Elektrotim's Q2'23 results sustained the company's year-long positive earnings trend. In Q2'23, Elektrotim posted revenue of PLN 128m and net profit of PLN 11.2m, which is the best Q2 in the company's history.
At the same time, at the end of Q2'23, the company recorded (as expected) a marked deterioration in its cash position (a significant increase in demand for working capital; we expect the situation to gradually improve in H2'23). After Q2'23, the Group's backlog amounted to PLN 626m, about half of which, in our view, is still to be executed in 2023. Management's goal after 1H'23 is to at least maintain margins.
Seasonally, we note that 2H is usually stronger than the beginning of the year; management believes there is no indication that the traditional seasonality will not be maintained this year. We currently assume the company will generate PLN 535m in revenue, PLN 50.5m in EBIT and PLN 37.7m in net profit in 2023. We take a more conservative approach to 2024 (the company is mainly pursuing contracts with deadlines <18m, the competitive environment for 2023 tenders is more challenging, and the situation on the cost side may turn around if EU funds are unblocked).
