There are a few people following the company in the energy thread, and from time to time, the discussion revolves around Saxlund, so I thought it might be necessary to start a dedicated thread for the company.
Let’s start with a bit of Saxlund’s history (this is a bit unclear to me as well, but let’s fill it in):
Back when Pronea Miljöteknik went bankrupt, some people saw potential in the company’s flue gas expertise, and Pilum was formed. In 2016, Pilum acquired Saxlund (the deal also included Hotab) → Saxlund’s CEO became Pilum’s CEO. In 2017, Pilum’s last operation, Envipower AB, went bankrupt. Around June 2017, Pilum’s name was changed to Saxlund.
So, the current Saxlund has very few connections to the old Pilum. This will surely raise questions when looking at the company’s stock chart over a longer period.
There is also info in English on the website, but unfortunately, the PMs (press releases) are only in Swedish. I have messaged the CEO about this, saying it would be good to publish these in English as well, but I haven’t received a reply so far.
Here are the latest reports and excerpts from them; quotes were made using a translator as the “second national language” (Swedish) isn’t exactly my strength. The figures in parentheses are the corresponding numbers from 2018.
“Operating profit for the period amounted to SEK -5,933 (-58,710). The result has been charged with approximately SEK 1,000,000 in respect of fixed costs and which have been wound up.”
“Operating profit for the period amounts to SEK -6,085 (-11,455). The result has been charged with approximately SEK 2,500,000 regarding fixed costs that have been settled.”
“Operating profit for January-March amounts to SEK -3,642 (-15,041), of which approximately SEK -1,000 is attributable to costs that were settled during the quarter.”
A few more interesting things picked from the press releases.
CEO’s comments from the Q3 report regarding Germany’s phosphorus regulations.
"There are a number of positive indications that Saxlund will further fill the order book in the near future. The German law on the recovery of phosphorus, which requires that every water treatment plant in Germany with a purification capacity for more than 50,000 person equivalents will need to recover phosphorus, opens up a new market for Saxlund’s material handling equipment. The law will drive the combustion of sewage sludge for the recovery of phosphorus and Saxlund’s solution with our unique sludge pump, with excellent operational safety, has great potential to win projects in this exciting new market for Saxlund’s products. There are about 500 such treatment plants in Germany. That adjustment will need to be done by 2023. "
This didn’t remain just empty talk from the CEO; instead, at the beginning of this year, press releases were released, causing the stock price to soar. The value of these deals was 33.7 MSEK (3.2M€), which is a fairly significant size compared to the company’s turnover. So, regarding Germany, there is still potential for 498 plants left. If they can get further involved in these, there is very significant potential for Saxlund, as these should be ready by 2023.
Link to the German deal: http://webtools.bequoted.com/news/post?key=dotterbolag-i-tyskland-tecknar-tva-kontrakt-till-varde-av-ca-74609&channel=244&ecss=http://media.saxlund.se.loopiadns.com/2018/01/BECSS1.css
Here’s a bit about the German JV: https://www.euwid-recycling.de/news/wirtschaft/einzelansicht/Artikel/martin-und-kuettner-gruenden-joint-venture-fuer-klaerschlammverbrennungsanlagen.html
Apparently, there are additional opportunities for these phosphorus projects outside of Germany as well, as Sweden is supposedly planning a similar directive, if I interpret this article correctly.
Deals have also been secured in the UK for Helvellyn, which plans to build 20 plants, and Saxlund has secured a deal for this first one.
Also, another factory/plant project is progressing:
https://helvellyngroup.com/2020/02/helvellyn-group-gains-planning-approval-for-second-production-plant/
" Construction of the building is due to start imminently, with contracted production due to commence in Q1 2021."
In my opinion, a very promising case! I own shares and made my first purchases at 0.37 kr and have been increasing my position upon positive news. Saxlund’s financial statement will be released on February 19, 2020, so we will get more information then on whether the company is headed in the right direction.
What are other people’s thoughts on the company?
If this company doesn’t deserve its own thread, perhaps @Verneri_Pulkkinen can move this post to the energy thread or, for example, the Swedish micro- and small-cap thread.
