NRC Group (Hold, TP: NOK18.00) - Two steps forward, one step back
Q1s are low season for NRC’s EBITDA margin, and thus the upcoming Q1 report due at 07:00 CET on 12 May is unlikely to provide any indication about an EBITDA margin recovery. Thus, order bookings are our focus point. NRC announced only NOK386m of Q1 orders, but Q2 started strongly with a EUR42m order. However, NRC is also at risk of a EURc20m order cancellation relating to court decisions on ‘maintenance area 5’. NRC needs to restore EBIT margins to win back investor confidence for 2022e–23e; Q1 is unlikely to provide this. We reiterate our HOLD but have raised our target price to NOK18 (16).NRC Group collects, processes and sells map data. Co. provides services to the Norwegian market, but focuses mainly on projects abroad. Co.'s geo server, BlomURBEX®, enables online distribution of Co.'s products and databases to its customers. The content of BlomURBEX® consists of Co.'s oblique aerial images, TerraItaly® database and 3D city models. Co.'s operations are divided into two main business areas: Blom Geo Engineering Services, which collects and produces geographic information; and Blom Information Services, which provides geographic information as standardized services or through applications adapted to various uses and platforms.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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