Aug 30, 2024

Proventia Group Corporations's Half-Year Financial Report January-June 2024

Slower-than-expected growth and structural change in the Test Solutions business were reflected in net sales and profitability

April–June 2024 in brief

  • The Group’s net sales decreased by 6.3% from the previous year to EUR 13.3 (14.2) million.
  • Operating profit was EUR 1.4 (1.8) million.
  • Profit for the period was EUR 1.1 (1.4) million.
  • Earnings per share (undiluted) were EUR 0.07 (0.09).

January–June 2024 in brief

  • The Group’s net sales decreased by 12.3% from the previous year to EUR 24.3 (27.7) million.
  • Operating profit was EUR 1.7 (2.6) million.
  • Profit for the period was EUR 1.2 (2.1) million.
  • Earnings per share (undiluted) were 0.07 (0.13).
  • The group had 213 (203) employees at the end of June.

The figures in brackets refer to the same period in the previous year.

President and CEO Jari Lotvonen:

In the first half of the year, net sales remained at a lower level than in the comparison period, amounting to EUR 24.3 (27.7) million. This decrease resulted mainly from the project-based nature of the Test Solutions business. Projects were still largely in their early phases, and no significant revenue was recognized. In the OEM customer segment, emission control systems deliveries increased slightly from the previous year, although they were lower than expected. The operating profit for the first half of the year stood at EUR 1.7 (2.6) million, with the operating profit rate 7.1% (9.4%).

In Off-Road Machinery Systems and Components, net sales remained at the comparison period’s level at EUR 22.2 (22.4) million. Demand did not grow as expected in the agricultural machine industry, which is a significant segment for us. Stock levels of agricultural machine retailers were high, as demand for machines fell globally among end customers. The production volumes of machine manufacturers fell short of estimates, resulting in emission control system and thermal component deliveries falling below expectations. The delivery volumes of retrofit systems were significantly lower than the previous year.  New research and development projects in emission control and battery products proceeded as planned. We also continued our investments to develop our plant in the Czech Republic and to increase its production capacity.

Test Solutions’ net sales for January–June decreased by 60% from the comparison period. The decrease in net sales results is a result of the structural change in the business model from a project-based to product-based business, as well as the timing of customer project revenue recognition, which occurs mainly at the end of the year. In the Test Solutions business, several customer projects from the Proventia EVA (Evaluate, Validate, Approve) product family are in production. Among these customer projects is the first EVA H2 test laboratory, which we developed for testing the performance and durability of hydrogen fuel cells. This will be delivered to Intelligent Energy in the UK.

We have continued our sustainability activities, set our climate goals in accordance with the Science Based Targets initiative (SBTi) and prepared a roadmap to achieve these goals. Our aim is to reduce our Scope 1 and Scope 2 emissions by 50% by 2030 and achieve zero net emissions by 2050. We have started to prepare for sustainability reporting in accordance with the Corporate Sustainability Reporting Directive (CSRD), which will apply to us from the 2025 financial year.

During the first half of the year, we conducted personnel and customer satisfaction surveys. The personnel survey produced an eNPS of 34 (17), and the customer satisfaction survey an NPS of 71 (51). Our agility, our ability to respond to customer needs and our plant in the Czech Republic were given especially high ratings in the customer satisfaction survey.

Key figures

 

Outlook

Net sales and operating profit for 2024 are both estimated to be lower than 2023. (Previous estimate: Net sales are expected to increase slightly in 2024 from the 2023 level, while the operating profit is expected to remain at the 2023 level.) In 2023, net sales were EUR 54.3 million, and the operating profit rate was 11.3%.

Attachment: Half-year financial report January-June 2024 (PDF)

More information:

Jari Lotvonen
CEO, Proventia Group Oyj
puh. 0400 68 4072
jari.lotvonen(at)proventia.com

Proventia Group is a technology company operating in global markets. Proventia develops and manufactures systems and components that reduce the emissions of off-road machines and improve their energy efficiency, and modular test centers for the development and testing of batteries and hydrogen fuel cells. Company's customers include the leading global names of the  off-road machinery and vehicle industry. Proventia takes people, the environment and future generations into account in all of its operations, with zero emissions being the company's vision.  

The company employs approximately 200 industry professionals in Finland, the Czech Republic, and the UK. www.proventia.com