May 24, 2024

Proventia Group Corporation's Business Review January- March 2024

Impact of project business shown as a decrease in net sales and profitability

January-March 2024 in brief

  • The Group’s net sales were EUR 11.0 (13.5) million.
  • Operating profit was EUR 0.4 (0.8) million.
  • Profit for the period was EUR 0.1 (0.7) million.

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

President and CEO Jari Lotvonen:

The net sales for the first quarter of 2024 were lower than in the comparison period, amounting to 11.0 (13.5) million euros. The decrease in net sales was largely due to the project-based nature of the Test Solutions business. As the projects were still in their early stages during the first quarter, no significant revenue was recognized. As a result of the net sales decrease, the profit for the period remained at EUR 0.1 (0.7) million with an operating profit margin of 3.3 (6.0) percent. The cash flow for the first quarter was strong, and the group’s cash reserves were 13.9 million euros at the end of March 2024, an increase of 2.6 million euros from the end of the previous fiscal year.

In the Off-road Machinery Systems and Components business, net sales decreased by 4.4 percent to 10.5 million euros from the previous year’s 11.0 million euros. The decrease was due to delivery volumes of retrofit systems being lower than in the corresponding period last year. In the OEM customer segment, deliveries of emission control systems were slightly higher than in the comparison period, and the demand for thermal insulation remained at the previous year’s level. R&D and pilot projects for emission control and battery systems for customers proceeded as planned, and negotiations over new customers and projects have made good progress. In addition, we decided to expand our Czech plant by approximately 2,000 square meters, which ensures a sufficient production capacity for future needs. The expansion is expected to be completed in August 2025. After the review period, we signed a cooperation agreement with MAN Engines, a new engine manufacturer customer, for the development and manufacturing of emission control systems.

In the Test Solutions business, several projects belonging to the Proventia EVA (Evaluate, Validate, Approve) product family are either ongoing or about to start and will be recognized as revenue at the end of 2024 and in 2025. During the first quarter, projects were still in their initial phases, and no significant revenue was recognized. As a result, the net sales for the Test Solutions business decreased by 81.2 percent from the previous year. After the review period, we received an order from a new customer for Proventia EVA Safe, a module designed for battery misuse tests.

Geopolitical tensions and general uncertainty in the markets can be seen as caution in our customers’ estimated delivery volumes. However, the entry of new OEM products into serial production during the rest of the year will balance the situation.

Key Figures

 

* The key figure is not available for the period 1-3/2023 as IFRS calculations have not been prepared for the comparative period 1-3/2022.

Outlook

Although the short-term market outlook is characterized by caution, long-term megatrends are favorable for all Proventia’s business areas.

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: Business Review January-March 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