Solteq - Lowers 2022 guidance
Solteq issued a profit warning, lowering both its guidance for revenue and operating profit by a notch. Revenue in 2022 is now expected to grow (prev. grow clearly) and operating profit to weaken (prev. improve).
- Solteq’s new guidance for 2022: Solteq Group’s revenue is expected to grow and profit to weaken.
- Previous guidance: revenue is expected to grow clearly and operating profit to improve.
- Solteq noted as reasons for the guidance downgrade the impact of higher-than-estimated investments in product development in Solteq’s Utilities business unit along with increased project delivery costs on profitability and reduced customer invoicing during the on-going financial year.
- Our estimates for 2022e revenue and operating profit have been EUR 77.0m and 7.7m respectively, implying a revenue growth of 11.6% and ~8% improvement in operating profit y/y. The new guidance implies single-digit growth and compared with our estimates an over 10% decline in operating profit in 2022e.
- The guidance downgrade is unfortunate for the near-term, but does not based on the reasons stated appear to give reason to assume that the long-term scalability drivers wouldn’t remain intact.