Equity Research Enrad, Q4 2023: Twice as good results as expected

Today Enrad published its Q4 2023 results. Below are our initial impression, along with deviations from our forecasts.

• Net sales of approximately 18.6 MSEK during the fourth quarter were 31% better than our forecast before the report.

• Gross profit after purchasing goods and services was approximately SEK 9.1 million, compared with our forecast of approximately SEK 6.9 million. The gross margin was 49% compared with our forecast of 48%.

• Other external and personnel costs amounted to approximately SEK 4.3 million, compared with our forecast of approximately SEK 4.5 million.

• Operating profit after depreciation and amortisation was around SEK 4.4 million, compared with our estimate of around SEK 2.1 million. The operating margin was 24%, compared with our expectation of 15%.

• The company’s cash amounted to SEK 6.4 million. Management believes that the company should be able to continue its operations without external capital contributions throughout 2024 (except for the possibility of borrowing for customer factors from the main owner).

• According to the CEO’s comments, it appears that the level of enquiries from customers for new orders is stronger than ever. At the same time, however, there is a certain inertia in customers’ decisions due to budget constraints, which has affected Enrad’s order intake. So far, an order worth SEK 1.2 million has been announced for 2024 through the company’s Finnish wholesaler, Coolfors Oy.

We intend to return shortly with a full follow-up to Enrad’s Q4 2023-report.

Read our Initiation-of-Coverage report here

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