Eltel: Earnings miss estimates - Evli

Eltel’s Q3 results were burdened by lower top line, continued challenges in the Polish High Voltage business and cost inflation. Operative EBITA declined y/y while our and consensus estimates expected improvement. Eltel retains its FY ‘21 guidance and expects operative EBITA margin to improve y/y.

Eltel Q3 revenue declined by 14% y/y and was EUR 193.8m, compared to the EUR 223.9m/214.0m Evli/consensus estimates. Finland amounted to EUR 77.9m vs our EUR 86.3m estimate. Softness in volumes, relative to estimates, was seen across the board.

EBITDA came in at EUR 11.9m vs the EUR 17.6m/16.5m Evli/consensus estimates. Operative EBITA was EUR 4.1m, compared to our EUR 9.2m estimate, meaning operative EBITA margin was 2.1% vs our 4.1% estimate. EBIT was EUR 4.0m vs the EUR 9.0m/8.3m Evli/consensus estimates.

Finnish profitability remained at a strong level and increased y/y from EUR 4.3m operative EBITA to EUR 4.8m (6.2% margin). The loss in Sweden also declined from EUR -0.8m to EUR -0.2m. Meanwhile operative EBITA levels in both Norway and Denmark declined by around EUR 1m as the areas had challenges with volumes. Losses in other businesses grew by more than EUR 1m y/y. Group function costs also increased by EUR 0.4m y/y.

The Polish operation has cost Eltel EUR 7.6m in operative EBITA this year and Eltel re-evaluates strategic options for the business.

Eltel guides FY ’21 operative EBITA margin to improve y/y (unchanged).

Länk till analysen i sin helhet: https://pankki.evli.com/hubfs/ERP/Raportit/Eltel/Eltel%20211103%20Earnings%20flash.pdf