Lamor Corporation Plc Company release 3 March 2022 at 09:00 a.m EET
Lamor’s Financial Statements Release for 2021: Order backlog shows a step change in the future business volumes
This release is a summary of Lamor’s Financial Statements Release January–December 2021. The complete report is attached to this release as a pdf file. It is also available on the company website at investors.lamor.com.
October- December 2021 in brief
- Orders received continued to be on a good level and increased to EUR 13.9 million (6.6)
- Revenue increased by 53.3% to EUR 16.3 million (10.6)
- EBITDA was EUR 1.9 million (0.3)
- Adjusted EBITDA totalled EUR 2.0 million (1.1) (adjusted with IPO related expenses of EUR 0.1 million)
- EBIT was EUR 0.5 million (-0.6)
- Adjusted EBIT amounted to EUR 0.7 million (0.3)
- Net cash flow from operating activities was EUR 1.1 million (4.9)
- Earnings per share increased to 0.03 euro (0.01)
January – December 2021 in brief
- Orders received increased by 511.2% and was EUR 260.8 million (42.6)
- Order backlog increased strongly and was EUR 226.9 million (19.4)
- Revenue grew by 12.9% and was EUR 51.5 million (45.6)
- EBITDA totalled EUR 6.0 million (5.6)
- Adjusted EBITDA increased by 4.6% and was EUR 6.7 million (6.4) (adjusted with IPO related expenses of EUR 0.6 million)
- EBIT was EUR 1.9 million (2.4)
- Adjusted EBIT totalled EUR 2.8 (3.4)
- Net cash flow from operating activities was EUR -5.4 million (6.0)
- Earnings per share increased to 0.05 euro (0.03)
- The Board of Directors proposes that no dividend will be paid for the financial year 2021
CEO Mika Pirneskoski:
2021 was a pivotal year for Lamor. We won significant multi-year service contracts and improved our delivery capability to meet the needs of large projects. We also developed our business and sustainability work. To enable our growth strategy, we arranged a successful share offering and listing on the Nasdaq First North Premier Growth Market Finland marketplace in December.
Our strategy to be globally local demonstrated its functionality during the year. Thanks to our strategy, we have been able to act very efficiently, even though the coronavirus measures have restricted mobility.
In 2021, our revenue amounted to EUR 52 million, growing 12.9 per cent from the previous year. The NCEC agreement in Saudi Arabia contributed significantly to revenue growth, albeit much of the revenue from the large service project will be recorded in the coming years. We won all major tenders we participated in, so we can be very happy with our performance.
At the end of the year, our order backlog was EUR 227 million, which is more than 10 times higher than in previous years. Of this, the equipment and services to be delivered in 2022 will account for approximately EUR 79 million, and the remaining equipment deliveries of the order backlog and the delivery of service contracts will take place during several coming years.
During the year, we signed a major service agreement to strengthen oil spill response capabilities in the Red Sea region in Saudi Arabia, as well as two project agreements with Kuwait Oil Company. We also participated in several different oil spill response exercises around the world. Exercises play a very important role in maintaining functional capacity: "You play the way you practice" applies both in sports and in oil spill control.
Our adjusted operating profit margin for the full year was 5.5 per cent, which did not yet meet our long-term target of 14 per cent. However, in the second half of the year, profitability improved, and we achieved an adjusted operating profit margin of 10.5 per cent. In line with our scalable business model, revenue growth supports the achievement of the target, and we are determined to achieve the targeted profitability levels.
One of last year's main events was Lamor's listing on the Nasdaq First North Premier marketplace in December. We had been preparing for the IPO for a long time, and it was a great effort from our entire organisation. Our goal with the IPO was to raise funds to implement our growth strategy and strengthen our capital structure. Our extensive service projects require significant working capital, and thanks to the IPO, our balance sheet is now much stronger. We raised gross proceeds of EUR 35 million in the offering and received over 10,000 new shareholders.
In addition to the IPO, we started two other important development projects, a growth engine project related to the plastic waste problem and a sustainability reporting development project. The aim of the growth engine project is to help solve the global plastic waste problem. We started the first projects in cooperation with RiverRecycle Oy in Southeast Asia and made an investment in liquefied waste plastic technology. Our goal is to continuously search for and develop new environmental solutions so that we can offer our customers even more comprehensive solutions.
