📢 **Epiroc Q1 2025 Earnings Call: Revenues Up 9% to SEK 16,105M, Operating Profit Falls 4%!**
**Key Highlights:**
✅ **Financials** – Epiroc AB (STO: EPI A) reported Q1 2025 revenues of SEK 16,105 million, up 9% YoY, with an organic increase of 2%, beating the consensus estimate of SEK 15,950 million. Operating profit fell 4% to SEK 2,854 million, including items affecting comparability of SEK -150 million (primarily acquisition-related costs and long-term incentive program adjustments), missing the SEK 2,900 million forecast. The adjusted operating margin was 18.7%, down from 20.4% in Q1 2024. Basic earnings per share were SEK 1.59, below the expected SEK 1.65.
✅ **Operations** – Orders received grew 8% to SEK 15,465 million (organic growth of 1%), with large equipment orders at MSEK 600 (down from MSEK 900 in Q1 2024). Mining activity remained strong, particularly in automation and digitalization solutions, but construction demand weakened further, impacting the Tools & Attachments segment. Operating cash flow rose 12% to MSEK 1,970 million, supported by inventory reductions. Net debt/EBITDA ratio increased to 1.09 from 0.97 in Q3 2024.
✅ **Strategy** – CEO Helena Hedblom highlighted Epiroc’s focus on innovation, noting the company’s largest-ever contract for autonomous and electric-powered mining equipment with Fortescue, alongside a significant order from Hindustan Zinc in India. Epiroc reaffirmed its commitment to sustainability, targeting a 24% CO2e emissions reduction from operations by 2030, building on 2023’s progress. Workforce reductions initiated in 2024 continued, aiming to align the Tools & Attachments segment with demand and improve service margins.
✅ **Outlook** – Epiroc expects continued mining strength but anticipates ongoing weakness in construction, with Tools & Attachments facing dilution from acquisitions like Stanley Infrastructure. Global trade tensions, including U.S. tariffs, pose risks, though Epiroc’s domestic sourcing mitigates direct impacts. A 1–2% currency headwind is projected if March 2025 rates persist. The company maintained its 2025 adjusted operating margin guidance of 19–20%, reflecting cost-saving measures and efficiency gains.
**Keywords:** Epiroc Q1 2025 earnings, EPI A stock update, mining equipment performance
📈 **Buy, Hold, or Sell?**
Epiroc (EPI A) is a **Hold**. Q1 revenue growth of 9% to SEK 16,105 million beat estimates, but the 4% operating profit decline to SEK 2,854 million and a lower adjusted margin (18.7%) signal challenges. Shares traded at SEK 211.60, with a market cap of SEK 255.66 billion and a P/E ratio of 25.68, above the industry average of 16.9, suggesting a premium valuation. Mining strength and strategic contracts are positives, but construction weakness, tariff risks, and a high P/E warrant caution. Hold for investors seeking mining sector exposure with balanced risk.
📊 **Max Position** – Allocate **4–5%** in a diversified portfolio. Epiroc’s SEK 255.66B market cap, SEK 60B in 2023 revenue, and innovation in automation and electrification offer growth, but a premium valuation, construction headwinds, and tariff uncertainties add risk.
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