Watchlist Update: Vow (VOW.OL)
Shareholder shift and VGM sale trigger strong rally – Q1 report shows stabilisation steps, but challenges remain
In our previous update, we highlighted a major shareholder shift in Vow: Kistefos had fully exited, while Must Invest had taken a more prominent position. That stake has since increased further – as of yesterday’s records, Must now owns 14.48% of Vow ASA.
The market has responded positively. From NOK 1.59, the share price surged to NOK 2.89 on Monday before closing at NOK 2.55 yesterday – a gain of more than 60% in just over a week. The sale of VGM and expectations for improved financial flexibility helped fuel this momentum ahead of this morning’s Q1 2025 report.
Q1 2025: Below expectations, but financial restructuring in motion
Sparebank 1 Markets describes the quarter as somewhat weaker than expected operationally:
Revenue came in at NOK 261m, up 12% YoY and ahead of expectations.
Gross margin was solid at 29.4%, in line with historical levels.
Adjusted EBITDA of NOK 13.2m missed forecasts due to elevated opex.
Net loss landed at NOK -30.5m, impacted by FX effects and interest costs.
Operating cash flow was NOK -71m, expected to improve in Q2 with the VGM cash inflow.
Backlog remains strong at NOK 1.53bn, with NOK 250m in options.
Covenant relief and loan extension announced today
Vow announced this morning that it has reached an agreement with DNB to extend the maturity of its loan facilities by one year (to Q3 2027). As part of the deal, the covenant structure has been adjusted to provide near-term headroom, just as leverage reached 6.4x (LTM NIBD/EBITDA) at quarter-end – now narrowly within the new 6.5x Q1 covenant.
New covenant thresholds:
6.5x (Q1–Q2 2025)
5.5x (Q3)
4.5x (Q4)
3.0x (Q1 2026 onwards)
Minimum equity ratio remains 20%, and a debt service coverage ratio of >1.00x will apply from Q4.
The VGM sale marks a key milestone that could ease pressure on liquidity and improve working capital dynamics from Q2 onward. With a reworked debt structure and new leadership in place, Vow is taking steps to reset the narrative. That said, operational volatility, elevated leverage, and execution risk remain important factors to watch – especially after the recent sharp revaluation.
🔎 We’ll revert with an earnings call summary later today, covering management’s commentary and outlook in more detail.
Disclaimer: This article is for informational and educational purposes only and does not constitute investment advice. Always conduct your own research or consult a financial advisor before making investment decisions. The author may hold positions in the mentioned securities.