Original-Research: Havila Kystruten AS (von Montega AG): Kaufen

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Original-Research: Havila Kystruten AS - from Montega AG

Classification of Montega AG to Havila Kystruten AS

Company Name: Havila Kystruten AS

ISIN: NO0011045429

Reason for the research: Update

Recommendation: Kaufen

from: 03.06.2024

Target price: 2,80 NOK

Target price on sight of: 12 Monaten

Last rating change: -

Analyst: Tim Kruse (CFA)

Havila Q1: good but not great (yet)

Havila Kystruten AS reported the figures for Q1 2024 last Thursday in

conjunction with its annual shareholder meeting. The company also held its

first quarterly earnings call, which as a further step in the managements

intention to increase capital market activities. Even if we had expected

Havila to break even on EBITDA level in Q1 we would not overrate this

quarter, as all relevant KPIs are moving in the right direction and there

were also some one-offs in Q1.

Overall sales in the first quarter amounted to 292.9 m NOK which fell short

of our expectation (312.2 m NOK) due to two reasons. Firstly, the

contractual revenue (Actual: 96.9 m NOK vs. MONe 102.7 m NOK) from the

government was lowered by 5.7 m NOK due to an accounting effect. The

contract with the Ministry of Transport includes an option to extend the

contract by one year after 2030. The option rate differs from the rate in

the fixed period so that this revenue loss is spread over the entire

contract period. We had not yet reflected this non-cash effect in our

estimates and have changed them accordingly. Secondly, the average cabin

rate (ACR) of 3.900 NOK came in slightly below expectation albeit having

increased considerably against the previous and last years Quarter (3.100

and 3.000 NOK respectively). The company sees good potential to increase

ACR, as realized prices are still influenced by ticket sales from the

previous years, where the company had to deal with several cancellations

and current trips sold are showing significantly better prices.

EBITDA came in at -17.5 m NOK which was below our expectation (+29 m NOK).

Apart from the above mentioned effects LNG cost as well as material

expenses where higher than expected, which we are reflecting in our lowered

full year expectations. Also personnel cost were inflated due training

expenses in the light of the ramp-up of operations. Havila will be facing

its first high season with full operations of all four ships this year.

Therefore the company is busy digesting the sacle-up in operations at the

moment but will increase attention to streamlining operations and occupancy

across the route. An indication of these efforts is the launch of the 'Pure

Northern Collection'. This specially curated package, which includes a

morning flight from Oslo as well as a variety of hand-picked excursions in

the Arctic wonderland of Kirkenes, should increase the occupancy of the

usually less populated southern route. We therefore remain confident that

margins will improve considerably from here on out albeit having lowered

our estimates to account for Q1 cost levels.

Industry parameters promising: In the past months the cruise line industry

has shown a strong booking development leading to record Q1 numbers and an

increased outlook for all of the the top three cruise line operators

(Carnival, Norwegian, Royal Caribbean). Although the direct overlap with

the coastal express should be limited it does reflect the overall demand

and appetite for cruise holidays which should also support the Coastal

Express and Havila.

Conclusion: Even if Havila did not quite achieve our expectation in Q1 we

are satisfied with the overall development. We believe this investment case

will unfold over several quarters and are certain their moat will widen as

time goes by. With significantly positive FCF and the new revolving credit

facility of 200 m NOK we see Havila well financed and have lowered our beta

to reflect the refinancing of the tranch a bond. We therefore reiterate

price target and recommendation.

+++ Diese Meldung ist keine Anlageberatung oder Aufforderung zum Abschluss

bestimmter Börsengeschäfte. Bitte lesen Sie unseren RISIKOHINWEIS /

HAFTUNGSAUSSCHLUSS unter http://www.montega.de +++

Über Montega:

Die Montega AG ist eines der führenden bankenunabhängigen Researchhäuser

mit klarem Fokus auf den deutschen Mittelstand. Das Coverage-Universum

umfasst Titel aus dem MDAX, TecDAX, SDAX sowie ausgewählte Nebenwerte und

wird durch erfolgreiches Stock-Picking stetig erweitert. Montega versteht

sich als ausgelagerter Researchanbieter für institutionelle Investoren und

fokussiert sich auf die Erstellung von Research-Publikationen sowie die

Veranstaltung von Roadshows, Fieldtrips und Konferenzen. Zu den Kunden

zählen langfristig orientierte Value-Investoren, Vermögensverwalter und

Family Offices primär aus Deutschland, der Schweiz und Luxemburg. Die

Analysten von Montega zeichnen sich dabei durch exzellente Kontakte zum

Top-Management, profunde Marktkenntnisse und langjährige Erfahrung in der

Analyse von deutschen Small- und MidCap-Unternehmen aus.

You can download the research here:

http://www.more-ir.de/d/29947.pdf

Contact for questions

Montega AG - Equity Research

Tel.: +49 (0)40 41111 37-80

Web: www.montega.de

E-Mail: research@montega.de

LinkedIn: https://www.linkedin.com/company/montega-ag

-------------------transmitted by EQS Group AG.-------------------

The issuer is solely responsible for the content of this research.

The result of this research does not constitute investment advice

or an invitation to conclude certain stock exchange transactions.

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