Sunex reported its 3Q23 results of EBITDA PLN 6.5m, -61.8%y/y and 44.7%q/q which is 4.5% above our forecast. Still, on the bottom line due to higher financial leverage arrived at PLN 2.2m, -83%y/y and 77.7%q/q which was below our forecast of PLN 4.6m. The company held also today a conference call with analysts’. Here are the main highlights:
• The company awaits the decision of NCBiR regarding the subsidy to it new production line around April/May. First rehearsal in front of the NCBiR commission are likely to take place in January.
• Sunex expects that the situation on the renewable market to improve most likely in 2-3Q24. This would be connected with the new subsidies programmes coming on line in Germany and Austria. The company’s representatives are also experiencing similar feedback on the French market.
• Current weak situation on the market stems from the fact that the producents are coming down from the high inventory levels accumulated at the beginning of the year after exceptionally good 2022.
• The new production line in Raciborz is set to be fully automatized which in the long run is set to lower costs of production.
• In case the demand for the mounting system comes back the company could produce twice more of such devices.
• Sunex is not revealing its product mix.
• Debt covenants are set at the level of 3.5x. Sunex does not see the risk of breaking it any time soon.
• High level of company’s inventories consist in bulk from raw materials i.e. stainless steel, aluminium. Sunex does not envisage any write-offs at the year end.
• Sunex is going to develop its own sales channels going forward.
• The company still intends to recruit specialist i.e. hydrogen technicians, IT.
• D&A is set to increase PLN 0.35m per month in 2024 after delivery of the new investment. Opinion: Neutral. Outlook presented by the company is line with our view on 2024 prospects.
