@Erkki_Vesola I suspect that the rise in demand for forest machinery in 2022 is also strongly influenced by the fact that imports of Russian wood to Finland collapsed and logging had to be increased domestically, among other things.
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Ponsse is currently in quite an interesting situation when compared to the situation during the financial crisis. The amount of equity has grown significantly over the years, but the net gearing ratio is much better than back then.
Profitability has slumped in a similar way as during the financial crisis. At that time, the return to profitable business happened quite quickly, and no losses have been made since then.
ROE has been on a decline for a long time. However, it should be remembered that equity has grown significantly over the years, which makes the changes in ROE smaller.
Measured by the P/B ratio, the valuation is at nearly its lowest level. There is already a decent amount of upside potential if the stock returns to a more normal level seen in recent years. A larger amount of equity could, of course, allow for somewhat lower valuation levels.
However, relative to revenue, the valuation is closer to the average. One could roughly estimate that the share price could move by about 50% in either direction.
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Off-topic, but @Ripelein where did you find such great charts? 
Edit. Thank you very much for the answer @Ripelein
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I have been building a new website related to quantitative methods at sawor.pythonanywhere.com. I am currently adding my previous data on just over twenty companies there before further major development.
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[Ponsse Plc: Ponsse changes segment reporting | Kauppalehti]
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Behind a paywall
Highlights from the article:
"Analysts have slightly trimmed their forecasts following the profit warning, and the current year is expected to be weaker. However, Ponsse’s results are expected to turn upward as early as 2025.
Financially, the company’s situation is quite stable. Ponsse’s balance sheet is strong, the cash position is good, the amount of net debt is small, and the company’s solvency is at an excellent level."
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Doesn’t look like the machines are moving at the moment. 
Competitor John Deere is forced to lay off:
"According to preliminary estimates, the change negotiations may result in the termination of up to 25 positions and up to 35 job description changes. 363 white-collar employees are covered by the negotiations.
– It is not yet possible to provide an estimate of how many employees will have to be laid off at each location. Time will tell as the negotiations progress, says Jari Mennala, CEO of John Deere Forestry.
The background of the change negotiations is the ongoing adjustment of operations within the Deere & Company Group to the global market situation and the strengthening of the global competitive position of the forest machine business.
In Finland, the company plans to renew its operating model with the aim of improving the company’s customer orientation, competitiveness, and cost-efficiency."
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Last year’s EBIT was 47.2. Now Eki’s forecasts show 44.4 following the previous profit guidance (slightly weaker).
Could one roughly guess that “slightly weaker” means a decline of 5-10%?
Significantly weaker? 10-20%? Meaning approx. 37.76 - 42.48 million in operating profit. There is definitely downward pressure on the stock now as analysts are revising their forecasts downwards. Perhaps Deere is having problems as well, even though that example is in a different size class. Deere is also reporting its quarterly results next week. It will be interesting to see the development of the order backlog.
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Hopefully Eki isn’t canceling the Rio samba carnival though: Ponsse Q2’24 -ennakko: Brasiliassa ei bailata - Inderes
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At least that Brazilian customer who has signed a full service agreement gets to party. The machines are being pushed to the limit and Ponsse is footing the bill.
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Ponsse Half-Year Report 1 January – 30 June 2024
April–June:
Net sales were EUR 188.0 (208.1) million
Operating profit was EUR -0.6 (10.2) million and operating profit percentage was -0.3 (4.9)
January–June:
Net sales were EUR 357.7 (409.8) million
Operating profit was EUR 0.6 (26.8) million and operating profit percentage was 0.2 (6.5)
Profit for the period was EUR -11.7 (21.8) million
Earnings per share were EUR -0.42 (0.78)
Order book was EUR 210.4 (294.2) million at the end of the reporting period
Cash flow from business operations was EUR 25.4 (0.1) million
Equity ratio was 52.8 (54.3) percent at the end of the reporting period
Ponsse published new profit guidance on 9 August 2024: The company’s operating profit in euros is estimated to be significantly lower in 2024 than in 2023 (EUR 47.2 million).
“The profitability of Ponsse’s Full Service contract in Brazil remains challenging. The company has updated the financial forecast for the contract, which is why we are preparing for higher-than-expected losses for the years 2024 and 2025 regarding the contract. The operating profit for the reporting period includes an expense item of EUR 18.6 million related to the Full Service contract,” says Juho Nummela, President and CEO of Ponsse, in the results release.
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Good grief, based on a quick analysis, it looks like Ponsse’s earnings have been driven into the ground until the end of 2026. I find it hard to believe that the problems will end by the end of 2025. An incredibly bad maintenance contract for Ponsse, but an excellent one for the machine contractor.
