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Kreate Group operates in the infrastructure sector. The company offers a wide range of services in the development of demanding industrial projects. Examples of services include bridge repair and construction, track construction for trains and rails, and mass excavation and crushing of rock for new motorway extensions. The largest operations are conducted around the Nordic market.
Kreate's share has risen by ~170% since our recommendation change at the beginning of the year, and following the recent share price increase, the expected return based on our current estimates falls below our required return.
Kreate’s Q3 was strong, with revenue over-doubled compared to the same period last year. Growth was driven primarily by rock construction, private-sector groundworks, and the consolidation of KFS Finland. Kreate CEO Timo Vikström discusses the results in an interview with analyst Atte Jortikka.
We estimate that data center construction is partly filling the gap left in the construction market by the decline in residential construction in recent years.
Kreate's Q2 results picked up where the strong Q1 left off, and the company's profitability potential also began to emerge from beneath the strong top-line growth.
We forecast revenue to more than double in Q2 to 155 MEUR, supported by the consolidation of KFS, the acquisition of SRV Infra, and a strong order backlog.
