OP’s Antti Saari reported on Nurminen’s results. 
Also, Nurminen Logistics published its Q1 report today. The company reported a higher than expected EBITA operating profit. Overall, revenue decreased by only 8% from the comparison period. Guidance remained unchanged. Chief Analyst Antti Saari explains the company’s first quarter of the year in the video and tells why the company’s operational development is so strong.
Aapeli has made a new company report on the strongly performing Nurminen.
Nurminen Logistics’ Q1 report was stronger than our forecasts in terms of operational figures. We estimate that this was primarily due to North Rail’s performance, and partly also to the improved development in the Baltics compared to previous quarters. The company also, quite unsurprisingly at this point, reiterated its guidance for the current year. Instead, we kept our forecasts for the coming years practically unchanged, reflecting the elevated uncertainty related to the global economy. In line with the overall picture, we reiterate our target price of 1.2 euros and our ‘add’ recommendation.
Quoted from the report:
Nurminen’s operating cash flow was strong at EUR 6.0 million in Q1. Considering low investments (-EUR 0.4 million), Q1 free cash flow before lease liability payments was at a good level. Figures for the preceding 12 months are also strong (operating cash flow EUR 10.1 million, free cash flow EUR 15.6 million). However, it is worth noting that a portion of the cash flow belongs to the minority owners of the Baltic and North Rail businesses.
Last year, I compared North Rail’s freight volumes to the total railway volume from the previous year. What do the figures look like for last year:
27 million tons of freight were transported on the railway network last year (as in the year before that). VR announced that it transported 23.2 million tons in 2024 (2023: 23.4 million tons). It appears that 2.539 million tons (2023: 2.898 million tons) is the tonnage for the Luumäki-Vainikkala section = North Rail. And 1.2 million tons remain (including Fenniarail’s loads and, for example, 0.042 million tons of goods came from Russia by rail via Niirala, from where some goods also cross the border, but where Nurminen is probably not involved in any way).
In April, North Rail’s trains ran 35.7% more than a year ago. However, the number of fertilizer trains decreased slightly from Q1’s record level. Last April was one of the quietest months.
Could an early spring have caused fertilizer deliveries to be front-loaded?
Have additional import duties already been imposed on fertilizers, or do I remember incorrectly, or are they still to come?
In January, there was talk of 15% tariffs on Russian fertilizers imported into the EU. The tariff would not apply to transit traffic handled by Nurminen. I don’t know how large a portion of those Nurminen fertilizer shipments ultimately go to the EU.
Russian fertiliser exports to the EU surged by over 33% in 2024 alone, reaching 6.2 million tonnes worth over €2.2 billion.
Kremlin’s fertilizer cash stream is blind spot in EU sanctions: Vladimirov | Reuters
Does it look like North Rail might have maintenance shutdowns again this month, as services to Harjavalta have been canceled for almost the entire month of May, and a few services to Uusikaupunki and Siilinjärvi have also been canceled?
And it seems there hasn’t been any traffic to Hamina for a long time either.
Nurminen Logistics’ CEO Olli Pohjanvirta was interviewed by Aapeli.
The video discusses, among other things, the Q1 results published in April and the company’s outlook.
Topics:
00:00 Introduction
00:18 The year started strong
03:32 Drivers of Baltic volumes
05:02 Development of railway business
07:01 Integration of Essinge Rail
08:09 Outlook and impacts of geopolitical tensions
10:22 Volume outlook
13:15 Cornerstones of the strategy
15:31 Readiness for acquisitions exists
18:10 How will the growth target be achieved?
20:13 Is the profitability target ambitious enough?
Here is yesterday’s announcement:
Nurminen Logistics has started regular full-train transports from the Czech Republic to Kazakhstan to the Allur Company’s factory in Kostanay, where the country’s largest car factory is located.
The trains travel from Prague to Kostanay along the Trans-Caspian route, which bypasses Russia.
The Finnish Transport Infrastructure Agency (Väylävirasto) has plans to make some of the railway’s open data confidential, which means we, Nurminen’s train spotters and railway enthusiasts, may no longer be able to track or compile statistics on train movements in the future. This would be a shame, as one of the most enjoyable aspects of following Nurminen has been tracking trains, and the number of train movements has provided a good indication of the entire group’s results. If a direct train connection to China were to open, the number of trains could be monitored specifically from the open data service, Julia.
The suddenly changed geopolitical situation has brought dark clouds over open data information. It has been heard from various sources for some time that openly shared information from the railway world should be cut back. Although the information has countless useful applications, it can also, of course, be used harmfully against Finnish society.
Another good source of information, the Port of Riga, has also not updated its port statistics since October 2024.
VR has again put old locomotives up for sale. This time, locomotives and wagons that have been decommissioned from traffic use are for sale, but they can be refurbished for traffic use.
I can’t say whether Nurminen might have already bought these from VR’s previous auctions. At least there has been no announcement about them. According to North Rail’s website, the company still has the same 9 DR21 line locomotives and three DR20 shunting locomotives.
Throughout its history, Nurminen has been known for making strategic moves with rather moderate valuation multiples. Now, locomotives could be bought literally at scrap metal prices, although those locomotives would need to be refurbished to be operational again.
