Eltel signs a four-year frame agreement with Caruna in Finland

Eltel announced on Monday that they have signed a four-year continuation of an existing frame agreement with Caruna, Finland's largest electricity distribution company. The contract is valued at around 81 MEUR and covers services related to ensuring the reliability of electricity distribution. Although the deal represents a continuation rather than new scope, it is a positive development as it strengthens Eltel’s order backlog and provides long-term visibility for the Power business in Finland. As such, the news supports our estimates for the stability of the core business and does not have a direct impact on our forecasts or view on the company.

The agreement is an important anchor for the company's Finnish operations

The new framework agreement with Caruna will come into effect in March 2026 and will continue until 2030, including two three-year option periods. The contract is valued at around 81 MEUR for the four-year contract period, which translates to an average annual revenue of around 20 MEUR. The agreement covers field services for Caruna's end-customers, fault repairs, maintenance, and construction work for the distribution network. This is Eltel's core business, and securing the contract is important for the stability of the Finnish unit.

Framework agreement renewal supports our outlook, no estimate revisions

The annual value of the agreement corresponds to around 2% of our 2026 revenue estimate (2026e: EUR 876 million) at the Group level. Caruna has been one of Eltel’s customers within the Power segment for over a decade, so this newly signed framework agreement does not represent a new client for the Group. Rather, it marks a continuation of the existing framework agreement (signed in 2022 at a similar value). Importantly, the renewal is very likely to be based on more favorable commercial terms, which should support Eltel’s ongoing margin improvements in line with its strategy.

Since the renewal of such key framework agreements is one of our core assumptions in our estimates, the news primarily reinforces our existing outlook and reduces the uncertainty associated with our forecasts. Therefore, we are not revising our Eltel estimates at this stage.