Eltel: Q1 seasonally small, margin lift ahead - ABG

Q1 a seasonally small quarter, adj. EBITA of EUR -4m
Margin lift from Q2e following recent divestment
Share trading at 11-8x '24e-'25e EV/EBITA


Q1 a seasonally small quarter, better margins ahead

Q1 is a seasonally small quarter for Eltel due to adverse weather making installations difficult. However, this year saw more challenging conditions than usual, which resulted in net sales of EUR 176m (-11% vs. ABGSCe 198m), with organic growth of -5.9%, and adj. EBITA of EUR -4m (ABGSCe -1m). Looking at Q2 and beyond, we should see the the normal seasonal margin expansion and a structural margin gain tied to the divestment of the unprofitable Polish High Voltage business. Also, the company said that the two problematic frame agreements in Finland have now stabilised, but it has lowered its volume forecasts for the Finnish Power business because of lower customer investments.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/eltel/Equity-research/2024/4/eltel---q1-seasonally-small-margin-lift-ahead/