Nurminen Logistics Q4'25: Cash flow provides a backbone for internationalization

Translation: Original published in Finnish on 02/27/2026 at 08:15 am EET

Source: Inderes

Nurminen Logistics' Q4 figures were operationally slightly below our expectations. The company only issued guidance for H1'26, estimating that its performance would fall short of the comparison period in terms of both revenue and earnings. However, the company was more positive about its full-year market outlook. Based on the report, we lowered our estimates, especially for this year, but we still expect the company to achieve clear earnings growth from H2 onwards. We find the share's earnings-based valuation currently neutral, but the high cash flow yield keeps the risk-adjusted expected return attractive. Thus, we reiterate our Accumulate recommendation and lower our target price to EUR 1.0 (was EUR 1.1) in line with the estimate revisions.

Q4 result slightly below our expectations, cash flow is strong

Nurminen's Q4 revenue grew by 10%, supported by inorganic growth from the Essinge Rail acquisition, but was slightly below our expectations. The adjusted EBITA was 3.7 MEUR, which was slightly below our estimate, reflecting the revenue development Reported earnings were weighed down by 2.2 MEUR in non-recurring items, the most significant of which was the write-down of development costs for the railway service between Northern Finland and Gothenburg, as the company decided to cease operating the connection. The company's Board proposes a capital repayment of a maximum of EUR 0.03 per share, which was one cent below our expectations. The most positive aspect of the report was the continued strong cash flow development. Based on our calculations, the company generated 10.3 MEUR in free cash flow in 2025 (incl. payments of Essinge aqcuisition debts and lease liabilities). We note that part of this, however, belongs to the minorities of the Baltic and North Rail businesses.

This year's estimates under pressure

Nurminen only guided H1’26 in the report and expects revenue (H1’25: 60.3 MEUR) and adjusted EBIT (H1’25: 10.8 MEUR) to fall below the comparison period. This is due to uncertainty regarding the timing of the Baltic business recovery. The company estimates that investments made in the growth of its Central European business will only start to show results from Q2 onwards. In its outlook, Nurminen estimated that relevant market development will strengthen during the year, driven particularly by new routes and customers in Central Europe. In our view, narrowing the company's guidance horizon is justified due to the volatile situation in the Baltics, which has fluctuated multiple times, and the early development stage of the new block train connection between Italy and Sweden. Reflecting the actual development and the company's comments, we cut our revenue estimate for this year by 10%, which was also reflected in the bottom line. Within the year, we expect Q1 to fall significantly short of the comparison period due to high comparison figures, while for Q2, we expect performance to be roughly in line with the comparison period. For H2, we estimate clear growth in revenue and earnings, supported by the comparison figures. Reflecting the overall picture, we estimate the company's revenue (2026e: 107 MEUR) and EBIT (2026e: 17.1 MEUR) will decrease slightly on an annual basis. In the coming years, we expect a stable performance.

DCF-based valuation is attractive

With our updated estimates, the P/E ratios for Nurminen, adjusted for PPA amortizations, are approximately 9x and 8x for 2025 and 2026. Relative to our accepted multiple range (P/E 9x-12x), the earnings-based valuation is at a neutral level, although we estimate that the acceptable valuation currently leans towards the lower end of the range. However, we expect that the company's free cash flow will be stronger than its earnings due to the high and long depreciation periods of North Rail's locomotives. Thus, we see the cash flow yield, despite the minority interests, as quite attractive (cf 2025 free cash flow yield, excluding acquisition debt payments, of around 22% at current market value and around 14% at our estimated enterprise value considering minorities). Our view of a favorable cash flow profile is also supported by our conservative DCF calculation, which indicates a share value of around EUR 1.1, reflecting the current earnings level.