26.4.2024 09:00:02 EEST | Lamor Corporation Oyj | Interim report (Q1 and Q3)

Lamor Corporation Plc          Stock exchange release             26 April 2024 at 09:00 a.m. EEST 

Lamor Interim Financial Report 1 January–31 March 2024: Market activity increasing despite the geopolitical situation 

This release is a summary of Lamor’s Interim Financial Report 1 January–31 March 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. 

January–March 2024 in brief  

  • Revenue was EUR 23,9 million and 4.5% higher than in the comparison period (22,8)   
  • EBIT improved slightly from the comparison period and was EUR 0,4 million (0,2)   
  • Adjusted EBIT was EUR 0,5 million (0,2) and 2.0% of revenue (0.9%)  
  • Net cash flow from operating activities was EUR -13.1 million (-8,8)  
  • Earnings per share (basic) was EUR -0.01 (-0.02)   
  • Orders received increased by 48.1% and amounted to EUR 16,0 million (10,8)    

CEO Johan Grön’s update  

Our revenue in the first quarter of 2024 amounted to 23,9 million euros, increasing by 4.5 percent from the comparison period. The adjusted EBIT in the first quarter was approximately 0,5 million euros, and adjusted EBIT margin 2.0 percent of revenue. The first quarter revenue was in line with our expectations, and we expect the revenue level to rise as the year progresses. Our profitability did not, however, reach the expected level, and we have initiated actions to improve it. The value of new orders in the first quarter amounted to 16,0 million euros, an increase of approximately 48 percent compared to the comparison period. The most significant orders received during the reporting period were related to equipment deliveries and smaller service projects.  

The geopolitical situation has remained challenging also in 2024. The situation has escalated in certain Middle Eastern countries, and instability has also continued in certain South American countries. The circumstances in the Middle East pose severe threats to the security in the region and shipping in the Red Sea. Furthermore, the Russian war against Ukraine unfortunately still continues. In addition to the deteriorated security situation in general, these conflicts impact our business in many ways, and significantly increase for instance the risk of oil spills.

Soil remediation and restoration  

In Kuwait, the soil washing plants, used for cleaning more polluted soil, are now fully operational. Soil washing complements the cleaning capacity provided by bioremediation. The successful start of soil washing at our two large processing plants is an important milestone for our projects in Kuwait and allows us to utilise the existing technologies and facilities even after the completion of the current projects to process additional soil, for example as a subcontractor for the other main contractors.  

Lamor provides soil remediation services in Latin America and Oman, where we also won a few new, smaller-scale projects in the first quarter. The soil remediation market is currently very active, and we are involved in several other on-going tendering processes of different sizes in the Middle East, Africa, and South America.  

Environmental protection  

During the first quarter, Lamor participated in three smaller clean-up projects of environmental incidents in Peru and Ecuador. The importance of Lamor’s local presence and the response capacity in the region is of essence when an environmental incident occurs, and we aim at expanding this presence further by increasing our rental business.  

In the first quarter of 2024 we established a new entity in the Netherlands that focuses on oil spill response technologies. The entity primarily serves the European Maritime Safety Agency’s (EMSA) oil spill response preparedness in the North Sea, but with the local warehouse, our aim is to serve other European customers as well, for instance in the form of equipment rental.  

After the end of the first quarter, the Saudi Arabian National Center for Environmental Compliance decided to use their 4-month option to continue the ongoing environmental protection project. The original 3-year contract on the enhancement of the oil spill response preparedness in the Saudi Arabian coastline of the Red Sea was signed in March 2021, and Lamor will, in accordance with the extension agreement, provide the service until the end of September 2024. Our customer is currently evaluating how to maintain the preparedness service after the closing of our agreement period. 

Material recycling   

The delivery of the MARPOL port reception facility and oil spill response technologies to Bangladesh is progressing as planned. The commissioning of the waste treatment facility in accordance with the International Convention for the Prevention of Pollution from Ships in the port of Mongla is planned for the end of 2024.  

During the first quarter, we entered into an agreement with Remeo, an environmental management company, to ensure the supply of sorted plastic waste suitable as feedstock for our chemical recycling concept facility of plastic. The agreement guarantees the supply of the right kind of plastic waste to our concept facility that is being constructed in Kilpilahti, Finland, and possibly also to our future sites in Finland. We now have agreed on all the aspects of the process, from feedstock procurement to technology and the end customer. The installation of technologies is expected to begin during the latter half of the year, and the production process and plastics recycling to commence towards the end of the year 2024.  

Solutions related to water treatment in different forms are part of Lamor’s material recycling solution portfolio. In the first quarter, the Norwegian shipping company Frøy placed an order with us for a retrofitted reverse osmosis-based system to its vessel where it produces fresh water from seawater to remove harmful parasites from farmed salmons. The deal is an important indication that our wide product portfolio and partner network enables our expansion in important markets and into new business segments.  

During the first quarter, in addition to sales activities relating to large projects, we have started to systematically increase sales activities related to our equipment business by developing both the ability of our own sales network and the coverage of our agent network. This way we will ensure that in addition to and with the help of our large projects, also our basic business will reach its growth targets. This, together with the sharpened organisational operating models, supports us in achieving both our profitability and growth targets. It may take time for the effects of these reforms to become visible, and we will review our strategy and long-term financial goals during the year 2024.  

Key figures  

EUR thousand unless otherwise noted  

Q1 2024  

Q1 2023  

Change %  

1-12/2023  

Revenue  

23,886  

22,847  

4.5%  

122,520  

EBITDA  

2,135  

1,845  

15.7%  

16,182  

EBITDA margin %  

8.9%  

8.1%  

  

13.2%  

Adjusted EBITDA  

2,172  

1,845  

17.7%  

18,464  

Adjusted EBITDA margin %  

9.1%  

8.1%  

  

15.1%  

Operating profit or loss (EBIT)  

385  

153  

152.0%  

8,426  

Operating profit (EBIT) margin %  

1.6%  

0.7%  

  

6.9%  

Adjusted operating Profit (EBIT)  

481  

212  

127.1%  

10,943  

Adjusted operating Profit (EBIT) margin %  

2,0%  

0.9%  

  

8.9%  

Profit (loss) for the period  

-393  

-489  

  

2,679  

Earnings per share, EPS (basic), euros  

-0.01  

-0.02  

  

0.09  

Earnings per share, EPS (diluted), euros  

-0.01  

-0.02  

  

0.09  

Return on equity (ROE) %  

-0.6%  

-0.8%  

  

4.3%  

Return on investment (ROI) %  

0,3%  

0.2%  

  

8.7%  

Equity ratio %  

37.7%  

46.6%  

  

40.0%  

Net gearing %  

86.4%  

38.5%  

  

60.7%  

Net working capital  

77,120  

47,867  

61.1%  

62,245  

Orders received  

16,042  

10,829  

48.1%  

43,950  

Order backlog  

117,461  

188,685  

-37.7%  

124,192  

Number of employees at the period end  

754  

550  

37.1%  

840  

Number of employees on average  

710  

549  

29.3%  

658  

Guidance for 2024 

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. 

Webcast for shareholders, analysts, and media  

Webcast for shareholders, analysts and media on the results for the financial period January–March 2024 will be arranged on 26 April 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/q1-2024/register.   

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, tel. +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 

Attachments

  • Lamor interim report Q1 2024.pdf

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