Lamor Corporation Plc Company release 28 February 2023 at 09:00 a.m. EET
Lamor’s Financial Statements Release for 2022: A great year of growth behind - growth investments in line with the strategy continue
This release is a summary of Lamor’s Financial Statements Release January–December 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.
October–December 2022 in brief
- Revenue increased by 71.4% to EUR 28.0 million (16.3)
- EBITDA was EUR 2.3 million (1.9)
- Adjusted EBITDA increased by 34.7% and totalled EUR 2.7 million (2.0) or 9.5% of revenue
- EBIT was EUR 0.8 million (0.5)
- Adjusted EBIT increased by 83.1% and amounted to EUR 1.2 million (0.7) or 4.5% of revenue
- Net cash flow from operating activities was EUR 0.7 million (1.1)
- Earnings per share (basic) was EUR -0.03 (0.03)
- Orders received was EUR 11.4 million (13.9)
January–December 2022 in brief
- Revenue increased by 147.8% to EUR 127.7 million (51.5)
- EBITDA was EUR 16.7 million (6.0)
- Adjusted EBITDA increased by 184.0% and totalled EUR 19.0 million (6.7) or 14.9% of revenue
- EBIT was EUR 10.0 million (1.9)
- Adjusted EBIT increased by 345.4% and amounted to EUR 12.6 million (2.8) or 9.9% of revenue
- Net cash flow from operating activities was EUR -6.5 million (-5.4)
- Earnings per share (basic) increased by 171.3% to EUR 0.13 (0.05)
- Impairment losses from Russian business amounted to EUR 2.0 million
- Orders received was EUR 87.4 million (260.8)
- Order backlog at the year-end was EUR 203.1 million (226.9)
- The Board of Directors proposes that no dividend will be paid for the financial year 2022
CEO Mika Pirneskoski
In 2021, Lamor’s order backlog reached completely new heights. Followingly, year 2022 was a game changer in terms of revenue, which was roughly 2.5 times higher than during the comparison period. Significant clean-up projects in Peru and Ecuador, large-scale service agreements in Saudi Arabia and Kuwait as well as growth in other business operations increased the revenue to 128 million euros.
Lamor’s strong growth in 2022 is a remarkable achievement from the whole organisation and a testament that our strategy is working. The cornerstone of our strategy is a global business model combined with local know-how that allows us to offer our solutions in our customers’ operating environment with global quality standards.
Thanks to our scalable business model, the revenue growth also supports longer-term positive development of our profitability. The adjusted EBIT for 2022 was 9.9 per cent, which is, however, below our long-term target of 14 per cent. We are determined to continue our efforts to reach the target profitability level.
Local presence ensures successful business in all market areas
One of our largest projects in 2022, and an example of our scalable business model, was related to a large environmental incident in a Repsol terminal in Peru in January 2022. At the time of the incident, we had fewer than 30 full-time employees in our local organisation and most of our assets and personnel were already assigned to other customer projects. Our quickly scalable business model allowed us to engage a team of 800 people in Peru to work on the incident. Our customer was extremely satisfied with the quality of our service as well as our flexibility during the fast-changing situation. The learnings from the sizeable operation in Peru will be very useful for us also in the future.
The soil remediation projects in Kuwait progressed as planned during 2022 and our aim is to start the actual remediation work during the first half of 2023 as originally planned. The second phase of the Kuwait excavation, transportation and remediation projects is expected to be awarded during the first half of 2023. The ongoing projects in Kuwait are excellent references for Lamor and we expect them to open other interesting business opportunities in the market area in the coming years.
The environmental preparedness project in Saudi Arabia moved to maintenance phase in 2022. The project has tied up more working capital than initially estimated, but we expect the situation to normalise during the first part of 2023. Saudi Arabia has set targets to further expand their environmental preparedness capabilities, which may bring additional business opportunities for us also in the future.
In July, we communicated having been awarded three large tenders in Bangladesh. We are building the first modern reception facility for waste from vessels in Mongla Port; we are also delivering a significant number of oil spill response equipment and vessels to the port authority. The projects started close to the year-end 2022 and they are a great example of the synergies between Lamor’s environmental protection and material recycling solutions. The solutions typically have the same clientele, which creates great business synergies between the solutions. The expansion activities of the Bangladesh ports are expected to continue during the coming years, and the on-going projects may enable us to expand our business outside the Mongla port as a solution provider for both environmental protection and material recycling.
