Baltic: Weekly Results Summary (Feb 21)
The OMX Baltic index rose by +2.55% this week, driven by strong results from industrial companies. The earnings season highlights a clear divide: while the industrial and transport sectors are showing increased efficiency and a recovery in profitability, consumer-facing businesses are suffering from weak demand.
What happened: Tallink delivered a powerful result, increasing its Q4 net profit by 333% (to €12.2 million). Operating profit soared by an incredible 1211%.
Why: The main driver was an accounting change in the valuation of vessel lifespans, which reduced costs. At the same time, operating expenses also decreased by 6.2%, demonstrating good cost control despite a drop in ticket revenue.
Market reaction: The stock reacted positively to the news, rising 5.0% for the week.
What happened: The company made an impressive turnaround, earning an operating profit of €1.8 million compared to a loss last year. Revenue grew by nearly 59% year-over-year.
Why: The success was driven by explosive demand for electrical equipment, especially in the Norwegian market where sales tripled. The management board also proposed a dividend of €0.25.
Market reaction: The strong results pushed the stock to a 52-week high, with a weekly gain of 4.4%.
What happened: The media group's operating profit fell by 3.3%, and the quarter ended with a loss of €0.9 million.
Why: The cooling Baltic economy has reduced advertising revenues (-13.4%). Although new conference businesses increased turnover, this could not compensate for the weakness in the core business and rising costs.
Market reaction: Despite the disappointing figures, the stock price remained unchanged for the week.
What happened: The agricultural group's results were disappointing: operating profit plummeted by 73.5% year-over-year, and the company fell into a loss.
Why: Profitability was hit by increased operating costs (+18%) and problems in the fertilizer business line. The farmer partnership segment generated a significant loss.
Market reaction: The stock fell on the results and ended the week down 2.7%.
Conclusion
This week's results confirm that the economic recovery is uneven. Exporting companies and those optimizing costs are performing strongly, while sectors dependent on domestic consumption remain under pressure. This highlights the need for selectivity. Follow RYTM for further analysis.
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