The locomotives and freight wagons currently for sale are not roadworthy as such, which is why their base price is determined by the weight of each piece of equipment and the stock exchange price of recycled metal. The equipment is sold to other operators in the industry in Finland for refurbishment for traffic use.
In May, Nurminen Logistics (North Rail) trains ran 18.6% more than a year ago.
Harjavalta nickel refinery had its annual maintenance in May, which explains the low number of nickel trains.
Aapeli has prepared a new comprehensive report on Nurminen, and like other comprehensive reports, it is available for everyone to read.
We reiterate our ‘add’ recommendation for Nurminen Logistics and our target price of 1.2 euros. Nurminen has made a remarkable turnaround in its business in the 2020s. With the latest acquisitions, its earnings level has also risen to entirely new levels, and at the same time, its business has expanded more strongly outside Finland. The company also has the prerequisites to accelerate its international growth through acquisitions already in the short term. In our opinion, the stock’s valuation is moderate in relation to this overall picture, and we see the risk-adjusted return expectation as being at an attractive level.
Quoted from the report:
Company has prerequisites for increasing profit distribution
Considering the current and forecasted earnings performance and cash flow, as well as the relatively moderate investment needs required by the current business (locomotives are new and the Vuosaari property is leased), we believe the company has good prerequisites for increasing profit distribution. However, potential inorganic growth moves and the scale of possible acquisitions will partly affect this.
Correspondingly, an increasing euro-denominated dividend, in our understanding, refers to the total amount of absolute dividends paid by the company. Behind this, we estimate, are potential larger acquisitions and a possible increase in the number of shares (incl. the use of own shares as payment / possible equity raising), but the likelihood of this is difficult to assess at this point.
Miksu questioned Aapeli about Nurminen, regarding the company’s extensive report.
Nurminen Logistics, which provides international logistics services, has managed to steer its earnings level onto a strong track. In addition, steps towards internationalization have already been taken with the acquisition of Essinge Rail, but more is expected. Analyst Aapeli Pursimo tells more about the company.
Topics:
00:00 Introduction
00:44 Nurminen’s Businesses
04:12 Customer Contracts
06:28 Competitive Landscape
10:02 High Profitability of North Rail
11:53 Minority’s Significant Share in Baltic Business
13:21 Updated Strategy and Next Steps
14:53 Market Development
16:41 Current Forecasts and Drivers
18:37 Acquisitions as Part of Growth
21:05 Upside in Valuation with Sustainable Earnings Level
North Rail’s transport contracts renewed. Volumes should therefore remain reasonable, provided that sanction risks do not materialize.
The agreements cover the majority of North Rail Oy’s current transport volumes and enable the company’s stable business development, as well as the preparation of new international operations, which will seek growth in the future.
However, I would still see other threats than just sanctions. Didn’t Ukraine also strike the fertilizer industry a couple of times? And how will Russian railways fare in the future? Transport volumes have been declining; could transport prices rise even further and, from a market economy perspective, lead to a reduction in shipments?
Of course, what are these new international operations…? Could the new arrangements instead be in the Haparanda/Tornio area, if North Rail acquired a trainload of container wagons whose cargo would then travel through Sweden to the rest of the world? (As Nurminen’s Linnajärvi stated in an interview, lifting and transferring containers to a train with a different track gauge is not a significant operation or cost, despite media discussions about 1435mm tracks to Finland.)
Yes, there are plenty of risks in North Rail’s business. Speaking of North Rail, @Iikka_Numminen, do you intend to or are you allowed to continue publishing the train statistics you’ve collected here on the forum, now that you are an Inderes employee?
I checked Juliadata.fi and it seems that the number of North Rail’s trains would have grown by approximately 23% YoY in Q2.
Apparently, a new incentive program has also been established Nurminen Logistics perustaa uuden osakepohjaisen pitkän aikavälin kannustinohjelman - Inderes
The aim of the programs is to align the goals of key personnel and Nurminen Logistics Plc’s shareholders, thereby increasing the company’s value in the long term, promoting financial and efficient performance, and committing key personnel to the company by offering them a competitive performance-based earning opportunity.
Quite good, but it would be interesting to know what metrics the board follows in the realization of these goals.
Good morning everyone! I guess I can continue this stats tinkering for now! 
Here are North Rail’s June statistics: In June, trains ran 9.8% more than in June 2024, and in Q2, trains ran about 20% more compared to the reference period.
We are currently expecting an adjusted operating profit of €5M for Q2, adjusted for PPA amortizations from the Essinge Rail acquisition, whereas a year ago the company made an adjusted operating profit of €4M. The Finnish economy has continued on its old tracks, meaning there’s not much positive to say, which doesn’t provide a boost for the company, but the situation for Nurminen looks quite good to my eye, as such a good number of trains have run compared to last year.
VR has sold 3 locomotives to other operators in the industry.
It’s hard to say who bought them, as in addition to VR and Nurminen’s North Rail, Fennia Rail and Arctic Rail also operate on Finnish railways.
Arctic Rail has been conducting its first test runs with just locomotives since July.