MilDef was the largest positive contributor to NAV, while New Wave, Ependion, and XANO Industri were the main negative contributors.

Financial highlights

• Operating result for the quarter was -471 MSEK (-200 MSEK last year), mainly due to negative value changes in the securities portfolio.

• Earnings per share for the quarter were -4.60 SEK (-1.90 SEK last year).

• Substansvärde per share at period end was 52.50 SEK (48.30 SEK last year), with a B share price of 53.55 SEK (56.00 SEK last year).

• Cash flow from operations was 1.4 MSEK (13.5 MSEK last year); cash and equivalents at period end were 53.8 MSEK.

• Portfolio was unleveraged at period end, with a net receivable of 69 MSEK (1.3% of NAV).

Outlook and guidance

• Management remains focused on long-term value creation and expects small caps to benefit from lower interest rates and improved domestic demand.

• The company sees opportunities for small caps to recover lost ground as interest rates stabilize and real wages rise in Sweden.

• Market recovery in small caps has been driven by valuation increases rather than earnings growth, increasing short-term risk if profit estimates are not met.

• For 2025, small cap earnings are expected to grow by 22%, compared to 4% for large caps.