Q4/24 profits were significantly above estimates leading to another solid year. We forecast stable profits partly supported by stable energy prices and regular emission rights gains. We reiterate our Base case Fair value and dividend forecast. A resolution of the legal case could be a share price trigger.

The Q2/24 sales and earnings beat our estimates. We see 2024 profits normalize at a much higher level than before the record 2023. The Polish acquisition already adds to sales and profits and increases the addressable market. We raise our estimates and Base case Fair value.

Record profits made the Grigeo (GRG) share the second best Baltic Main List performer in 2023. A substantial Net cash position and positive Cash flows support dividends. A positive resolution of the legal case could result in further gains.

Q2 Sales was below estimates while profits were significantly above. We lower our Sales estimates but raise our profit estimates. The Tissue segment is the main profitability driver, but the other segments also contribute. We raise our Fair value.

Q4 sales and profits were above expectations. Lower energy prices mean profitability is recovering to healthy levels. We raise our sales and earnings estimates as well as our Fair value. A resolution to the ongoing environmental case could trigger a substantial share price appreciation.

Q2 was above expectations after Ukraine was restarted and successful price increases. Q3 electricity prices hit a record-high and we adjust our estimates accordingly. A new court date for the environmental legal case has been set.

While the environmental court case and the Russia – Ukraine war pressures the share price, Grigeo’s operating performance shows resilience. The court hearings are scheduled to start in September. We raise our sales estimates based on expected price increases to clients.

The Grigeo group subsidiary, Grigeo Klaipeda, environmental pre-trial investigation has resulted in a worst case scenario valuation. The Grigeo Klaipeda profit decline has been offset by the other segments. We see a potential revaluation as we get more visibility on the size of the damage compensation but recognize it could take years before this happens.

The Grigeo share closed last week down 29% following news that Grigeo Klaipeda has released sewage into the seawater. It is impossible to determine the financial impact without more facts and hence we put our estimates “Under review” to be updated later.