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- Aspo - Supramaxes posted losses in Q2
Aspo - Supramaxes posted losses in Q2
We update our estimates for ESL Shipping
Aspo says ESL’s Q2’19 EBIT will decline y/y as the two Supramax vessels posted losses. Aspo also states main customers’ shipping volumes (e.g. SSAB) decreased substantially during the summer months, thus weakening operational efficiency. ESL reported EUR 4.3m in Q2’18 EBIT. Whereas we previously expected ESL to post EUR 4.2m in Q2’19 EBIT, we now expect the dry bulk carrier to have generated EUR 1.8m in EBIT during the quarter. We also update our estimates for the coming quarters. We previously expected ESL’s FY 2019 EBIT at EUR 19m, and now estimate EUR 16m. For FY 2020 we project EUR 23m (previously EUR 26m). There was no update concerning the two new LNG vessels, but Aspo has previously said the crane problems have now been fixed and thus we continue to expect ESL to achieve significant earnings improvement during the second half of 2019.
We leave Telko and Leipurin estimates unchanged
We are not making changes to our estimates for Telko and Leipurin this time. Our revised estimates for ESL mean we now expect Aspo to have generated EUR 5.2m in Q2 EBIT (vs EUR 7.1m a year ago). Our previous estimate stood at EUR 7.6m. We now expect Aspo to manage EUR 28m in FY 2019 EBIT (previously EUR 31m). Aspo’s new guidance range for FY 2019 EBIT is EUR 24-30m (previously EUR 28-33m).
Our updated TP is EUR 9.25 (9.75); new rating HOLD (BUY)
Following our model update we now expect Aspo to post EUR 40m in EBIT next year. Our new TP is EUR 9.25 (9.75), reflecting lower SOTP valuation. Our rating is now HOLD (BUY).