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Stabilus SE Reports Weak Profit Despite Revenue Growth

Stabilus SE announces weak profit in Q2 while revenue grew 7.8%. The forecast for fiscal 2025 remains intact, raising questions about margin pressures. Investors should assess the implications of declining profits amidst solid revenue gains.

Date: 
AI Rating:   5

Weak Profit Amid Revenue Growth
Stabilus SE has reported a decrease in profit for its second quarter, which is a significant concern for professional investors. The reported profit of 11.2 million euros, down from 18.1 million euros last year, raises red flags regarding the company’s ability to maintain profitability despite revenue growth.

Furthermore, the adjusted operating profit, or EBIT, also fell 3.1% to 37.7 million euros, which indicates a decline in operational efficiency. The adjusted EBIT margin also decreased from 12.4% to 11.2%. This contraction in margins can suggest challenges in cost management or increased competitive pressures, which could affect investor sentiment.

While revenue saw a 7.8% increase to 338 million euros, largely attributed to the consolidation of Destaco and strong performance in the Americas and EMEA regions, the APAC region saw a revenue decline of 0.7%. This mixed performance in different regions could indicate vulnerabilities in certain markets, which is relevant for future growth prospects.

In terms of outlook, Stabilus has reiterated its fiscal 2025 revenue forecast at between 1.3 billion euros and 1.45 billion euros, with expected adjusted EBIT margins in the range of 11% to 13%. Despite these targets remaining unchanged, the anticipated catch-up effects in the latter half of the fiscal year will need to be closely monitored for any discrepancies.

The expected adjusted free cash flow (FCF) range of 90 million to 140 million euros is a positive signal. It suggests that the company might maintain sufficient cash generation capability, despite the profit setbacks. Investors should monitor how well the company executes its plans for production localization and product introduction, as these factors are critical for sustaining future revenue growth.

Stocks:  SIUAF