Nurminen Logistics downgraded its 2025 earnings guidance

Translation: Original published in Finnish on 10/21/2025 at 07:49 am EEST

Yesterday, Nurminen Logistics downgraded its earnings guidance for 2025, while the revenue guidance remained unchanged. The profit warning was a clear negative surprise to us, as we had expected the company to achieve clear earnings growth, which means we see downward pressure on our estimates for at least this year. We will review our estimates in connection with the company's Q3 results to be published on Thursday.

Earnings guidance downgraded due to challenges in the Baltics and Central Europe

In its updated guidance, the company expects its revenue to increase from the comparison period (2024: 105 MEUR), but comparable EBIT to be slightly below or at the same level as the previous year (2024: 19.1 MEUR). Previously, in addition to revenue growth, the company also expected its comparable EBIT to grow.

According to the company, the guidance downgrade was due to weaker-than-expected development in the volumes of the Baltic businesses. Nurminen now estimates that the Baltic businesses’ share of the Group’s revenue will decrease to 25% from 45% in the comparison period. Further, continued railway network improvement investments in Central Europe have hampered the efficiency of rail transport more than anticipated by extending transport times, which has also negatively impacted the development of the Swedish business area (Essinge Rail).

As a positive, the release mentioned the company's cost savings of over 1 MEUR for 2026 and the benefits brought by the improvement of European railway infrastructure in the coming years.

The guidance downgrade is a clear disappointment, and our estimates are subject to downward pressure

The profit warning came as a clear negative surprise to us, as before it we had expected the company's adjusted EBIT to rise to 21.8 MEUR this year. Thus, based on the wording, the new guidance puts clear downward pressure on our forecasts for the current year (roughly ~15%). We also consider it quite likely that Nurminen's Q3 performance will fall short of our previous expectations (our Q3 preview, published yesterday, can be read here), as the company ended up downgrading its guidance afte a review at this point in the year. We will update our estimates and view on the company in connection with the Q3 results to be published on Thursday, when we will receive more information on the company's recent development, more detailed reasons behind the downgraded guidance, and the outlook. 

However, based on the background information provided in the release, it appears that the volumes of the Baltic businesses have continued to decline and the operating environment has become more challenging, as the revenue of the Baltic businesses was 18.9 MEUR in H1. Relative to our current revenue estimate of around 122 MEUR for the current year, a 25% share would mean a revenue level of some 30–31 MEUR for the business for the full year. Despite the cut we made to our Baltic revenue estimates in connection with the Q2 report, we estimate that there is still downward pressure on them with current information (Inderes' current Baltic revenue forecast 2025: ~36 MEUR). At the same time, it should be noted that the development of the company's Baltic business is affected by volatile raw material transports, which can vary significantly between quarters and years (cf. Baltics 2023: 74.8 MEUR, 2024: 46.8 MEUR). On the other hand, with the volume decline we estimate based on current information, possible re-routings in raw material transports cannot be completely ruled out, which would naturally be negative for the company's medium-term outlook. For Nurminen's shareholders, the impact of the negative development in the company's highly profitable business is softened by the significant minority interest (49%) in the Baltic companies. In principle, despite the downgraded guidance, the company could still achieve earnings growth for Nurminen's shareholders if the earnings reached last year's level, albeit more moderately than our previous expectations.

Similarly, the development of Essinge Rail, acquired at the end of last year, has presumably been disappointing this year, as the company's development in the early part of the year was depressed by, e.g., the delayed arrival of summer, as it focuses on transporting consumer products (e.g., beverages). In our current assumptions, we had already expected the general economic uncertainty to be reflected in the company's development during the rest of the year, but we estimate that logistics challenges in Central Europe may have hindered development even more than we expected also in H2 (NB! more detailed figures from within the Rail Business have not been reported). We estimate that extended delivery times have negatively impacted at least the profitability of the business. In our view, the key question for the business outlook is whether the delays in transport times have been reflected in possible customer losses, which could affect medium-term development negatively. We also estimate that the current challenges may have at least temporarily negatively impacted new customer acquisition (i.e. the competitiveness of rail freight) before the completion of rail infrastructure investments and the acceleration of transport times. However, we await further information on these in connection with the earnings report.