Thanks @Erkki_Vesola for the interesting analyses of the engineering sector. Your company reports and posts on the forum have often been a great help.
Regarding Ponsse, we have enjoyed extensive reports that have deeply explored the company as an investment target. A total of six extensive reports have been published over eight years.
Date
Extensive report
21.06.2017
Good prospects for continued earnings growth
24.09.2018
Time for harvest
04.12.2019
Cut through, broken, and into the portfolio
17.05.2021
Machine trade is booming, but the stock price is already high
11.09.2022
Terrain still difficult
12.02.2025
Out from between the wood and the bark
The first extensive report became available a couple of months after Erkki started at Inderes. First, in May, a video was published on InderesTV about Inderes analysts’ visit to Ponsse’s Vieremä factory. This was, by the way, the first video of a factory visit published on InderesTV. After the factory visit, the first extensive report on Ponsse was published in June 2017.
Thanks to the extensive reports, knowledge of Ponsse as an investment target has increased. I believe that the reports will remain an important source of information in the future and will also benefit all new Ponsse investors.
Ponsse’s investment story has come to the attention of a wider audience, and this is reflected in the development of the company’s ownership. According to Euroclear’s statistical archive, Ponsse had a total of 11,578 shareholders in March 2017. At the end of January 2025, the number of shareholders was over 18,500. Over eight years, it has grown by almost seven thousand investors. Currently, over 8,000 investors follow Ponsse on the Inderes website.
This partly speaks to Inderes’ ability to connect investors and listed companies.
Deere’s Q1 yesterday. From Ponsse’s perspective, the forest sector outlook remains unchanged, meaning it stays flat or decreases by 5% in 2025. As stated, Deere also includes the full-tree method.
Here are Aapeli’s preliminary comments as Ponsse releases its Q4 report on Tuesday, i.e., tomorrow.
We expect the company’s operating profit to have increased from the comparison period despite a decrease in revenue. The main focus of interest is the guidance for 2025 and more detailed market comments.
Cash flow was a really positive surprise for me. A really big improvement in working capital without the service deteriorating. Similarly, good news came from Brazil and reservations were cleared. Great!
That diligent evening proletarian Pursimo has made a new company report on Ponsse.
Ponsse’s operational Q4 figures were in line with our expectations, while orders clearly exceeded our expectations. Correspondingly, this year’s guidance was cautious when compared to a low benchmark. In our view, however, at this stage of the year, it should still be interpreted as a loose indication due to limited visibility. However, we significantly lowered our earnings forecasts for the coming years and expect the margin improvement we predict to occur more slowly than our previous forecasts.
Quoted from the report:
Orders positively surprised
Orders positively surprised. Ponsse’s Q4 order intake was EUR 213 million (12% y/y), which exceeded our forecast, which had expected a 17% decline, by a quite wide margin. According to the company, the order flow was supported by a busy H2 trade fair season around the world, and thus orders rose to a more normal level, similar to Q3. In our understanding, however, there was no significant deviation in trade fair activity compared to typical years.
“We have already noticed our own machine sales picking up and the bravest customers investing and increasing their equipment. However, no new entrepreneurs have been coming, apart from a few occasional inquirers.”
Ruuskanen knows from experience that the situation can change quickly if logging fees start to rise due to a shortage of wood at the mills.
This trend will also continue in the states of Washington/Oregon, as the permit process begins to be streamlined (currently, a review round for environmental permit processes is underway, with information on their easing possibly coming within a few months)
Aapeli has, as an energetic young man, prepared a new company report on Ponsse right after Q1.
Ponsse’s operational Q1 figures exceeded our expectations across the board, which in turn increased confidence in our forecasted margin improvement for the coming years. Correspondingly, the company reiterated its guidance for the current year, reflecting increased uncertainty, but we still consider the guidance cautious given the low comparison base. On the other hand, we estimate that the prevailing geopolitical tensions will, however, curb a positive market turnaround and and create uncertainty in the demand outlook for the forest machine market. In line with the overall picture, we have made only minor adjustments to our forecasts for the coming years and see the stock as neutrally priced at present. Reflecting this, we reiterate our reduce recommendation for Ponsse, but revise our target price to 25 euros (previously 24 €).
I thought I’d post this here too, if anyone is interested. Deere’s results might offer some interesting insights for those interested in Ponsse as an investment. At Deere, for example, forestry equipment sales weakened due to decreasing transport volumes.
