MedicaNatumin
MedicaNatumin - Looks can be deceiving (ABG Sundal Collier)
2019-07-15 12:35
Profit warning due to delayed delivery of Jabushe order
H1’19 sales of SEK 73.5m, EBITDA of SEK 5.8m
Strong y-o-y growth of 14.5% for the Nordic business
Chinese trademark registration causes Jabushe delaysMedicaNatumin issued a profit warning today due to a delayed delivery of the remaining part of the Jabushe order totalling SEK 49.8m which was received in H2’18. Approximately 65%, or SEK 32.6m, remains to be delivered. We had previously estimated that SEK 21m would be delivered in H1’19, but because of the delays no part of the order will be delivered in H1’19. The delays are mainly due to the trademark registration with the China Food and Drug Administration (CFDA) taking longer than previously expected. Consequently, management reports that the company will reach H1’19 sales of SEK 73.5m, and EBITDA of SEK 5.8m, corresponding to an EBITDA margin of 7.8%.
Nordic business performs stronger than expected
While the delayed delivery of the remaining Jabushe order does come as an unwelcome surprise, the fact remains that MedicaNatumin’s business in the Nordics is performing better than we expected. The sales of SEK 73.5m correspond to y-o-y growth of 14.5%, which is 10.1% higher than our previous estimate of SEK 66.8m. Furthermore, we argue that the EBITDA margin of 7.8% is actually very solid, as it can be compared to H1’17, which was the latest H1 without Jabushe deliveries, when the Nordic business posted an EBITDA margin of 6.4%.
We maintain a positive outlook, adjust estimates accordingly
We have updated our estimates to reflect the strong performance of the Nordic operations, and the new outlook for the Jabushe delivery. We now estimate that MedicaNatumin will deliver the remaining SEK 32.6m of the order in H2’19, and we have raised the y-o-y growth rate for the Nordic operations by 3pp to 8% to reflect its strong performance. We had previously estimated that MedicaNatumin would receive new Jabushe orders of SEK 10m in H2’19, but the recent developments have prompt
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