Source: Inderes

Metacon is scheduled to release its Q2 results on Thursday, August 21. We estimate a significant increase in revenue, primarily related to the large-scale Motor Oil order. However, profitability is anticipated to remain negative, as variable raw material and consumable costs are likely to scale up with revenue. In the upcoming report, our attention will focus on the management’s comments regarding the Motor Oil orders' progress, insights into demand, and further details on the company's financial position.

We expect strong revenue growth

We estimate that Metacon’s Q2 revenue will amount to 59.3 MSEK, a strong increase from 11.3 MSEK in Q2’24. This growth is mainly attributed to the anticipated revenue contribution from the Motor Oil order. To our understanding, the second quarter has largely consisted of the component manufacturing phase of the Motor Oil project, which involves significantly higher costs, enabling increased revenue recognition.

In the bigger picture, however, Metacon’s investment story is based on long-term commercial success, so we do not place too much emphasis on reported revenue in a single quarter, which can fluctuate quite heavily due to the project-driven nature of the business. Therefore, we place greater emphasis on the continued progress of the Motor Oil project and on the company’s order intake, which we view as a better indicator of overall business development. For Q2, we estimate that order intake amounted to around 23 MSEK, mainly consisting of an electrolysis plant order from a company in Morocco.

Earnings are expected to remain on negative side

We forecast that Metacon’s Q2 EBIT will remain negative at -9.8 MSEK, as revenue and gross margins are still insufficient to cover fixed costs. Given the company’s relatively low debt levels, our net income estimate aligns relatively closely with its operating profit.

From a cash flow perspective, we expect that the negative operating result will continue to have a negative effect on liquidity. As of the end of Q1’25, Metacon held a cash position of 79.2 MSEK, 45.3 MSEK of which was restricted as collateral for bank guarantees. However, in Q2, Metacon fulfilled the requirements for the release of the advance guarantee. In addition, we expect that Metacon will receive more installment payments in the coming quarters, linked to the achievement of milestones in the Motor Oil project. As a result, we are not overly concerned about the short-term liquidity situation. In the longer term, however, sustained order flow is required for Metacon to rely on its own cash flows.

No guidance from Metacon, but a more cautious approach around targets is expected

Metacon does not provide financial guidance or make concrete comments about the future. Instead, the company only refers to its financial targets, which are revenues of 500 MSEK and reaching positive cash flow in 2025. To achieve these targets, Metacon needs to secure one to two similar-sized projects to Motor Oil, according to the company. Our current full-year revenue estimate for 2025 is 291 MSEK, with an EBITDA estimate of -23.5 MSEK, so we would not be surprised to see more cautious comments regarding the targets or to see them pushed forward to, e.g., 2026.

In the upcoming Q2 report, we will be closely watching for updates on the progress of the Motor Oil orders, for demand-related information and for further insight into the company’s financial position.