Ponsse expands its maintenance service in Argentina. The dealer’s new branch is located in the Entre Ríos province on the west bank of the Uruguay River.
As stated in the article, Ponsse has been operating in Argentina since 2016. This information is also confirmed in Ponsse’s 2016 annual report, which lists the Argentine dealer in its list of dealers. Argentina is not yet found in the list from the 2015 annual report.
Dealer Geier’s website also mentions that they have represented Ponsse since 2016.
Geier’s current branch is located in Eldorado, Misiones province, so operations are strongly concentrated in the northeastern part of Argentina.
Ponsse has gradually expanded its representation in Argentina. In Latin America, Ponsse has been operating for 20 years, as the company entered the Brazilian timber harvesting business back in 2005.
The new branch is being opened in a strong Ponsse area, so it can be assumed that it will also support Ponsse’s sales in the future. The new branch enables more efficient logistics, spare parts deliveries, and technical support for customers in the Uruguay River region, where, according to the press release, Ponsse’s harvesters and forwarders are gaining a significant position in timber harvesting. However, Argentina’s scale is very small compared to the Brazilian market. One more service point in addition to 236 maintenance service centers.
The timing seems to be perfect, at least when looking at the economic figures…
"Private consumption rose 2.9%, and gross fixed capital formation surged 9.8% quarterly and 31.8% annually, driven by increases in construction (8.4%), machinery and equipment (48.9%), and transportation equipment (74.7%)."
Especially those last figures look good for Ponsse.
Here are Aapeli’s preliminary comments as the company publishes its Q2 results next week on Tuesday.
Ponsse will publish its Q2 report on Tuesday, August 12th, at approximately 9 AM. We predict the company’s result to have risen significantly from the weak comparison period. However, the main focus of the report will be more detailed market comments on the effects of heightened uncertainty on the demand outlook for forest machines and received orders.
Aapeli has prepared a company report immediately after Ponsse’s Q2.
Ponsse’s operational Q2 figures fell short of our expectations, but in our view, this was due to timing factors in deliveries. Instead, the company’s order flow was in line with our forecast, and we believe there were also preliminary signs in the market that the worst of the uncertainty was easing. Consequently, we made small positive adjustments to our forecasts for the coming years. With the share price increase, we see the short-term valuation of the share as slightly elevated, and thus we reiterate our “reduce” recommendation for the share, but revise our target price to 27.5 euros (previously 25 €) in line with the forecast changes.
Aapeli’s pre-comments, as Ponsse reports its results next week on Tuesday.
We forecast the company’s result to have risen slightly from the good comparison period level. We also expect the order flow to have picked up from the comparison period. However, we see cloudiness above the company’s demand outlook due to global market uncertainty and the recent negative news flow from the forest industry. Thus, our greatest interest lies in more detailed market comments regarding the demand outlook for forest machinery.
Operating profit was EUR 9.6 (18.5) million and operating profit percentage was 5.6 (11.0)
January-September:
Net sales were EUR 530.4 (526.9) million
Operating profit was EUR 30.2 (19.1) million and operating profit percentage was 5.7 (3.6)
Profit for the financial period was EUR 23.7 (0.3) million
Earnings per share were EUR 0.85 (0.01)
Order book was EUR 163.2 (199.1) million at the end of the review period
Cash flow from operations was EUR 4.4 (36.5) million
Equity ratio was 57.7 (55.1) percent at the end of the review period
The company’s operating profit in euros is estimated to be slightly higher in 2025 than in 2024 (EUR 36.8 million).
Our operating profit fell short of targets, and relative profitability was 5.6 (11.0) percent. This was influenced by a weaker-than-expected gross margin and cost development.
Tässä Aapelilta Ponssesta Q3:n jälkeinen yhtiöraportti.
Ponsse’s Q3 report was broadly subdued compared to our expectations, influenced by the recent rapid weakening of the forest machine market outlook. Signs of a quick recovery in the situation are currently, in our view, absent, which led us to significantly cut our forecasts for the coming years. With our lowered forecasts, the stock’s valuation is still elevated in our opinion, which is why the stock’s risk-adjusted return expectation remains weak. Reflecting this, we reiterate our reduce recommendation for Ponsse’s stock, but lower our target price to 25.0 euros (previously 27.5 €) in line with the forecast changes.
