Sintercast
SinterCast - Q3: Lower production than expected (ABG Sundal Collier)
2018-11-14 09:05
Sales 9% below our forecast
Production is lumpy – estimate revisions c. -5%
EV/EBIT ‘19e at 15.1x
EBIT 20% below our forecastSales came in at SEK 19.7m, which was 9% below our forecast. EBIT was SEK 6.0m, which was a miss by 20% and EPS was 5% below our estimate at SEK 1.00. The deviation compared to our forecast is attributed to lower production numbers than we had expected in the quarter. Engine equivalents were 2.30m on annualised level, which was 13% below our forecast. Sampling cups came in at 42,800, which was 5% lower than our expectation of 45,000.
Estimate revisions less dramatic than miss
The deviation looks dramatic but SinterCast’s production is lumpy. Therefore, we are cautious on extrapolating the results. The miss today takes off c. 5% on ‘18e EBIT and we expect estimate revisions along these lines.
Valuation
SinterCast was trading at P/E ‘19e of 17.1x and EV/EBIT ‘19e of 15.1x as of yesterdays close.
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