This article first appeared on GuruFocus .
Release Date: November 02, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
-
Aspo PLC ( STU:ZYD ) improved safety performance with no serious accidents in 2026, and accident count decreased compared to last year.
-
Aspo PLC ( STU:ZYD ) strengthened its financial position: free cash flow of EUR 33 million, leverage ratio down to 3.2 from 3.9, and return on equity at 16.8%.
-
Telco segment delivered strong performance with EBITDA of EUR 6.5 million, up nearly EUR 2 million, driven by sales growth, margin improvement, and successful profitability actions.
-
Aspo PLC ( STU:ZYD ) made strategic progress with the Stegra contract for raw materials and finished steel products, and the green coaster fleet is performing well.
-
The planned demerger is on track, with all financing agreements signed and lender consent received; the demerger is expected to create two focused standalone companies with tailored financing and better growth opportunities.
Negative Points
-
ESL Shipping's profitability was weak in Q3, with EBITDA of EUR 2.5 million, down EUR 1 million year-over-year, due to low demand and poor capacity utilization.
-
The handy-sized vessel segment underperformed, with low demand and poor spot market pricing, leading to idle time and weak profitability.
-
Aspo PLC ( STU:ZYD ) faced a polarized performance, with ESL Shipping's decline offsetting Telco's strong results, highlighting dependency on cyclical shipping markets.
-
The pulp and paper industry remained very weak for both ESL Shipping and Telco, with low demand expected to persist.
-
M&A activity has been slow, with no acquisitions completed recently, and the return on invested capital from past acquisitions has not yet reached the 20% target.
Q & A Highlights
-
Warning! GuruFocus has detected 5 Warning Signs with STU:ZYD.
-
Is STU:ZYD fairly valued? Test your thesis with our free DCF calculator.
Q: What is the underlying reason for the recent weakness in the ESL Shipping segment, and which customer segments are driving it? A: CEO (Unidentified_1) explained that the coaster business is performing well, particularly in project cargo, but the handy size business is struggling. The weakness is concentrated in customer industries other than steel, which was the only strong segment in Q3. Pulp and paper remains notably weak, and production stoppages and high oil prices also weighed on volumes.
Q: What is the split between contract and spot sales in ESL Shipping, and how does it affect pricing? A: The CEO stated the mix remains close to the historical average of 80% contract and 20% spot. However, when contract volumes dip, more vessel capacity shifts into the spot market. Combined with weak spot demand, this creates a capacity surplus that destroys spot price levels.
Q: With a large number of new vessels arriving soon, will all of them be deployed on the Stegra project, or is there unsold capacity? A: The CEO cautioned against drawing fundamental conclusions from one quarter. He reiterated the long-term view that market demand will grow roughly 50% over the next couple of years while capacity declines. New demand is expected to come from a broad base, including other steel industry players and forest industry investments, not just Stegra.
Q: How much of the Q3 Telco growth came from the inventory benefit seen earlier in the year? A: The CEO estimated the Q3 benefit from selling cheap inventory at higher market prices was about EUR 0.5 million. For the first quarter combined, the additional benefit was EUR 2.53 million to EBITDA. Even excluding this, Telco shows a solid underlying profit improvement trend this year.
Q: What is the expected run rate for group overhead costs, and will Telco carry these costs going forward? A: The CEO declined to guide for 2027 but noted group-level costs have fallen from about EUR 5 million to EUR 3.8 million on a 12-month rolling basis. These costs will partly weigh on Telco's short-term profitability, but overlapping structures are being removed and no serious problem is foreseen.
Q: Does Telco's long-term financial guidance include group overhead costs? A: Yes, the CEO confirmed the guidance of EUR 500 million in net sales and 8% EBIT margin includes group-level costs. He added that Telco already exceeded 8% in the first three quarters of this year, putting it on a good track.
Q: What does the accelerated planning of Telco's inorganic growth mean in practice, and what is the ideal M&A target? A: The CEO said Telco is adding sales people and OpEx to capture positive market share trends. On M&A, activity paused over the past two years but the company remains bullish. The ideal target has roughly EUR 20 million in revenue, profitability in line with Telco, and is located in the Nordics or neighboring markets such as Poland. Opportunities exist, but sellers' willingness varies.
Q: Will the demerger add significant costs for ESL, and how will total group costs evolve? A: The CEO noted ESL has recruited capabilities such as communications and financing, with some additional costs in forming the final setup. However, from the Aspo group level, costs will be reduced. Everything remaining at Aspo level will be integrated into Telco, with opportunities to remove overlapping structures, resulting in a fairly efficient platform.
Q: Cash from the Leipurin sale appears to be funding ESL investments despite group cash of only EUR 26 million at end-Q3. Does this contradict the message that the sale gives Telco room for M&A? A: The CEO clarified that close to EUR 60 million from the Leipurin sale is earmarked for Telco. The EUR 10 million equity injection into ESL, of which EUR 7.9 million came from Aspo, was simply balance sheet optimization between the two companies before the demerger. He called it an undramatic change and the last such action possible prior to the merger.
Q: Why was the EUR 10 million equity injection into ESL necessary? A: The CEO said it was not necessary but aimed at optimizing both balance sheets. Telco Group now has leverage of 1.8, while ESL's leverage is approximately 3 when including extra net debt related to upcoming vessels. This creates a balanced situation ahead of the demerger.
Q: Why did ESL increase time-chartered vessel capacity during a period of low demand? A: The CEO explained it is a question of vessel type rather than volume. ESL has three-year contracts for newer, very competitive vessels it wants to introduce, while shorter-term time charters can be cut toward year-end. The setup is chosen to be the most competitive for ESL Shipping.
Q: Where does Telco see volume growth opportunities over the next 12 months, given mixed signals in customer industries? A: The CEO identified defense (specific polymers), data centers (cooling system chemicals), mining, and the medical industry as growth areas. Request-for-offer activity is trending positively across a broad base. Paper and pulp remains the weakest customer industry for Telco.
Q: What has been the return on invested capital of Telco's acquisitions? A: The CEO said Telco has made seven acquisitions over the past couple of years. Against a 20% return on equity target, not all have reached it, but on average they are fairly close.
Q: If both businesses are strategically strong, why do returns on capital and cash flow not yet reflect the growth ambitions? A: The CEO pointed to a return on equity of 16% for the past nine months, which is developing positively. Remaining work includes greater focus, executing profitability improvements, removing overlapping structures, investing in Telco's organic growth, and leveraging ESL's new fleet.
Q: What is the financial benefit for shareholders of splitting Aspo into two separately listed companies? A: The CEO said value creation will be proven over time, but two standalone companies should perform better than a conglomerate. Benefits include removing overlapping structures,
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
