Summa Defence Oy - the sum of disappointments

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In Kauppalehti, there’s an article about Summa, or more precisely, about the progress of “Uudenkaupungin Työvene” through the eyes of the CEO, why they joined Summa, and about the Estonian subsidiary.

The article also discusses a strong order backlog and ambitious expansion plans, the financing of which is possible under Summa’s wings.

I would gradually hope that instead of continuous “I feel like this is a definite scam” posts, we would start focusing on the company’s story itself, and whether anything will come of this.

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What is the basis for this so-called real 4.5M value?

This is quite a stir, and the dive in Summa’s value from the Meriaura conversion was indeed very predictable. Credibility as a defense conglomerate is always questionable when they went and bought all the junk, including fish farms, from Meriaura, but with pro forma revenue being 70M in 2024 and the order book being 200M, it sounds like the companies are growing strongly, whether they do defense or not.

Has Summa at any point given any indication that the group’s companies would play a part in some joint production and what kind of products they are supposed to start manufacturing? It wouldn’t be the first time in history that companies that manufactured heavy machinery are converted to the heavy defense industry. I might believe it if there was a different CEO and a couple of Rheinmetall engineers were hired.

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The stock also reacted to the good news
Uudenkaupungin Työvene’s order book extends
until 2028. Työvene is one of SUMMAN’s largest
owners. Työvene’s order market has picked up.

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If one genuinely feels that the company is a scam, is it problematic to express that one believes Summa is a scam? After all, enough evidence has been shared for that claim.

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If it’s posted daily that the company is a scam, without justification or telling anything new, then what added value does such a message bring to Inderes’ investment forum, without being a zero-value post?

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Markku Kankaala has previously taken companies “through the kitchen door” to the stock market, so it’s a familiar route for Markku.

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London invites to the DSEI UK 2025 defence industry and more exhibition.

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The defense industry is experiencing strong growth.

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More detailed information on the tax evasion and fraud allegations against Estonia’s Baltic Workboats. Baltic Workboats owns 8.2 percent of Summa Defence, making it the second-largest owner. When asked, Summa’s CEO Holopainen did not comment further as Summa is not involved in the case itself, but diplomatically hopes for a swift resolution to the matter.

The sums of money under investigation are large by Estonian standards. The Estonian Prosecutor’s Office, which is leading the investigation, suspects that Jüri Taal, a member of Baltic Workboats’ board, among other things, paid himself nearly one million euros by trading model ships with his company.

According to the suspicion, Taal had acquired large quantities of model ships, which he had sold to Baltic Workboats, which in turn had distributed the ships as corporate gifts.

There is also ambiguity regarding expensive company car arrangements for the company.

Baltic Workboats is suspected of defrauding Enterprise Estonia of 400,000 euros. This concerns a 12-meter “water taxi,” the implementation of which Baltic Workboats would have started, according to the prosecutor’s suspicion, already when applying for state aid. According to the rules, aid can be applied for projects that are in the idea phase.

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New negative things have been constantly emerging for a reason. Kyösti Kakkonen says it’s just a “bubble” and now these sandbox games of the largest Estonian owner. Anchor investors are all avoiding Summa already because of the CEO.

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700,000 Euro Accommodation Module Order for Summa Defence’s Subsidiary

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700,000 euro accommodation module order for Summa Defence’s subsidiary

And the client is Harrinava Hotels & Safaris, a tourism company operating in Lapland. This raises the question of whether Summa Defence can even be considered a defense industry company when the majority of its revenue clearly comes from something else. There are many other companies on the Helsinki Stock Exchange that have a much stronger connection to defense and security of supply. These are also priced much more affordably, as the defense industry hype has not caught on with them. For example, Millog is a client of Relais Group. Saurus, owned by KH Group, in turn manufactures the majority of Finland’s fire engines, which are more critical for security of supply than containers.

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A sharp stock price jump with a press release of zero content value:

https://www.kauppalehti.fi/lehdistotiedotteet/a/ddfb720f-cdd4-5bf5-b2b8-1a21d3fe730c

The stock rose with significant volume, in the scale of that note, in the same minute the release came out. And the price started falling again when someone had time to read beyond the headline of the release, noticing that the headline talked about past sales.

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Some larger entities probably just made pre-arranged deals, as over six million shares were traded at 15:00 and the trading volume dried up quite quickly after that.

