Lamor Half-Year Financial Report 2024: Lamor’s strengthened strategic position supports growth in the Middle East – order book turns to growth
Lamor Corporation Plc, Company Announcement, 25 July 2024 at 09.00 a.m. EEST
Lamor’s strengthened strategic position supports growth in the Middle East – order book turns to growth
During the second quarter, Lamor significantly strengthened its position regarding environmental protection projects in Saudi Arabia. The strengthened position demonstrates the effectiveness of the company’s 'Land and expand' growth strategy in the Middle East. Revenue and profitability were below the comparison period but grew from the first quarter of the year.
This release is a summary of Lamor’s Half-Year Financial Report 2024. The complete report is attached to this release as a pdf file. It is also available on the company website at lamor.com/investors.
April–June 2024 in brief
- Revenue was EUR 27.1 million (33.8), a decrease of 19.7% from the comparison period
- EBIT was EUR 1.3 million (3.7) or 4.8% of revenue (10.8%), a decrease of 64.5%
- Adjusted EBIT was EUR 1.4 million (3.7) or 5.2% of revenue (11.0%), a decrease of 62.4%
- Net cash flow from operating activities was EUR +1.8 million (+1.1), an increase of 66.8%
- Earnings per share (basic) was EUR -0.02 (0.09)
- Orders received was EUR 69.3 million (9.6), an increase of 619.9%
January–June 2024 in brief
- Revenue was EUR 51.0 million (56.7), a decrease of 9.9%
- EBIT was EUR 1.7 million (3.8) or 3.3% of revenue (6.7%), a decrease of 55,8%
- Adjusted EBIT was EUR 1.9 million (3.9) or 3.7% of revenue (6.9%), a decrease of 52.2%
- Net cash flow from operating activities was EUR -11.3 million (-7.7)
- Earnings per share (basic) was EUR -0.03 (0.07)
- Orders received was EUR 85.3 million (20.4), an increase of 317.1%
- Order backlog at the end of the period amounted to EUR 159.1 million (163.0)
The figures in brackets refer to the comparison period, which is the same period the previous year, unless otherwise stated.
Johan Grön, CEO
For Lamor, the most important development during the second quarter was the major environmental protection project won in Saudi Arabia. The three-year service agreement worth EUR 55 million with NEOM Company is the latest demonstration of the effectiveness of our "Land and expand" growth strategy in the Middle East. The decision of the National Center for Environmental Compliance (NCEC) in April to exercise a four-month extension option for another major project also clearly highlighted our position in Saudi Arabia.
Significant bridgehead projects and the strong local customer relationships created during them form the basis for expanding our business in both existing and in new markets. At the same time, the service agreements help us further build our expertise as well as our global partner network. During the second quarter, this same expansion strategy was visible also in our successful entry into the Norwegian aquaculture industry with advanced water treatment solutions and in the way we are continuing to expand our South American soil remediation and restoration business.
The cumulative order intake during the first half of 2024 surpassed that of the full year of 2023. At the time of reporting, our sales pipeline remains extensive and we are involved in several tendering processes of different sizes, especially in the Middle East, Africa and South America. In terms of tenders, geopolitical uncertainty continues to affect Lamor in two ways. On the one hand, tensions increase the risk of accidents creating a need for environmental services. On the other hand, tensions also create financial uncertainty and instability, which may cause delays in customers' decision-making.
Revenue was below our estimates in the second quarter. The decrease from the previous year was due to postponement of tenders, anticipated lower level of deliveries in the Bangladesh project compared to the comparison period, and an update made to the Kuwait project’s total cost estimate, due to which the cumulative revenue and profitability of the project were slightly decreased. We will continue to carefully manage costs and working capital as well as optimize the cleaning process in Kuwait. This project is strategic for Lamor, as well as an important reference that is unique even on a global scale.
In terms of profitability, the decline from the comparison period was most of all the result of a lower level of revenue. We improved our operating profit margin from the first quarter of the year and, excluding the impact of the cumulative update made in the Kuwaiti project, our adjusted EBIT would have been on the comparison period’s level. That said, our profitability remains below the targeted level. We have continued to focus on improving operational efficiency and profitability as well as ensuring business scalability with the Next leap program we initiated at the beginning of the year, which has already improved cost control. The important learnings from projects will be incorporated into Lamor's global ways of working from tendering to delivery. I am confident that we have several ways to improve our efficiency. This work will continue in the second half of the year.
