Eltel - Q3 landed a bit above the estimates
Eltel’s Q3 results were somewhat above our and consensus estimates. Demand is now strong and it helps to compensate for high inflation, however Q3 is a seasonally favorable quarter and there are still uncertainties related to improvement pace, including labor shortage issues.
- Eltel Q3 revenue grew by 7% y/y to EUR 207.0m vs the EUR 201.8m/201.3m Evli/consensus estimates. Growth was attributable to Norway, Sweden and Finland while Denmark remained flat. Eltel also signed agreements worth a combined EUR 406m during the quarter, including one of Eltel’s largest fiber contracts ever. Workforce shortages are an issue, however high demand also helps to increase prices in tender offers.
- EBIT landed at EUR 4.1m, compared to the EUR 3.2m/3.4m Evli/consensus estimates. Operative EBITA was EUR 4.1m, compared to our EUR 3.3m estimate. Profitability was burdened by increased costs and low utilization due to high sick-leave rates and employee turnover, while administrative costs were lower than in the comparative period.
- Finland’s profitability remained flat y/y and was helped by a solid performance in Communication. Swedish and Danish profitability levels also remained roughly flat, while margins in Norway declined due to a change in production mix.
- Eltel does not provide guidance for FY ’22.