Equity research Enrad, Q2 2024: Very strong quarter

Today, Friday 30 August, Enrad AB (“Enrad” or the “Company”) published its interim report for Q2 2024. Below is a summary of our first impressions of the report’s outcome and the income statement’s deviation from our forecasts.

• Net sales amounted to SEK 12.6 million in Q2 2024. Exceeding our estimate of SEK 10.0 million by 26.3 percent.
• Prior to the Q2 2024 report, Enrad had issued press releases in May, June and July about orders received totalling approximately SEK 13.2 million. In the Q2 2024 report, this is increased to SEK 16.3 million in orders received in Q2 2024 and a further SEK 2.2 million so far in Q3 2024.
• Gross profit after purchases of raw materials and supplies amounted to SEK 6.7 million, compared with our estimate of SEK 5.0 million. The gross margin was 53% in Q2 2024, compared with 43% in Q2 2023.
• Other external and personnel costs amounted to approximately SEK 5.3 million, compared with our estimate of SEK 3.8 million.
• EBIT amounted to SEK 0.8 million, compared with our estimate of SEK 0.7 million.

Enrads cash and cash equivalents amounted to SEK 3.2 million per June 30, 2024. Capital tied up in inventories and receivables amounted to just below SEK 27 million, while the inventories of approximately SEK 14.5 million were pledged for approximately SEK 10 million. Some cash should therefore be released during the third quarter of 2024 when customer invoices are paid.

At first glance, we see Enrad’s Q2 2024 results as very strong.

We intend to update our analysis of Enrad shortly.

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