Hello HerrDax!
Yesterday, we commented in more detail on the kind of performance we believe Exel achieved in Q3. Our comments can be read via the following link: Exel Q3 keskiviikkona: päähuomio on yhä kannattavuuskäänteen etenemisessä - Inderes
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Hi Joonas!
I read your report. It was excellent, thank you for that.
Many parties have been eagerly awaiting the raised guidance, which never came. I think you mentioned in the report that this might indicate profitability issues. Surely the guidance raise should have happened by now, if there was reason for it, and they should have announced it in advance according to the law, unlike Nokia did last Thursday…
You are right that guidance changes should be given as soon as there is a reason. In Exel’s case, we see chronically weak visibility as the main reason why no guidance change has been heard yet. Exel typically has a strong order book for about a quarter, which means, for example, that guidance raised after Q2 would have required the company to have exceptionally good visibility/confidence for the rest of the year and/or an explosively good start to the year, which would have gained a significant lead compared to the reference period.
Of course, now that it is already the end of October, visibility should be good enough for the rest of the year so that the validity of the current guidance could be critically enough assessed within the company. It is also good to remember that timing factors also affect how orders ultimately translate into revenue. For example, Exel updated its 2018 revenue guidance as late as the end of January.
Fortunately, tomorrow we will be wiser about where we are and, most importantly, in which direction we are going!
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Exel published its Q3 report a moment ago. Revenue was a couple of notches below our expectations, but profitability clearly exceeded our forecasts. The profitability turnaround thus continued its exemplary progress in the right direction. The company reiterated its guidance for the current year. Among individual customer segments, Building and Infrastructure was, as expected, the strongest, driven by wind power, while in Industrial Applications, volumes were still dampened by the softness in the telecommunications sector.
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It seems that production will eventually be concentrated at the new factory in Nanjing, and the two old ones would be shut down if necessary?
In the third quarter, we started production at a new location in China near the city of Nanjing, where both of the previous factories are also located. The property we rented is better suited for composite production than the old ones, and it can accommodate the production of both old factories if needed.
Shouldn’t expect the situation for wind power construction in Germany to ease up for a while, right?
Yes, exactly. The new production facility in China is large enough to accommodate the current production of two older factories. In addition, the consolidation of the factory network brings clear organizational benefits, as the production transfers will allow China’s production to be managed more clearly as a single unit. The distances between the old Nanjing units have been so long that only some administrative functions have been possible to centralize. Combining the production network also makes certain production scale advantages more accessible than when operating through a fragmented production network.
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{“content”:“For some reason, the report doesn’t seem to have affected investors…”,“target_locale”:“en”}
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The future of wind power and, consequently, Exel, looks good!
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This too will become more topical:
We believe that earnings growth is already very close to the level of a significant improvement in the company’s presumably broad guidance terminology, which is why we still consider a positive earnings warning to be issued at the end of the year as possible, provided that the earnings machine remains on its current trajectory.
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That bonus finally came.
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Let’s put the announcement here too:
https://www.inderes.fi/fi/tiedotteet/exel-composites-oyj-paivittaa-nakymiaan-vuoden-2019-oikaistun-liikevoiton-osalta
We’ll see how much of this was already priced in.
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How is the power of wind energy calculated? Is it 1000 MW at the peak on a windy day, or the average power over a long period? In any case, turbines are being erected at a furious pace.
I must admit, I got lucky, because when the course was around 5.20 for Elvira some time ago, I placed a sell order, but luckily I was greedy enough and it didn’t go through. It would have sold cheaply.
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Well, not quite drowning. There’s a deficit of about 5000MW, and in Finland, that means a frosty day + disruptions in import connections = electricity price 1000e+/MW(?), in addition to which Masse’s cottage will occasionally lose power as it’s rationed to critical sites for security of supply 
Apologies for going off-topic, I’ll take my leave now
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Finland is still severely deficient in electricity production and dependent on electricity imported from abroad (mainly nuclear power produced at Forsmark in Sweden). Unfortunately, wind power is a poor form of production during the coldest winter frosts, meaning other balancing production would be needed.
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Uh, this positive report came a month early 
It’s in the portfolio, but I had planned to add a bit more once the funds from the sale of Hoivatilat hit my brokerage account. Annoyingly, almost all the stocks I’d thought about buying to replace Hoivatilat seem to have risen significantly after the Hoivatilat takeover bid… Well, let’s hope it’s not too late to add Exelinc then either. This looks good.
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Yes, Inderes with a target of 6.3. “The turnaround train is accelerating.”
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What’s going on here? Funny moves and relatively high trading volume. Is there some news or what’s causing this on the last stock market day of the year?
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Why did Exel drop over 4% today?