Investment journal 16.8.2019: Apetit house keeping H119

Mixed feelings of the H1/19 report.

Frozen Food segment improved operative EBIT by 1 MEUR to 1 MEUR. H2/18 the comparable EBIT was 2,3 MEUR.

If H2/19 also improves by 1 MEUR then run rate frozen operative EBIT would be 4,3 MEUR or higher range of my estimate in the last Apetit journal.

So Frozen Food was good, and could get better, as the new production line will be ramped up.

Bad was that the oil business started to have problems with raw materials. They have to buy raw materials from Baltics so it costs little more.

The run rate EBIT estimate for it should be probably reduced to 1,5 MEUR or so, as opposed to the 2 MEUR estimated earlier.

Grain Trading will start a new crop year as the old inventories have been now sold, normalizing the NWC level as I expected.

In the first half, they had to sell the last inventories ahead of the new crop year at lower prices (world prices down), explaining the surprisingly big losses.

Management now expects business to normalize in the coming crop year.

Sucross fighted fighted to profit, which was surprise.

So, overall, Apetit’s operative future looks pretty good.

But the bad was the new findings I did of the background story of the CEO change.

Esko Eela, big shareholder, and his friends from Säkylä (home town of Apetit) put their “own man” to the CEO position for some reason (not happy with Apetits performance or something).

I don’t know what the strategy will be in the future as Esko Eela seems to be bit of old idiot with no financial savy (he, or someone else, seems to have suggested that Apetit would be close to banktcrupcy or something, rumor that Apetit had to bunk through press release).

So optimistic of Apetit’s future operative performance but less optimistic of the future governance.

The leaving CEO, Matti Vanhainen, put Apetit completely on new track, and I’m dissapointed to see him leave because of the idiots.

The stock went down 6 % or so from my purchase price but I thought the report confirmed my thesis that there is some upside.

I didn’t do anything to my position (not adding to losing position).

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