Lamor to invest in chemical recycling of plastics
In June, we communicated our plan to invest in Finland’s first industrial-scale chemical recycling plant of plastics in the Kilpilahti industrial area located in Porvoo, Finland. In the first phase, the plan is to build a 10,000-tonne chemical recycling plant in Kilpilahti, and the medium-term plan is to build a decentralised 40,000-tonne chemical plastics recycling capacity in Finland. The first-phase investment of the project was made in the final days of 2022 and the project is moving forward with full speed in 2023 with the technology selection and detailed process planning. Our plan is to start the actual construction work during the latter part of the first half of 2023.
Our plan is to create a proof-of-concept chemical recycling plant of plastics and references in Finland, after which we aim to utilise our global presence and partner network to build similar plants in our strong market areas. Our target is to develop a recycled plastics project portfolio of 100,000 tonnes during the strategy period 2023–2025.
The cornerstones of the updated strategy
In November, we updated our strategy, which aims for long-term growth and a leading market position in selected market areas and environmental solutions. Lamor has identified significant business potential in all its market areas but will concentrate on achieving growth and solid market position especially in the Middle East and South America. Winning significant new projects and taking part in solving the global plastic challenge are also key factors of our three-year strategy period.
The cornerstone of our strategy is Lamor’s unique globally local partner network model. Utilising the network will allow us to bring our customers the best knowhow and technology. On the other hand, working with local partners will enable us efficient scaling and compatibility with local conditions and customs. With this operating model we will be able to achieve a successful transition from project deliveries to recurring local operations and to contribute positively to our customers and partner network.
Focus on environmental awareness supporting the business
Sustainability and environmental awareness have been strongly emphasised over the past few years and we expect the trend to continue. We have committed in our business to support the green transition and as a highlight of this, we were the first Finnish company to receive Nasdaq Green Equity Designation in January 2022. Our business consists of environmental protection and material recycling solutions, and we are promoting circular economy, protection of biodiversity and careful use of scarce resources with our solutions.
We have further developed our sustainability reporting during the year and our goal is to find ways to decrease our negative impact and increase our positive impact also during the coming years.
Looking towards 2023
In 2022, we took significant steps in restructuring our organisation as well as our operating model and recruited many new professionals. With these changes we will be able to execute our strategy more effectively as well as to manage our operations and project execution more efficiently and closer to the customers. The extensive co-operation between the market areas and global functions enables not only efficient project deliveries but also further development of our offering as well as harmonising our processes on a global level. We believe that this change will help us to reach our profitable growth targets.
The investments made especially on the personnel helps us to implement our growth strategy and to reach our long-term financial targets, but we expect them to temporarily lower our profitability in 2023. These investments are, however, necessary to increase our revenue to the next level in the coming years.
Due to the favourable market development of environmental solutions, we strongly believe that Lamor will successfully continue on its growth path. The global political situation will still cause uncertainty especially in the supply chains and possibly through continued cost inflation also for Lamor’s business.
We have set ambitious growth targets for our 2023–2025 strategy period and reaching those goals will require winning significant new business during the years to come. We are moving to 2023 with a strong order book and the on-going large-scale projects will support our growth targets both from the customer reference as well as from the local presence perspective.
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Guidance for 2023
Lamor estimates that its revenue for 2023 will be in the range of EUR 120–135 million and that the adjusted operating profit (EBIT) margin for the full year 2023 will be in the range of 8–11%.
Lamor has a strong order backlog for 2023. Since a significant part of the revenue is generated by large service project deliveries, any major changes in the project progress would have an impact on revenue and profit for 2023.
Lamor is participating in several major tendering related discussions and expects requests for tendering to open and the decisions in the tenders to be made during 2023. The timing of the tenders as well as Lamor’s success in the processes will have an impact on the revenue and profitability in 2023.
Lamor has recruited a significant number of new professionals in 2022. This will support reaching the company’s long-term financial targets but will increase the relative share of fixed expenses in 2023.
Lamor follows closely the changes in the geopolitical environment in its operating countries. These changes may have either a negative or a positive impact on Lamor’s business, for instance through changes in the schedules or cost structures of the projects.
Board of Directors’ proposal for profit distribution
The parent company’s distributable funds on 31 December 2022 EUR was 35,588,503.10 of which the net profit for the financial year was EUR 1,009,015.30. The Board of Directors proposes to the Annual General Meeting that no dividend will be paid by the company and that the profit for the financial year 2022 will be entered in the retained earnings.
Webcast for shareholders, analysts and media
Webcast for shareholders, analysts, and media will be arranged on 28 February 2023 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/q4-2022.
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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