ESL orders more capacity.
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Here are Kassu’s comments on the new investment program. 
Aspo announced that its subsidiary ESL Shipping will have four new fossil-free cargo vessels built. The total value of the investment is 186 MEUR, and the vessels are scheduled to begin operations at the turn of 2027–2028. The vessel acquisitions are part of the 350–400 MEUR investment program announced by Aspo at its Capital Markets Day, so the announced investments did not deviate significantly from the plans previously disclosed.
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Aspo’s exit from Russia has now been completed. This has no material impact on results, which in practice means that the subsidiary has been divested for free. Going forward, management’s time will no longer be spent on resolving this matter, which is naturally a good thing.
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Here are Kassu’s preview comments as Aspo reports its Q3 results on Tuesday.
Aspo will publish its Q3 results on Tuesday morning. Overall, we expect a fairly good quarter despite the economic situation remaining subdued. In our forecasts, the improvement in earnings compared to the comparison period comes from the shipping company ESL Shipping, whose profitability level we estimate was supported by the new Green Coaster vessels. However, there is still no room for significant missteps if the company intends to reach its earnings guidance, which points to a clearly improving earnings level for the remainder of the year.
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Let’s post Aspo’s Q3 results here, since nobody is interested in the company.
The results were slightly below expectations but OK, the second installment of the dividend will not be distributed.
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Yeah, it was steady, quite a sluggish performance, and the omission of an extra dividend was expected. If the dry bulk market doesn’t start to strengthen, the share price will likely grind at these €5.50-6 levels for the time being.
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Here are Kasper’s comments regarding Q3.
Aspo published its Q3 results this morning, which fell short of our expectations. Overall, operational performance was fairly uneventful, but increased interest expenses and a higher-than-usual tax rate pushed earnings per share clearly below expectations. Aspo did not change its earnings guidance for the current year, so quite a strong earnings performance is required for the remainder of the year.
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The same guy interviewed CEO Rolf Jansson about the Q3 results and outlook.
Topics:
00:00 Introduction
00:10 Q3 highlights
00:54 Strategic projects
02:57 Capacity situation
05:33 Investment financing
06:05 ESL Shipping’s development and outlook
07:28 Capacity management
09:04 Telko’s development
10:01 Leipurin’s development
10:47 Capital return
12:05 Drivers for the rest of the year
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The market value has now melted almost -60% in three years. For example, according to Inderes’ forecasts, the combined operating profit for the next four years corresponds quite precisely to the current market value. Unless there are massive surprises (attacks on Europe, global pandemics, etc.), would it be reasonable to predict that we are currently quite close to the bottom?
Edit: Looking in the rearview mirror, 142.7 MEUR / 4 years. So, based on history and forecasts, Aspo is expected to generate on average about 150 MEUR / 4 years. Even though Russia attacked and Covid hit. In this light, a market value of 160 MEUR looks downright cheap? 
// Edit
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Kassu’s concise comments on Leipurin’s expansions
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Aspo Lowers Its 2024 Guidance Due to Weaker-Than-Expected Demand:
Based on its preliminary November results and latest earnings forecast, Aspo Plc has decided to lower its full-year 2024 guidance. The primary reasons for lowering the guidance are weaker-than-expected demand for ESL Shipping and Telko during the fourth quarter.
New Guidance
Aspo Group’s comparable EBIT is expected to be approximately EUR 30 million in 2024 (EUR 27.9 million in 2023).
Old Guidance
Aspo Group’s comparable EBIT is expected to exceed EUR 32 million in 2024 (EUR 27.9 million in 2023).
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Comments after Negar:
Aspo’s negative earnings warning led to a decrease in our earnings forecasts for the current year, as well as for the coming years. However, the share price, which has taken a significant hit, already prices in, in our opinion, an overly negative future outlook, which has made the stock’s expected return attractive for an investor who can withstand volatility. We are therefore raising our recommendation to Add (previously Reduce) with a target price of 6.2 euros (previously 6.5€).
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It would probably be more reasonable to compare EBIT to enterprise value (EV = 355M€). In that light, 150M€ in four years, or 37.5M€ per year, would be about a 10% annual return. That’s not bad either, depending on how high-quality, or in which direction developing, one assesses this business to be.
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That’s a good point; Aspo does have about 200 MEUR in debt.
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This stock has also experienced quite a deep dive, having just hit a 16-year low. I was close to acquiring the first batch after Inderes’ comment, but luckily, for once, I slowed down and examined the company’s situation more closely.
