Lamor Corporation Plc Company release 15 November 2022 at 09:00 a.m. EET
Lamor Interim Financial Report 1 January–30 September 2022: Strong growth continued
This release is a summary of Lamor’s Half-Year Financial Report 1 January–30 September 2022. The complete report is attached to this release as a pdf file. It is also available on the company website at investors.lamor.com.
July–September 2022 in brief
- Revenue increased by 98.0% to EUR 34.2 million (17.3)
- EBITDA was EUR 4.9 million (3.3)
- Adjusted EBITDA increased by 26.9% and totalled EUR 4.9 million (3.9) or 14.3% of revenue
- EBIT was EUR 3.0 million (2.0)
- Adjusted EBIT increased by 18.6% and amounted to EUR 3.1 million (2.6) or 9.0% of revenue
- Net cash flow from operating activities was EUR -5.8 million (-4.1)
- Earnings per share increased to EUR 0.07 (0.06) or by 9.7%
- Orders received was EUR 32.3 million (158.8)
January–September 2022 in brief
- Revenue increased by 183.2% to EUR 99.7 million (35.2)
- EBITDA was EUR 14.4 million (4.2)
- Adjusted EBITDA increased by 246.3% and totalled EUR 16.4 million (4.7) or 16.4% of revenue
- EBIT was EUR 9.2 million (1.4)
- Adjusted EBIT increased by 428.3% and amounted to EUR 11.4 million (2.2) or 11.4% of revenue
- Net cash flow from operating activities was EUR -7.2 million (-6.5)
- Earnings per share increased by 1,092.6% to EUR 0.16 (0.01)
- Impairment losses from Russian business amounted to EUR 2.0 million
- Orders received was EUR 76.0 million (247.0)
CEO Mika Pirneskoski:
We continued our strong growth path also during the third quarter of 2022. During the quarter we nearly doubled our revenue compared to the previous year. Correspondingly during January-September 2022, we have almost tripled our revenue to 99.7 million euros. The main drivers behind the revenue growth were our significant long-term service agreements in the Middle East as well as the increased volume of our core business. The soil remediation projects in Kuwait have progressed well and we estimate that the actual remediation work will start in early 2023. Our Saudi Arabian project is in maintenance phase with the new contract party, and we will continue finalising the project handover documentation. These projects and due to our local presence, we aim to strengthen the preconditions for achieving the growth targets in our important market areas, in accordance with our strategy.
The significant increase in the business volume has also led to improvement in profitability. When comparing the profitability level of this year, it is important to notice that during the comparison period, the extraordinary high volume of equipment business led to a high EBIT margin. Along with the growth, the level of working capital has also increased significantly especially in the Kuwaiti projects, where the cash flow is expected to turn positive as the project progresses.
New project in Bangladesh – a significant achievement in Asia
In July we announced having won three significant tenders in Bangladesh and the definitive agreements were signed in September. We are building the first modern MARPOL waste reception facility in the Mongla port, as well as providing a significant amount of oil spill response equipment and vessels for the port authority. The total value of the contract is approximately 25 million euros and most of the revenue will be recognised during 2023.
The project in Bangladesh highlights the synergies between our environmental protection and modern circular economy solutions. The solutions typically share the same clientele; therefore, the businesses support one another extremely well. In connection with the expansion of Mongla port, tenders for service projects may also open later. In addition, there is another larger-scale port expansion project underway in Chittagong, Bangladesh, related to which tenders are possible in the future.
The market in the Middle East is active, and we have participated in significant tenders during the period. Referring to the information given in our half-year report, we expect that the final results of the tendering of the second phase of the SKETR projects in Kuwait will be announced during 2023. All in all, the activity in the Middle East supports our vision that the market area will be an extremely important growth market for Lamor also in the future. In the current energy and geopolitical climate, we see that this is a strength for us.
It is characteristic for the business that substantial project orders do not materialize evenly. In the comparison period, the orders received were exceptionally high due to the Kuwaiti soil remediation project orders which are the largest ones in Lamor´s history.
Strategic targets and growth
In October, after the closing of the reporting period, we published changes to our Management Team. The aim of strengthening the Management Team is to take the implementation of our strategy of profitable growth closer to the customer interface by leading our operations closer to the customer and project execution. The co-operation of the market areas and global functions will enable efficient project deliveries, further development of our offering and standardisation of processes on a global level. We have invested significantly in our personnel to enable further growth, which could have a negative short-term impact on our profitability. However, we are convinced that these changes will enable profitable growth in the long-term.
Our business volume over the past 12 months has been nearly 120 million euros. As a part of our annual strategy update, we will also update our long-term financial targets. This update aims to give a better visibility of our growth targets to our investors.
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Guidance for 2022
As released on 10 May 2022, Lamor estimates its turnover to be at least EUR 120 million in 2022. Adjusted EBIT is estimated to be at least EUR 14 million.
Lamor has a strong order backlog for 2022. Since a significant part of the revenue is generated by large service project deliveries, any major, unpredictable delay in the project progress would have a negative impact on revenue and profit for 2022.
Lamor closely follows how the Russian invasion of Ukraine is affecting the company’s operating environment. Due to the war, Lamor has ceased the sales activities of the products and services in Russia. War-related global cost inflation as well as the shortage of raw materials and components are having an effect also on Lamor’s business. Lamor will continue to monitor the situation carefully.
In addition, any potential virus variant of the COVID-19 could have a negative impact on Lamor’s revenue and result in 2022 by impacting Lamor’s capabilities to deliver projects efficiently.
Webcast for shareholders, analysts and media
Webcast for shareholders, analysts and media will be arranged on 15 November 2022 at 10:00 a.m. EET. The result will be presented by CEO Mika Pirneskoski and CFO Timo Koponen. The webcast includes a Q&A session, and participants can ask questions in English and Finnish via the event chat room. The webcast can be followed at https://lamor.videosync.fi/results-q3-2022/.
A recording of the webcast will be available later at the company’s website at investors.lamor.com/reports-and-presentations.
Lamor’s Capital Markets Day 2022 will be held on Tuesday 22 November 2022 at 2:00 – 4:30 p.m. EET. The event can be followed at https://lamor.videosync.fi/cmd-2022/.
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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