Kreate Group Oyj: Sustained Profitability Amid Revenue Decline - A Financial Analysis
An analysis of Kreate Group Oyj's latest financial report reveals a mixed picture of profitability growth against a backdrop of declining revenue.
Sammanfattning
Kreate Group Oyj's Q3 2024 report shows a continued increase in EBITA profitability despite a decline in revenue. The company's strategic focus on selective project offerings and expansion in Sweden is evident, with significant projects won in both Finland and Sweden. However, the order backlog has decreased, reflecting market challenges and strategic choices. The long-term outlook remains positive, with expectations of market recovery in 2025.
Kreate Group Oyj: Sustained Profitability Amid Revenue Decline - A Financial Analysis
Kreate Group Oyj, a leading Finnish infrastructure construction company, has released its interim report for January–September 2024. The report highlights a continued increase in EBITA profitability despite a year-long decline in revenue, marking the fourth consecutive quarter of profitability growth. The company's strategic focus on selective project offerings and expansion into the Swedish market is evident in its recent project wins.
Key Performance Indicators
| KPI | 7-9/2024 | 7-9/2023 | 1-9/2024 | 1-9/2023 |
|---|---|---|---|---|
| Order backlog (EUR million) | 153.1 | 221.8 | 196.3 | - |
| Revenue (EUR million) | 77.6 | 88.3 | 200.0 | 239.8 |
| EBITDA (EUR million) | 4.7 | 4.0 | 10.4 | 9.1 |
| EBITA (EUR million) | 3.1 | 2.9 | 6.0 | 5.1 |
| Operating profit (EUR million) | 3.1 | 2.8 | 5.9 | 4.9 |
| Net debt (EUR million) | 28.5 | 32.9 | 16.8 | - |
| Earnings per share, diluted (€) | 0.20 | 0.16 | 0.30 | 0.26 |
KPI Changes
| KPI | Change (%) |
|---|---|
| Order backlog | -25.0 |
| Revenue | -12.1 |
| EBITDA | +17.5 |
| EBITA | +6.9 |
| Operating profit | +10.7 |
| Net debt | -13.4 |
| Earnings per share, diluted | +25.0 |
Conclusion
The latest financial results from Kreate Group Oyj indicate a strategic shift towards improving profitability through selective project offerings and geographic expansion, particularly in Sweden. While revenue has declined, the company's ability to secure large-scale projects and its focus on demanding infrastructure projects have supported EBITA growth. The decrease in the order backlog reflects both market challenges and deliberate strategic choices. The long-term outlook remains robust, with expectations of market recovery starting in the second half of 2025. Investors should consider the company's strategic positioning in a transitioning infrastructure market.
Källa
Sammanfattning
Kreate Group Oyj reported its interim results for January–September 2024, highlighting a continued increase in EBITA profitability for the fourth consecutive quarter, despite a decline in revenue. The EBITA profitability for Q3 2024 was 4% of revenue. The company secured a major project with GRK for the Vantaa tram and expanded its operations in Sweden with new contracts, indicating strong business prospects. Kreate's order backlog at the end of Q3 was EUR 153 million, down nearly 25% from the previous quarter, reflecting strategic selectivity and market conditions. The company expects a positive market shift in Finland by H2 2025, while the outlook in Sweden remains favorable. Kreate's full-year 2024 revenue is projected to decline to EUR 270–300 million, with an increase in EBITA to EUR 8–11 million. The long-term outlook for the infrastructure sector is positive, driven by urbanization, rail traffic shifts, and the green transition. Kreate will hold a live webcast on October 25, 2024, to discuss the results.