Translation: Original published in Finnish on 07/03/2026 at 06:30 am EEST

On Thursday, Nurminen Logistics issued a profit warning based on Russia’s decision to significantly increase tariffs for rail transport to Finland. This did not come as a surprise to us, as we commented earlier on Thursday that Russia's actions would clearly increase forecast risks. We will update our estimates in the coming days, and our preliminary assessment suggests significant downward pressure on our earnings estimates.

The new guidance is below our estimates

The company now expects 2026 revenue to reach or be slightly below the comparison period (2025) level. The company estimates its comparable EBIT to be clearly below the 2025 comparison period level, but to remain at a good profitability level. Prior to the profit warning, we expected revenue this year to grow by 0.5% to 110 MEUR and adjusted EBIT to be 16.4 MEUR (adjusted EBIT-% 14.9%). Thus, our revenue estimate is roughly in line with or slightly above the new guidance, but our preliminary assessment suggests significant downward pressure on our earnings estimates. We will lower our estimates to reflect the new guidance and the expected decrease in volumes from Russia's eastern traffic.

Russian tariff increases hit North Rail

Nurminen estimates that Russia's decision in early July will have a negative impact of around 4–5 MEUR on 2026 revenue. This significantly weakens the full-year earnings of North Rail and thus the entire Group. As we estimated earlier on Thursday, Russia's actions will cut eastern freight flows and the company's high-margin business. The company has already initiated efficiency measures of around 1.5 MEUR to secure profitability and stated that it is evaluating the need for additional measures on a fast schedule. Despite tariff increases, Nurminen estimates that the domestic railway business will continue to operate at a good margin level, as its demand, utilization rates, and operational efficiency have remained strong. The company estimates that the decisions will not have a material impact on anything other than fertilizer transports. We believe the company's guidance, which points to somewhat stable revenue, also relies on this.

Focus increasingly turns to Central Europe

Despite headwinds in Eastern traffic, Nurminen continues to invest in Central European routes, which are at the core of the company's strategy. According to the company, the utilization rates of the block train service between Italy and Sweden have rapidly risen to a high level, and the company aims to double capacity at the turn of Q3 and Q4. In addition, a new link between Sweden and Spain is due to be opened in January 2027. We believe the success of Central European growth is now even more critical for the company's earnings growth, as North Rail's historically very high profitability and volumes face pressure. This growth would also be valuable from the shareholders' perspective, as we estimate that the risk level of the European business (especially geopolitical risks) is significantly lower than that of the Russian business, which would also support the share's valuation multiples due to a lower required return.