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Yep, turnover is a whopping 11k.
Losses so far have amounted to 8M, provision for the next approx. 2.5 years 10M… Unfortunately, I don’t believe it.
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Here are Eki’s quick comments regarding the Q2 results.
Ponsse’s Q2 order intake and revenue slightly exceeded our forecasts, but the other figures were unpleasant. The guidance in line with the negative profit warning issued on Friday was, of course, reiterated. Since uncertainty surrounding the company’s earnings power seems set to persist for a relatively long time, we believe the negative share price reaction is justified.
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Riku has been writing about Ponsse’s Q2
https://x.com/RikuLeino2/status/1823261011652088292
Find more here
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Here is a fresh company report from Eki
Ponsse’s Q2 order intake and revenue slightly exceeded our forecasts, but the other numbers were disappointing. The fresh 2024 guidance was reiterated and our forecast changes, except for the 2024 result, are minor. Based on our current forecasts, the stock is still quite highly valued. Since there is also a lack of positive price drivers, we reiterate our reduce recommendation and maintain our target price of EUR 24.00.
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Ponsse shared very little information regarding the Full Service agreement. The reasons why the company believes the final year of the maintenance agreement, 2026, will be managed better remain a matter of speculation. Provisions for losses have been made for the years 2024 and 2025.
“The profitability of Ponsse’s Brazilian Full Service agreement remains challenging. The company has updated the financial forecast for the agreement, which is why we are preparing for larger-than-expected losses for the years 2024 and 2025.”
If one were to guess, the customer in question could be Bracell, whose contract was announced in 2020. As I understand it, the contract began at the start of 2021. Other options could be older Full Service customers Veracel, Cenibra, or Fibria Aracruz, but their scale is smaller than the Bracell project.
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Regarding Brazilian Full Service customers, the pulp companies Veracel, Cenibra, and Fibria Aracruz were mentioned in the Ponsse News magazine 2/2018 (p. 6). (Ponsse News 2/2018)
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Bracell became a Full Service customer in 2020. In Ponsse’s 2020 annual report (p. 7), Marko Mattila, Director of Service and Marketing, stated that the Brazilian subsidiary had secured the largest machine and total maintenance agreement in the history of the entire Ponsse group with the company Bracell. According to him, the agreement led to strong growth in Ponsse Latin America’s headcount. The annual report did not specify the number of personnel in Brazil. (Ponsse Annual Report 2020)
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The October 2022 issue of Ponsse News 2/2022 (p. 28) provided information on the Full Service maintenance for the Bracell project. These are performed in the field in the states of São Paulo and Minas Gerais. (Link: Ponsse News 2/2022)
Now Ponsse appears to be recruiting for Full Service maintenance at the Lençóis Paulista site. Fulfilling the obligations under the agreement seems to require hiring additional personnel.
- According to Ponsse’s Brazilian recruitment pages, there are currently 16 open positions for Full Service maintenance, 13 of which are at the Lençóis Paulista location.
https://trabalheconosco.ponsse.com/jobs?department_id=27503
- According to previous data from FinnCham, the scale of Ponsse’s personnel in the state of São Paulo was a total of 250 at the start of the project. According to the 2020 annual report (p. 45), the total number of Ponsse personnel was 1,845, of which 1,045 were in Finland and 800 were in other countries.
Additionally, about three years ago, Bracell recruited many new forest machine operators in Lençóis Paulista.
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In 2021, Bracell announced that more than 150 harvester operator positions were open in the Lençóis Paulista region. The announcement required work experience with forest machines.
(Bracell 18.3.2021: Bracell abre mais de 150 vagas para Operador de Máquina de Colheita Florestal) -
In 2021, on Ponsse’s website, Training Manager Petri Nousiainen stated that the Full Service agreement between Ponsse and Bracell includes training for new forest machine operators.
https://www.ponsse.com/fi/news2/-/asset_publisher/ZE4CjSrtQpXR/content/ponsse-treinou-mais-de-2600-horas-em-2021
Based on this information, one can get some sense of the scale of the Bracell project. Perhaps Ponsse intends to increase proactive and preventive maintenance measures with the help of additional personnel to keep the machines operational for longer. This might bring the situation under control, as according to Ponsse’s Q2 report, machine productivity and mechanical availability have developed favorably and are generally in line with targets.
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Thanks @Contrafun for the digging and the informative post. I wonder if the “Finland scenario” is happening in Brazil? In other words, once a driver becomes truly productive after comprehensive training—meaning they’ve learned to operate, service, and maintain the forest machine—they jump to another company for a slightly better salary. And since there’s a shortage of drivers, you have to start all over again and train a new one (in this case, Ponsse has to do the training). This happens surprisingly often in Finland.
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