Business segments

Railcare provides railroad services; Enterprise (40%) includes railroad maintenance and projects, Transport (57%) and machine services. The Enterprise services includes business in the UK.

UK enterprise business is not profitable and requires a change of strategy.

Market growth

Railcare benefits from several long-term trends, including environmental friendly transport, establishment of new business in northern Sweden and Sweden's NATO membership.

The Swedish government's budgets for railroad maintenance are increased by 25% until 2033 (compared to the previous 10 year plan).

Since Apil'23 EU C02 emission rights policy includes transport, which benefits rail transport.

Electric locomotive

Railcare developed an electrical locomotive with battery systems. This Multi Purpose Vehicle is firstly developed for Railcare's own use.

Locomotives in general are old and dirty machines with high maintenance costs that sooner or later must be replaced with environmental friendly alternatives. This could trigger a change in the sales of electrical locomotives. External sales of MPV's would be a true catalyst, but with a low probability.

German studies indicate that hybrid and battery locomotives are significant cheaper, upto 80%, than hydrogen driven. My expectation is that hydrogen is the preferred technology in heavy transport given the high energy density (lower weight).

Results Q2'24

The latest quarter results show that Railcare's business is developing opposite to its 2027 financial targets. The margins declined in all business segments. Furthermore the company has an issue with its foreign business.

Financial goals

With the 2023 report the board announced new financial goals for 2027 to reach 1.000Mkr revenue with 13% operating margin. This indicates that earnings per share can increase from 1.80kr to 3.50kr. The share price can move above 40kr (12x PE) when this target is reached.

Low liquidity

Liquidity is very low and sometimes below 10k/day. On the other hand this can also offer swing trading opportunities.

UK business

The losses in the UK business are a risk for the growth plans. It draws (financial) resources that are better used elsewhere to realize the growth strategy.