In 2021, we worked hard to develop our sustainability. For the first time, we defined a sustainability strategy and the most important indicators, as well as calculated the carbon footprint and handprint of our operations. We developed our sustainability reporting, and as a sign of our good work, we were the first Finnish company to get the Nasdaq Green Equity Designation recognition in January 2022. We want to be a model company in the field of sustainability and continue to develop our operations to be increasingly sustainable, for example by designing and building all our waste and water treatment solutions in accordance with the principles of sustainable development.
Our personnel's job satisfaction and safety are important sustainability themes for us, and our goal is to further develop our leadership expertise so that we can respond well to the changes caused by our growth. We estimate that our number of employees will increase significantly in the coming years, although the number may vary considerably each year depending on the order backlog and project situation.
In 2022, thanks to big service contracts, our business will have a strong focus in the Middle East, and we believe that these agreements will enable significant organic growth over the next few years. In addition, we have good growth opportunities in South America, where we have been a strong local player for several years. After the reporting period, in January 2022, we opened a sales office in Norway to offer our water treatment solutions to the local fish farming market and signed a letter of intent to establish a joint venture company in Saudi Arabia.
Sustainability and environmental values have become strongly emphasised in recent years, and we believe that this development will continue. We estimate that the market for environmental solutions will grow significantly in 2022. Our revenue is growing rapidly, and we expect us to reach the long-term target of EUR 100 million already in 2022.
The unjustified military actions taken by Russia against Ukraine increases the overall uncertainty and impacts the outlook of the world economy. The military actions are exposing especially our business in Russia, but the impact is, however, seen low. In addition, they may create disturbance for instance in our supply chain and logistics. We are following the situation and reacting to it actively.
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Guidance for 2022
Lamor estimates its revenue to be at least 110 million for the full year 2022. Adjusted EBIT is estimated to be at least EUR 12 million.
Lamor has a high order backlog coverage to back up its revenue and result for 2022. Since a significant part of the revenue is generated by large service project deliveries, any major delay in the timing of the project progress is posing a risk for 2022 performance.
The unjustified military actions taken by Russia against Ukraine increases the overall uncertainty and impacts the outlook of the world economy. The military actions are exposing especially Lamor’s business in Russia, but the impact is, however, assessed to be low. In addition, the military actions may create disturbance for instance in Lamor’s supply chain and logistics.
In addition, any potential virus variant of Covid-19 could have a negative impact on Lamor's revenue and result in 2022 by impacting Lamor’s capabilities to deliver projects efficiently.
Board of Directors’ proposal for profit distribution
The Company aims to distribute annual dividends, while keeping growth as the Company’s most important target. The Board of Directors proposes that no dividend will be paid for the financial year 2021. The parent company’s distributable funds total EUR 34,009,086.68 which includes EUR -7,478,375.60 in net loss for the year.
Webcast for analysts and media
A live webcast for analysts and media will be arranged on 3 March 2022 at 14:00 EET. The event will be held in English. The report will be presented by CEO Mika Pirneskoski and CFO Timo Koponen. The webcast can be followed at lamor.videosync.fi/q4-results-2021. A recording of the webcast will be available later at the company’s website at investors.lamor.com/reports-and-presentations.
Mika Pirneskoski, CEO, Lamor Corporation Plc, tel. +358 40 757 2151
Timo Koponen, CFO, Lamor Corporation Plc, tel. +358 40 749 2986
Danske Bank A/S, Finland Branch, tel. +358 50 590 7667
Lamor in brief
Lamor is one of the leading global providers of environmental solutions. Lamor provides its customers with equipment used for oil recovery, waste management and water treatment as well as versatile environmental solutions and services, such as clean-up and preparedness services related to oil spill response and oil spills, services for the treatment of waste and tailored and adapted water treatment solutions. Lamor operates together with its local partners, offering a wide selection of solutions, which can be tailored according to the needs of each customer, and aiming to clean the world, for which the company has worked since its incorporation. The company's share is listed on the Nasdaq First North Premier Growth Market Finland marketplace maintained by Nasdaq Helsinki under the trading code LAMOR. Further information: www.lamor.com
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