Eltel (ELTEL) Q2 2025 earnings summary

Executive summary

• Eighth consecutive quarter of improved profitability, with all segments contributing and Sweden showing strong growth.

• Net sales declined 6.9% year-over-year to EUR 201.0 million, but gross profit and adjusted EBITA improved.

• Major refinancing completed, including a EUR 130 million senior bond and EUR 60 million revolving credit facility.

• New business now accounts for 10% of net sales, with strong growth in public sector, renewable energy, and data center contracts.

• Leadership changes in Sweden and Denmark & Germany announced.

Financial highlights

• Gross profit increased to EUR 22.5 million from EUR 21.7 million year-over-year.

• Adjusted EBITDA for Q2 was EUR 10.3 million, up from EUR 8.4 million; adjusted EBITA improved to EUR 2.5 million from EUR 0.5 million.

• Net debt rose to EUR 144.6 million, mainly due to refinancing and hybrid bond reclassification.

• Leverage ratio improved to 2.8x (from 3.5x), and would be 2.4x on a comparable basis.

• Cash flow from operating activities for H1 2025 was EUR 9.7 million, compared to EUR -7.1 million in H1 2024.

Outlook and guidance

• Management expects continued profitability improvements, supported by operational excellence and growth in new business areas.

• Target for new and adjacent business is to reach 20% of total business by end of 2027.

• Group targets: adjusted EBITA margin 5%, annual growth 2-4%, leverage 1.5-2.5x net debt/adjusted EBITDA.

• No external timeline for achieving 5% EBIT margin, but internal plans are in place.

• Dividend payout subject to leverage target.