Aspo - Earnings have bottomed out

Still modest Q4 earnings, but the level is about to gain soon

Aspo’s EUR 8.0m comparable EBITA didn’t quite reach the EUR 9.1m/8.9m Evli/cons. estimates; the softness was mostly due to ESL, which saw extended demand weakness also in Q4. H1’25 is thus unlikely yet to be a very great period, however last year’s results were burdened by political strikes and challenging winter conditions to the tune of EUR 4m and hence we believe a modest profitability increase can already be seen. Gains should continue in H2 as the new green coaster fleet expands further and comparison figures are very low. Telko also saw some q/q earnings softness in Q4 due to lower volumes and seasonally higher costs, but its organic growth outlook remains positive. 

ESL and Telko to drive significant earnings growth this year

We estimate Aspo FY’25 comparable EBITA to gain almost EUR 13m y/y, driven by ESL (up EUR 7.5m y/y) and Telko (EUR 5.0m y/y). ESL’s improvement pace is still a source of uncertainty as low demand persists in many key customer industries, but last year’s weak comparison volumes and EUR 4m in extraordinary costs suggest meaningful upside potential already this year. Meanwhile the new green coasters could add roughly EUR 5m to FY’25 earnings. There has also been progress with the latest vessel investment program, as at least one green handy will be sold to pool investors. Telko’s acquisitions have already showed results, and their integration continues this year. 

Multiples modest relative to mid-term earnings potential

FY’25 will still not be a great year for ESL’s earnings as outlook seems only now to be stabilizing. We estimate less than EUR 25m FY’25 EBITA for ESL vs the EUR 38m FY’22 figure. ESL thus has plenty of potential for further gains in the years to come as the fleet is renewed and demand picks up again. We estimate ESL to near EUR 30m EBITA next year. For Telko we estimate some EUR 17.5m FY’25 EBITA, while there should be potential for well above EUR 20m. We don’t view Aspo’s 9x EV/EBIT multiple on our FY’25 estimates high as earnings should have room to gain next year as well. We retain our EUR 6.0 TP as our rating is BUY according to the updated rating methodology (see p. 3).