First impression Zazz Energy, Q2 2022: A report with a strong signal of value

Equity Research, Zazz Energy

Today, Zazz Energy published its interim report for the second quarter of 2022. Below is a summary of our first impressions of the report’s outcome and the income statement’s deviations from our estimates.

• Net sales in the first quarter of Zazz Energy S.A. amounted to SEK 4.0 million. Our estimate was SEK 3.6 million. The outcome was thus 13 per cent above our expectations. We may have been somewhat conservative in terms of uptime and efficiency utilization. The operations in Greece under Zazz Energy S.A. will be consolidated into Zazz Energy of Sweden AB in the third quarter of 2022.
• Including sales reported for Zazz Energy S.A., the EBITDA result was minus SEK 0.1 million. Our estimate was minus SEK 0.6 million. Operating profit came in at minus SEK 0.4 million compared to our estimate of minus SEK 0.7 million.
• Including sales from Zazz Energy S.A., the EBITDA result amounted to minus SEK 0.1 million. Our forecast was minus SEK 0.6 million. Operating profit came in at minus SEK 0.4 million compared to our estimate of minus SEK 0.7 million.
• Including sales from Zazz Energy S.A., the profit before tax was minus SEK 2.4 million. Our estimate was minus SEK 0.8 million.

Based on reported revenues and gross margin during the first six months of the year, the report has a critical signal value as it becomes clear that Zazz Energy has a business model that works. Net finances amounted to minus SEK 2.0 million. The lion’s share of this item was one-off. The challenge now is to scale up operations in Greece. As stated in the report, several projects are intended to be initiated in the current quarter.

We intend to provide an updated research report on Zazz Energy shortly. Read the initial coverage report here (SE).

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