Elisa shares drop on soft revenue figures

Investing.com — Shares of Elisa Oyj (HE:) were down on Friday following its third-quarter 2024 financial results, which posted softer-than-expected revenue figures. 

At 5:15 am (0915 GMT), Elisa Oyj was trading 6% lower at €45.92.

Elisa’s revenue for the period decreased by €9 million, reaching €536 million, down 1.6% compared to the same quarter in 2023, the company said in a statement. 

This shortfall was primarily attributed to “lower equipment sales and regulated revenue as well as the net impact of acquisitions and disposals.”

While mobile service revenue grew by 4.8%, hitting €254 million, these gains were not sufficient to offset the broader declines in other areas. 

The company’s fixed network services and equipment sales suffered, and reductions in traditional telecom service usage contributed to the overall decline in revenue. 

Additionally, the ongoing challenging macroeconomic conditions, including geopolitical uncertainties, prompted companies to scale back expenditures, which impacted Elisa’s corporate service offerings.

Despite the revenue contraction, the company’s earnings showed resilience. EBITDA rose to €206 million, reflecting a 3.7% year-on-year increase. 

This growth was driven by improved efficiency and higher profitability in Elisa’s business segments, including mobile services and international digital services. 

decreased by 4.3% to €1.3 billion. Despite this, cash flow decreased by 10.7% due to higher capital expenditures during the quarter. 

Looking ahead, Elisa maintained a cautious outlook, citing ongoing economic uncertainties and continued intense competition in the Finnish telecom market. 

The company reiterated its guidance for 2024, expecting full-year revenue to remain at the same level or “slightly higher” than in 2023.

Citi Research in a note flags a potential downside risk to its fourth quarter revenue and MSR consensus due to the soft performance in digital and fixed services. 

Additionally, rising churn in the Finnish postpaid mobile segment to 16.8%, the highest since the third quarter of 2022, is a point of concern. This is particularly important given the growing competition in the Finnish mobile market.