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What is adjusted EBITDA and why should this key figure be treated with caution?
Attention – that’s why it’s so important to look at the annual report or semi-annual report
Why do companies sometimes exclude sub-areas from their numbers?
You will receive answers to these questions today from small caps expert Marco Messina, the moderator of SD TALK.
The Palfinger (WKN: 919964) share does not benefit from the very good half-year figures, it loses -1. 7% and is currently at €26. Since the high of €32 in March, it has lost -17%. Is this decline justified? And what does that mean for investors?
After the strong first quarter, the second quarter was also very good. Overall, the best sales and earnings figures in the company’s history were achieved in the first half of the year.
Sales improved by 16. 9% to €1. 21 billion. Growth in North america was particularly strong. In order to be able to serve the us market better, a new headquarters is built in Schaumburg (US state of Illinois). However, the success is also based on other factors such as a good product mix and higher sales prices.
The earnings situation improved disproportionately. Operating EBIT rose by 38. 7% to €111. 3 million, resulting in an EBIT margin of 9. 2%. This corresponds to an improvement of 1. 5 percentage points compared to the same period of the previous year. Group earnings exploded by 61. 5% to €63. 3 million.
The Austrian company is also confident for the second half of the year, thanks to the high order backlog. Accordingly, an annual turnover of 2. 4 billion euros should be achieved. A more cautious figure of €200 million is expected for EBIT.
By 2027, sales should be €3 billion and the EBIT margin should then be 10%. In my view, this is a conservative forecast.
In the half-year report, the Management Board describes the expectations as follows:
Against the background of a strong first half of the year and our order backlog, we are aiming for sales of €2. 4 billion and an EBIT of €200 million for the full year 2023, despite the macroeconomic and geopolitical uncertainties.
Order intake declined
The crane and hoist manufacturer’s products are very dependent on the economy, especially the construction industry. Cooling is expected here. This has already had an impact on incoming orders in the EMEA market.
In order to compensate for the decline here, increased investments are being made in North america. A further dynamic course of business is expected there.
How is the price drop to be evaluated?
The decline of around -17% since March is mainly due to the weaker construction sector and not to business development. The declining order development in the EMEA market is overestimated here, this is offset by the development in other markets. Nevertheless, it leads to a negative attitude among market participants.
From my point of view, the decline should be viewed positively, as it created a more favorable starting point. Overall, I expect higher prices, my first goal is 30 €. Whether the increase will continue beyond that depends heavily on the development of the construction industry in Europe.
The multi-year chart shows that the stock is extremely volatile. This development is likely to continue, so it is important to regularly realize higher price gains.
My conclusion: I am positive at the moment and expect prices to pick up. However, investors should take advantage of the fluctuations.