Key figures
EUR thousand | Q2 2024 | Q2 2023 | Change % | 1-6/2024 | 1-6/2023 | Change % | 1-12/2023 |
Revenue | 27,142 | 33,812 | -19.7% | 51,028 | 56,659 | -9.9% | 122,520 |
EBITDA | 3,036 | 5,349 | -43.2% | 5,171 | 7,194 | -28.1% | 16,182 |
EBITDA margin % | 11.2% | 15.8% | 10.1% | 12.7% | 13.2% | ||
Adjusted EBITDA | 3,074 | 5,349 | -42.5% | 5,246 | 7,194 | -27.1% | 18,464 |
Adjusted EBITDA margin % | 11.3% | 15.8% | 10.3% | 12.7% | 15.1% | ||
Operating profit or loss (EBIT) | 1,302 | 3,664 | -64.5% | 1,687 | 3,817 | -55.8% | 8,426 |
Operating profit (EBIT) margin % | 4.8% | 10.8% | 3.3% | 6.7% | 6.9% | ||
Adjusted operating Profit (EBIT) | 1,399 | 3,723 | -62.4% | 1,880 | 3,935 | -52.2% | 10,943 |
Adjusted operating Profit (EBIT) margin % | 5.2% | 11.0% | 3.7% | 6.9% | 8.9% | ||
Profit (loss) for the period | -233 | 2,404 | -626 | 1,916 | 2,679 | ||
Earnings per share, EPS (basic), euros | -0.02 | 0.09 | -0.03 | 0.07 | 0.09 | ||
Earnings per share, EPS (diluted), euros | -0.02 | 0.09 | -0.03 | 0.07 | 0.09 | ||
Return on equity (ROE) % | -0.4% | 3.8% | -1.0% | 3.0% | 4.3% | ||
Return on investment (ROI) % | 1.0% | 3.9% | 1.4% | 4.4% | 8.7% | ||
Equity ratio % | 36.2% | 47.5% | 36.2% | 47.5% | 40.0% | ||
Net gearing % | 89.9% | 36.1% | 89.9% | 36.1% | 60.7% | ||
Net working capital | 77,801 | 51,024 | 52.5% | 77,801 | 51,024 | 52.5% | 62,245 |
Orders received | 69,250 | 9,619 | 619.9% | 85,292 | 20,448 | 317.1% | 43,950 |
Order backlog | 159,108 | 163,034 | -2.4% | 159,108 | 163,034 | -2.4% | 124,192 |
Number of employees at the period end | 584 | 676 | -13.6% | 584 | 676 | -13.6% | 840 |
Number of employees on average | 608 | 658 | -7.6% | 659 | 604 | 9.1% | 658 |
Guidance for 2024 (unchanged)
In accordance with the guidance published on 16 February 2024, Lamor estimates that its revenue for the financial year 2024 will be at least at the same level as in 2023 (2023: EUR 122.5 million). Due to the uncertain market situation and uncertainty regarding the schedule of large tenders, Lamor does not provide guidance for profitability.
Events after the reporting period
The company has not had any significant events after the reporting period.
Financial calendar for 2024
Interim Report for January–September 2024 will be published on 24 October 2024.
Webcast for shareholders, analysts and media
Webcast for shareholders, analysts and media on the results for the financial period January–June 2024 will be arranged on 25 July 2024 at 10:00 a.m. EEST. The webcast includes a Q&A session, and participants can ask questions in English and Finnish via the event chat room. The webcast can be followed at https://lamor.videosync.fi/q2-2024.
A recording of the webcast will be available later at the company’s website at lamor.com/investors/reports-and-presentations.
Further enquiries
Johan Grön, CEO,
Lamor Corporation Plc,
+358 40 546 4186
Lamor in brief
Lamor is one of the world’s leading providers of environmental solutions. For four decades, we have worked to clean up and prevent environmental incidents on land and at sea.
Environmental protection, soil remediation and material recycling: Our innovative technologies, services and tailored solutions, ranging from oil spill response, waste management and water treatment to soil remediation and plastic recycling, benefit customers and environments all over the world.
We are capable of vast and fast operations thanks to our connected ecosystem of local partners, steered by our experts. We have over 600 employees in more than 20 countries. In 2023, our turnover was 123 million euros. Lamor's share is listed on the Nasdaq Helsinki (ticker: LAMOR). Further information: www.lamor.com
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