Original-Research: Ernst Russ AG (von Quirin Privatbank Kapitalmarktgeschäft): Buy

Classification of Quirin Privatbank Kapitalmarktgeschäft to Ernst Russ AG

Company Name:	Ernst Russ AG
ISIN:	DE000A161077
Reason for the research:	Update
Recommendation:	Buy
from:	03.09.2025
Last rating change:
Analyst:	Klaus Soer

Solid H1 Result - Strong Charter Rates

Despite ongoing geopolitical disruptions and a softer macro backdrop, Ernst Russ delivered solid H1 2025 results. Rerouting around the Suez/Red Sea corridor due to the middle east conflicts still extends voyage distances and holds charter rates elevated. For H1 2025, revenue was EUR 79.8m (-8.9% yoy), mainly caused by the reduced ship fleet (current fleet 26 ships). Ernst Russ reported EBIT of EUR 55.6m (+19% yoy.). Given a non-operating result of EUR -9.8m (including non cash FX valuation losses) we calculate an QPB EBIT of EUR 45.8m (+22% yoy). Besides the operating contribution, EBIT was largely influenced by disposal gains of EUR 32.3m (MS Wasl EUR 27.1m; MS Andante 5.2m). Hence, adjusted EBIT (ex-disposals) was EUR 13.5m. The current average remaining charter duration stands at 18.6 months and the current average charter rate as of stands at USD 18,749 per day. Technical availability of the fleet remains high at 99.9%. The balance sheet further strengthened with an equity ratio of 80% (FY24: 75%). ER’s net cash position stands largely unchanged at EUR 111.7m (FY24: EUR 107m). Investments of around EUR 15m included the buyout of minorities within the current fleet according to the new strategic approach to increase transparency and focus on capital market attractiveness. We have adjusted our full FY25e EBIT estimates slightly down to EUR 75m. This anticipates the currency changes of H1/25 as well as upcoming non-recurring income of positive disposal proceeds of around EUR 8.5m (Solong). Our medium-term estimates remain unchanged and are based on the current ship fleet. Based on our DCF valuation and peer group analysis we reiterate our BUY recommendation with a TP of EUR 10.00.
 

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