Today’s total trading volume is slightly over 10.5 million shares, so it definitely cannot be attributed to randomness.

The fact that the announcement was also published at 15:00 suggests that these entities knew about the publication in advance. Which, again, certainly doesn’t inspire confidence.

@JuhaR Ah, I see, I see. Well, then. :+1:

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That remarkably large sell order of millions of shares at 0.47 had been hanging around in the TOP5 offer levels earlier in the day for a long time. Now it was smoothly offloaded as the zero-information announcement popped onto the market.

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They could try to put in a bit more effort, especially since they are trying to alleviate some concerns.

For example, they could review the turnover for the last five years, and similarly state the euros for the Defence side, and perhaps at the same time the % share…

  • So, in what timeframe have these companies delivered the mentioned 300 million euros to defence and armed forces and other security authorities? 5 years, 10 years, 30 years, since the establishment of each subsidiary?

  • 1/3 of the order book consists of defence and other public procurements. So, does this include snowplow equipment, pilot boats, etc.?

The subsidiaries of the defence and security technology group Summa Defence Oyj, Uudenkaupungin Työvene, IntLog, Lännen Tractors, Aquamec and Lightspace, have delivered orders worth a total of approximately 300 million euros to the defence and armed forces and other security authorities of various countries.

Of Summa Defence’s current order book of approximately 200 million euros, one third consists of defence and other public procurements.

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They could at least inform us how things are progressing with Summa Drones. The company was registered in the trade register late last year, but it doesn’t appear in the employer, prepayment, or VAT registers. However, production was supposed to start in Finland in H1, and after that transition, I think it has been quite vaguely communicated where things stand.

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Yep, by far the most important element in the overall appeal, however, and practically nothing is known about it.

One would have to invest in this blindly (heh heh) now, if one is to invest. And apparently this is the situation at least until the Q3 review, even though there is a Q2 review on August 22nd according to Nordnet.

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I also pay attention to these names brought up, in addition to the chairman of the board, Arto Räty.

They have extensive experience from the defense forces - but what about business and generating profit?

Nothing brings more apparent credibility than reliable names, especially when the background otherwise perhaps includes businessmen with a “controversial” past.

One of my close relatives was once lured, as a reputable banker (just before the crazy years of the 80s) - he also had good connections to the city management and council (zoning matters) - to become the CEO of a holding company owned by the main shareholder of a listed company. In addition to the listed company, the holding company wholly owned a construction company and a smaller clothing store. The board of the holding company, in turn, was led by the CEO of a small bank.

There were fine premises on Aleksi, but when the work began - complex corporate arrangements also started to unravel, different shareholder lists were found for the holding company’s owners, a small clothing store had been bought and valued as highly as a successful construction company - the company acquisitions were, of course, financed through the bank led by the chairman of the board.

My relative’s tenure didn’t last even a year, because he was not cooperative with the company’s board - their morals didn’t align.

I’m not claiming that Räty was misled into leading the board of Summa Defence and becoming an owner as a reliable figurehead to demonstrate that the company is a viable defense industry player - an industry that coincidentally is currently in a “hype” phase.

This episode from the 80s just inevitably comes to mind, where my relative received instructions along the lines of “strike while the iron is hot and get as much loan as you want”.

Ultimately, the conglomerate and its parts were mainly for corporate arrangements, and they were indeed made, and with a FOMO mindset, more well-known names of that time, and even a political party, were brought in.

Everyone involved ended up in bankruptcy, including the party and the bank, except for my relative - he was only left with large salary and pension receivables, because the holding company also eventually went bankrupt. According to claims, the main shareholder and chairman of the board of the company were left with caviar on their bread for the rest of their lives.

Sorry…this can be deleted as irrelevant…and perhaps it’s just my own association, and Summa Defence will be a successful defense industry company.

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Inderesin kahvihuone (Osa 10)
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It’s always interesting why people don’t even bother to register for VAT, since in the beginning there isn’t that quarterly declaration – and when there’s clearly no production, one would get the VAT back from purchases (even though it becomes mandatory with a turnover of 20,000 euros, in practice, a company benefits from the VAT register during its ramp-up phase).

Well, such companies are generally complete jokes, which unequivocally tells outsiders that there is practically no turnover. And especially considering the absence of those other registers, is there even a business there…

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