GRK Infra

GRK’s Q3 result was better than expected, largely due to the order book being executed faster than anticipated. We did not see the need for any significant changes to our estimates.

GRK published a stronger Q3 result than we expected, with both revenue and profitability developing more favorably than anticipated.

After a mildly positive estimate revisions, we raise our target price for GRK. We still consider the expected return, consisting of upside in the share valuation and the dividend, attractive.

GRK's raised guidance was not a surprise to us, and our estimates for the current year were above the old guidance ranges. The scale of the positive earnings revision was slightly stronger than our estimate, as our current year estimates are at the very bottom of the new guidance ranges for both revenue and adjusted EBIT.

GRK won a contract worth approximately 25 MEUR for the improvement of national road 21 in Enontekiö. This is a medium-sized project for the company and aligns with our expectations for GRK's ability to consistently secure new projects. While the order is positive news that strengthens the company's order book, it does not lead to any changes in our estimates.

From GRK's perspective, the key risks posed by the customer's somewhat surprising need for additional financing are, in our view, related to the project schedule at this time. Any potential delays to the schedule could affect the margins in the final phase of the project, which we believe has been running smoothly thus far. We do not believe that GRK faces credit loss risks related to Stegra, at least not on a significant scale.

On Friday, GRK announced that it had won the City of Helsinki's tender for the renovation of Mäkelänkatu. The project, which is worth approximately 24.8 MEUR, will be carried out in 2025–2027. The company also won a 16.8 MEUR bridge contract in Sweden last week. These projects are medium-sized by GRK standards and will strengthen the company's order book. The order aligns with our expectations for the company's ability to consistently secure new projects. Therefore, these projects will not cause any direct changes to our estimates.