Financials and outlook
This section includes information on our key financial indicators, future outlook, short-term risks and uncertainties, and accounting principles.
FINANCIALS
OUTLOOK
Outlook for 2024 (published on April 18, 2024): In 2024 our revenue is expected to be in the range of 185 – 210 MEUR and the Operating Profit (EBIT) is expected to be in the range of 2 – 4 MEUR.
The lower than 2023 EBIT is due to a significant one-time write-down (approx. 6 million euros) of a single renewable project in Q1. The project was technically successful but exceeded the cost budget considerably. Corrective actions have been taken and Suvic expects the remainder of the 2024 to clearly exceed the comparison period of 2023 in both revenue and EBIT.
Dovre’s Project personnel and Consulting business areas are expected to decline in both revenue and EBIT compared to 2023 due to the completion of a major project in Canada and somewhat slower activity in the Norwegian public sector.
Change in outlook procedure: Publishing the outlook, no later than in April will be a permanent change in Dovre Group’s procedure.
Previous guidance for 2023 (published on June 26, 2023): Dovre Group’s net sales in 2023 are expected to be in the range of 185 to 195 million euros and the operating profit (EBIT) is expected to be above 7 million euros.
For clarification, Dovre’s net sales in 2023 were 196.7 (203.0) million euros and operating profit was 7.4 (8.5) million euros.
(Updated April 18, 2024)
SHORT-TERM RISKS AND UNCERTAINTIES
In the Project Personnel business area, the Group’s most significant risks include the cyclicality of its clients’ business. Market developments in Norway are particularly important for Project Personnel due to the business area’s strong position in the Norwegian market. The new legislation related to temporary hire that came into effect in the second quarter of 2023 in Norway has had negative effects on Dovre’s business since some clients opted to hire in-house staff rather than engage external consultants. Moreover, expanding operations into new customer segments requires investments and exposes the business to risks. Other challenges for the business group include maintaining competitiveness and profitability. The project-based nature of the business group creates uncertainty in predicting its operations. There may be occasional dependence on a single large project or client at the local level. While Dovre Group is responsible for the performance of its consultants, it does not have overall responsibility for project deliveries.
In the Consulting business area, general economic uncertainty does not have as direct an impact on the demand for the Group’s services. This is mainly due to the fact that one of the Group’s main clients, the Norwegian public sector, aims to invest counter-cyclically. Project delivery involves minor risks due to both clients and the Group’s personnel, such as project delays or the loss of key personnel. The new law for temporary hires, as mentioned above, will also have an impact on some of Consulting Norway clients.
In the Renewable Energy business area, Suvic’s normal operations involve various contractual risks depending on the scope of work. These risks are mainly mitigated through tight project controls, insurances and guarantees.
Dovre Group holds a minority share in SaraRasa Bioindo Pte. Ltd. (Bioindo), a company that produces pellets from wood residue. Bioindo’s production unit is in Indonesia and is thus exposed to high country risk. Other significant risks include risks relating to commercial agreements, especially feedstock purchase and end-product sale agreements.
The Group’s reporting currency is the euro. The Group’s most important functional currencies are the Norwegian crown, the Canadian dollar, the Singaporean dollar, and the US dollar. Although the Group’s sales and corresponding expenses are mainly in the same currency, currency fluctuations can affect the Group’s net sales and operating result. Foreign currency denominated assets and liabilities can also result in foreign exchange gains or losses.
In addition to the above, the current geopolitical situation, high inflation, and high energy prices are also adding risk to our business.
(Updated March 8, 2024)
ACCOUNTING PRINCIPLES
Dovre Group Plc reports on its financial performance in accordance with the International Reporting Standards (IFRS). The accounting principles are presented under the Group Financial Statements in the Annual Report.