Even the share price reaction versus the magnitude of the profit warning was, in my opinion, exaggerated. Now I’m even more puzzled by this continuous slide, as Aspo is not a crisis company; its figures are quite tolerable, and the future, in my opinion, looks good, even very good, once the war ends.
I watched the roast and subsequent interviews, based on which the disengagement from Russia went smoothly. Growth has been sought/is being sought especially from the Baltic Sea region. The new “green” fleet is gradually growing, hopefully in line with demand. The targets are really ambitious: a billion-euro turnover with good profitability by 2029 and a division into infra and compounder companies. And this doesn’t look bad even in light of Inderes’ much more modest forecasts.
I don’t quite understand who is selling this and why (dividend?), but I started support purchases. If insiders also joined the buying spree, I wouldn’t hesitate to add significantly. The CEO already has a decent ownership, but others have quite modest holdings.
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Well, yeah, I myself also returned this week (quite significantly) as an owner after years, as it seems that Russia has been recovered from quite well. Telko is especially interesting. Those targets might be a bit too high, but if even a part of them… Telko’s larger peers are highly valued, which is a particular plus.
So the goal is:
Overall, Aspo aims for a billion-euro turnover, with Telko’s share being half of the total.
Nordea, however, slightly lowered expectations last Tuesday (I didn’t notice the report before the purchases, which actually started already the previous week; the share price rose due to the purchases from 4.82e to close to 5 euros and even above, so these weren’t small purchases). Nordea: Aspo is not a US company,
but a possible trade war in 2025 does not support the overall economic
environment, and the company clearly needs a bull market to reach its
financial targets. I’d still rather buy at 5 euros than at 6 euros, or if it’s fifty/fifty whether it would go to 4e first rather than 6e The rise will easily surpass HEX later, as long as the economy starts to recover. And a plus is that Kim Lindström is a long-term owner. That’s a bit of a sign of a dividend machine..
You can follow Telko’s events well here.News and blogs
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Here are Kassu’s preliminary comments as Aspo publishes its Q4 report next Monday.
We expect a reasonably good result from Aspo in a subdued market. In our forecasts, however, the earnings growth compared to the reference period is mainly explained by Telko’s acquisitions. We expect the organic growth of the business to have remained modest, especially due to the subdued demand situation in the industry. Aspo issued a profit warning at the end of the year, so there should not be significant room for surprises regarding the result.
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Aspo’s vision is to split the company into two separate businesses, Aspo Compounder (Telko and Leipurin) and Aspo Infra (ESL Shipping), before Aspo turns 100 years old in 2029.
October–December 2024
Net sales from continuing operations grew to EUR 159.8 million (132.2).
Comparable EBITA from continuing operations grew to EUR 8.0 million (7.2), or 5.0% (5.5) of net sales. ESL Shipping’s comparable EBITA was EUR 4.3 million (5.0), Telko’s EUR 3.9 million (2.6), and Leipurin’s EUR 1.1 million (0.9).
EBITA from continuing operations was EUR 8.1 million (6.8). ESL Shipping’s EBITA was EUR 4.4 million (4.4), Telko’s EUR 3.9 million (2.6), and Leipurin’s EUR 1.1 million (1.0).
Comparable return on equity (ROE) from continuing operations was 13.0% (9.9).
Comparable earnings per share from continuing operations was EUR 0.15 (0.10).
Free cash flow was EUR -18.7 million (0.3) due to investments.
Aspo announced on October 9, 2024, that ESL Shipping will invest in four Green Handy vessels, with a total value of approximately EUR 186 million. The investment will be implemented between 2024 and 2028.
Aspo joined the Science Based Targets initiative (SBTi).
Aspo’s subsidiary Leipurin agreed with Kartagena UAB on December 2, 2024, that Leipurin will acquire Kartagena’s food ingredient distribution business in Lithuania.
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Kasper has already commented on Aspo’s morning results.
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CEO Rolf Jansson was interviewed by Kasper.
Aspo succeeded in improving its earnings level from the comparison period. Regarding the outlook, the company expects earnings to grow even if economic recovery is delayed. CEO Rolf Jansson in an interview with analyst Kasper Mellas.
Topics:
00:00 Introduction
00:06 Fourth quarter summary
01:05 ESL Shipping’s volumes weaker than expected
01:54 Leipurin’s earnings improvement explained by acquisitions
03:07 Telko’s development
04:23 Guidance
06:04 Impact of strikes
06:56 Potential impact of trade war on Aspo
08:30 Acquisitions
09:57 Proposed dividend
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