The price of energy has risen, so it’s good to heat with a low-emission fireplace if you can still get a government subsidy.
Not yet in Finland, though, maybe later?
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The cold snaps are hitting hard, and the heating season is in full swing. The shares of small Tulikivi are also accumulating long-lasting thermal energy.
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Tulikivi’s outlook is brightening, sales are growing, the order book is strengthening, and profitability is improving. The world’s largest manufacturer of heat-retaining fireplaces is able to raise prices, according to its own statements.
CEO and major owner Heikki Vauhkonen answered questions about Tulikivi’s status and outlook on Tuesday. Based on key figures, the company is doing better than it has in years.
Even significantly better.
“There’s a lot of pricing pressure on products,” Vauhkonen hints.
Tulikivi, which has been an underperformer on the stock exchange for years, may be on the verge of a sustainable turnaround. Its earnings per share were modest last year, but they still improved from 2020.
Behind the rise is a familiar factor. As the soaring prices of electricity and gas are intensely debated, consumers are increasingly considering acquiring a fireplace.
A heat-retaining fireplace saves electricity, and it can produce almost half of the energy needed for home heating. This fuels demand for Tulikivi, even though minimizing emissions from small-scale wood burning raises questions.
Tulikivi responds to skeptics by stating that a heat-retaining fireplace is a guaranteed heat source, for example, during power outages. And when wood burns cleanly, emissions remain low.
To the delight of its owners, Tulikivi is among the beneficiaries of the pandemic, as interest in renovations, holiday homes, and single-family housing is increasing demand for its products. Single-family home construction and sales are progressing very well across Europe.
Fact
Tulikivi
The publicly listed family business is the world’s largest manufacturer of heat-retaining fireplaces.
It manufactures fireplaces from both soapstone and ceramic mass in Juuka, Heinävesi, and Suomussalmi.
In 2020, Tulikivi generated an operating profit of 1.2 million euros on a turnover of 29.2 million euros.
The company guided that the 2021 turnover would be up to 35 million euros. The nine-month operating profit was 2.1 million euros.
“Good tools to seize further growth”
Tulikivi was a penny stock at under 0.50 euros on Tuesday, but its share price has risen by almost 300 percent in three years. The share price increase has likely been slowed by its utterly poor earnings history.
Nevertheless, one can justifiably speak of a turnaround company whose share, if expectations are met, may continue to trundle upwards. It can still be acquired at a favorable price, at least in terms of P/E, but