The Q2'23 period was another quarter of positive earnings surprise from Elektrotim. The earnings conference also highlighted the positive outlook for the next quarters, which implies a seasonal improvement in 2H and an increase in y/y results in 2023.
Sentiment towards the company was spoiled by the filing of Zeus' bankruptcy petition. At the same time, we note that the value of this entity was already written down to zero after Q2'23, and Elektrotim's current financial exposure is limited to ca. PLN 3-4m.
The peri-election period translates into low decision-making in awarding new public tenders, but the company's portfolio already fills a large portion of its 2024 revenue forecast. On the positive side, we note the BG's announcement in September of tenders for perimetry on border rivers with Belarus. Following the 1H'23 results, we are upgrading our modelled earnings forecasts (our previous EBITDA forecast was 57% executed after 1H'23, and management believes the next quarters should be better due to seasonality). We set our current target price at PLN 17.1, which implies reiterating a Buy rating.
