Translation: Original comment published in Finnish on 10/31/2023 at 6:58 am EET.

On Monday, NYAB announced that it has signed a major contract with Svenska kraftnät for the construction of the Aurora Line. The contract is for the second phase of the project, on a stretch of about 90 km between Dockasberg and Risudden in Sweden. NYAB will be able to offer its expertise in the entire energy sector for the project, from design to energy construction and civil engineering. Based on the target price agreed between the parties and other budgeted costs, the total value of the project is estimated to be around EUR 89 million. Work under the contract will start without delay and will be completed in December 2025.

The agreement is a continuation of the cooperation between the two companies, as NYAB started preparing for the construction with Svenska kraftnät in December 2022. The previous contracts between the parties concerned preparatory works, including critical supplies for the construction phase. As a whole, the agreement can be considered quite positive for NYAB, and we believe that its successful implementation will also enable the company to deepen the cooperation in the future. In addition, the construction of the Aurora Line will contribute to enabling the planned large-scale industrial investments in the Bothnian Arc area, which we believe NYAB is well placed to win to if they come to fruition.

Contract provides support for growth forecasts, no immediate impact on our view

Roughly annualized, the contract is significant for NYAB (revenue guidance 2023: 290-315 MEUR) and also very large compared to the company's average project size (especially in Sweden). Moreover, it significantly supports our forecast of continued strong growth in the coming years (revenue 2024e: 348 MEUR; 2025e: 411 MEUR), also taking into account the company's earlier comments on the postponement of investment decisions in the Swedish infrastructure and Finnish energy construction markets (especially wind power BoP) and the uncertainty surrounding the timing of their recovery. However, the agreement has no immediate impact on our view of the company. We will review our estimates at the latest in connection with the company's Q3 results to be published on November 10.