Equity Research Enrad, Q4 2024: Increased costs due to high pressure

Today on 28 February, Enrad AB (“Enrad” or “the Company”) published its interim report for Q4 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 of SEK 14.8 million in Q4 2024 exceeded our net revenue estimate of SEK 14.0 million by 6%. Management sees continued strong growth in Q1 2025.
• The gross profit of SEK 5.5 million in Q4 2024 was 25% lower than our estimate for SEK 7.3 million. The low gross margin of 37% compared to our estimate of 52% is explained by strategic low-margin sales and an inventory write-down.
• Q4 2024 EBIT amounted to minus SEK 0.6 million, compared with our estimate of SEK 3.3 million. The total profit deviation from our estimate of SEK 3.9 million can be divided into SEK 1.8 million at the gross profit level and a further SEK 2.1 million in other external costs, personnel costs and depreciation. Enrad expanded both production and personnel during the period.
• The Company’s cash and cash equivalents on December 31, 2024, amounted to approximately SEK 4.7 million, which was approximately the same as on September 30, 2024.
• At the end of the fourth quarter of 2024, Enrad had cash tied up in receivables and inventories of approximately SEK 26 million. As of December 31, 2024, the company’s inventory was pledged to one of the main owner companies, Weland Ståhl, for approximately SEK 11 million.

We intend to release an updated research report on Enrad shortly.

Read our latest Research Update 

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