Elektrotim has been in a period of high earnings momentum since mid-2022. We estimate that for the full year 2023, the net result should exceed the profit total that the company had planned in the 'minimum' scenario for 2023-25. This was supported by a high order book and a decrease in cost pressures and even the Zeus bankruptcy issue was not that significant. The performance base will now become more challenging.
The peri-election period translates into low decision-making in the awarding of new public tenders, but the company's portfolio is pretty much filled for H1'24. Looking ahead to H2'24/2025, the signing of the contract for the Bug River perimeter (PLN 227m) is key. The tender was still awarded by the previous government, but it has EU funding, so we assume that a final executive contract will be signed.
In the medium term, the company should be a beneficiary of unlocking EU funds (exposure to energy transition). We set our current target price at PLN 19.1, implying an Accumulate (previously Buy) recommendation. Recent results
