- Net sales EUR 276.0 million (295.5). Total growth -6.6% and organic growth(1 in Power and Communication -6.4%
- Operative EBITA(2 EUR 2.5 million (2.0) and operative EBITA margin 0.9% (0.7)
- Operating result (EBIT) EUR 2.1 million (1.6) and EBIT margin 0.8% (0.5)
- Net result EUR -2.0 million (0.2)
- Earnings per share EUR -0.01 (0.00), basic and diluted
- Cash flow from operating activities EUR 13.5 million. The comparable cash flow from operating activities before IFRS 16 impact(3 was EUR 6.9 million (-14.3).
- Net sales EUR 527.0 million (562.2). Total growth -6.3% and organic growth(1 in Power and Communication -4.3%
- Operative EBITA(2 EUR -0.5 million (-5.7) and operative EBITA margin -0.1% (-1.0)
- Operating result (EBIT) EUR -1.5 million (-8.8) and EBIT margin -0.3% (-1.6)
- Net result EUR -9.4 million (-9.3)
- Earnings per share EUR -0.06 (-0.06), basic and diluted
- Cash flow from operating activities EUR -20.3 million. The comparable cash flow from operating activities before IFRS 16 impact(3 was EUR -33.7 million (-50.1).
Significant events during and after the reporting period
- On 3 April 2019, Eltel announced it will focus on the Nordic market and has initiated an evaluation of strategic alternatives for its Polish and German operations, including a potential divestment.
- On 26 June, Eltel and LFV, Air Navigation Services of Sweden, signed a letter of intent according to which Eltel will divest the business area Aviation & Security to LFV. In the letter of intent, both parties undertake to ensure a definitive agreement is signed no later than the first quarter 2020. The definitive agreement is conditional on approval by the respective party’s board, the Swedish Competition Authority and the Swedish Government.
|EUR million||Apr-Jun 2019||Apr-Jun 2018||Change, %||EUR million||Jan-Jun 2019||Jan-Jun 2018||Change, %|
|Net sales||Net sales|
|Total Group||276.0||295.5||-6.6||Total Group||527.0||562.2||-6.3|
|Operative EBITA(2||Operative EBITA(2|
|Items not allocated(4||-2.2||-4.5||52.2||Items not allocated(4||-5.5||-8.3||33.3|
|Total Group||2.5||2.0||26.4||Total Group||-0.5||-5.7||90.3|
1) Adjusted for divested operations and currency effects.
2) Eltel follows the profitability of segments with Operative EBITA. Please see page 22 for definitions of the key ratios.
3) See page 21 for more information on IFRS 16 impact on cash flow.
4) Items not allocated to operating segments consist of Group management function.
Comments by the CEO
In the second quarter the operative EBITA margin continued to improve compared to last year and we see that the rolling 12-months gross margin is gradually recovering. The cash flow also improved compared to last year. Lower production volumes in Communication Sweden and the expected downturn in Smart Grids negatively impacted the trend. However, on the positive side, our large projects with high risk and low margins have had stable and good production during the period.
Both Sweden and Finland face decreased volumes in Power and Communication as our large customers are reducing their investment levels and we are selective in our tendering process. The markets in general are stable but we are cautious not to enter into unprofitable projects.
In segment Power, profitability was negatively affected by the expected decline in net sales in Smart Grids and weaker performance in High Voltage compared to the previous year.
In segment Communication, Norway and Denmark continued their stable and strong performance, with sales mainly driven by Build and increased customer investments. However, Sweden is facing the opposite: lower volumes in Build and reduced investment levels from major customers. We are therefore reviewing our cost structure in general.
During the quarter, we signed a letter of intent to divest the business area Aviation & Security to LFV, Air Navigation Services of Sweden. The definitive agreement is conditional on approval by the respective party’s board, the Swedish Competition Authority and the Swedish Government.
We continue to actively work on the strategic evaluation of our operations in Poland and Germany and we have made good progress during the period. We will announce our conclusions of the evaluation as it develops.
On the operational side, customer focus, flawless execution, production planning and efficiency in our operations are the main improvement areas. Together with the strategic agenda, these operational and efficiency improvements are the key elements for Eltel to continue to develop, grow and invest in the company to ensure long-term sustainable value creation for Eltel and its shareholders.
Casimir Lindholm, President & CEO
For further information, please contact:
Petter Traaholt, CFO
Tel. +46 72 59 54 749, email@example.com
Elin Otter, Head of Communications and Investor Relations
Tel. +46 72 59 54 692, firstname.lastname@example.org
Eltel AB discloses the information provided herein pursuant to the EU’s Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the above contacts, on 24 July 2019 at 08:00 a.m. CET.
Eltel is a leading Northern European provider of technical services for critical infrastructure networks – Infranets – in the segments of Power, Communication and Other, with operations throughout the Nordics, Poland and Germany. Eltel provides a broad, integrated range of services from maintenance and upgrade services to project deliveries. Eltel has a diverse contract portfolio and a growing customer base of large network owners. In 2018, Eltel had annual sales of EUR 1.2 billion. The total number of employees currently stands at around 7,100. Eltel AB has been listed on Nasdaq Stockholm since 2015.