Spinnova H2'24 flash comment: Suzano project timeline still unclear

Translation: Original published in Finnish on 2/13/2025 at 9:16 am EET.

Spinnova released its H2 report this morning. H2 was largely in line with our expectations in terms of figures, although the year-end net cash position was better than expected. Spinnova did not provide guidance for the current year as the outlook is dependent on the progress of the Suzano technology project and the company was unable to provide a new timeline (or any other significant additional information) for the project, which was delayed in November. This keeps the share's risk level still very high, although the scenario in our forecasts of Suzanne's project moving forward during H2 is realistic.  

Revenue and losses contracted in H2; cash position still good

Spinnova's revenue decreased by 78% to 0.4 MEUR in H1. The sharp drop in revenue was a foregone conclusion prior to the report, as Spinnova delivered the tail end of Woodspin's first factory project in the comparison period and there were no technology projects underway in H2. However, Spinnova's operating loss in H2 decreased slightly to 8.4 MEUR. The loss narrowed compared to the prior year period as the H2'23 technology project was close to break even. In addition, the loss was reduced by a reduction in headcount and stock option expense, as well as a reduction in Woodspin's net loss. Spinnova's H2 loss was roughly in line with our expectations.

However, cash flow was better than expected as investments, mainly related to the recapitalization of Woodspin, were below our forecast and the positive change in working capital also supported cash flow. Consequently, Spinnova’s net cash at the end of H2 was higher than our estimate at 41 MEUR. We continue to believe that the cash position is sufficient to cover the company's capital requirements under the current strategy in all scenarios, at least until the end of the decade, despite the delays revealed in H2 for the pulp-based technology.    

Report provides no material new information on the status of the Suzano project

In contrast to previous years, Spinnova did not provide guidance for the current year. Spinnova argued that the progress of the Suzano technology project will determine the company's near-term prospects, and we agree. The company has not yet received an updated schedule for the Suzano project, which was delayed in November. Spinnova and Suzano continue to validate Spinnova's technological efficiency metrics as quickly as possible, and Spinnova aims to provide guidance in the coming months. The status of technological developments related to the Suzano project was the most interesting aspect before the report and in this respect the report leaves a lukewarm taste, although there was no negative news that would change the forecasts. Thus, the company's H1 news flow is already under considerable pressure and the risk level of the stock will remain high until the milestones of the development work with Suzano become clearer. Respin's commercialization plan with ECCO is also underway and further details of this plan will be announced in Q1.