Eltel announced on Friday a five-year frame agreement with KONSTANT in Denmark, valued at 73 MEUR. Unlike the Telenor agreement announced earlier this month, where a large share of the headline value was already reflected in our estimates, this is a new customer. The agreement therefore represents incremental volume for the Danish operations and, in our view, strengthens its position on the Danish Power market. However, the annual addition to our group estimates is modest (<2%), and we expect mobilization costs to absorb much of the initial earnings uplift when the contract begins in early 2027. Consequently, the announcement does not trigger any immediate changes to our estimates, and we will review these in conjunction with the Q3 report at the latest.

New volume strengthens the Danish Power business

The agreement with KONSTANT covers the expansion, operation, and maintenance of the electricity distribution network in parts of Jutland, running for an initial five years with a three-year extension option. Importantly, this is a new customer for Eltel, meaning the 73 MEUR value (~15 MEUR annually) represents genuinely new volume rather than the defense of an existing base. In our view, this is a positive strategic step that broadens the customer base and strengthens Eltel's position in the Danish Power market. We believe it also supports the ongoing shift in Eltel's Danish business mix towards energy infrastructure as Communication volumes decline. We estimate Danish Power revenue at roughly 35–40 MEUR, so ~15 MEUR annually is a step-up of more than a third at unit level. However, the impact at the group level is more modest, as the annual run-rate corresponds to roughly 1.7% of our 2027 revenue estimate for the group (2027e: 874 MEUR). We would also note that, as a frame agreement based on expected volumes, the contract enters the total orderbook rather than the committed order backlog.

2027 start and mobilization costs warrant a cautious stance on near-term earnings impact

The contract starts on 1 February 2027. As Eltel plans to recruit approximately 40 technicians, we expect recruitment, fleet, and operational set-up costs to weigh slightly on the unit's profitability during the ramp-up, with 2028 being the first year at full run-rate. A more persistent question is pricing, as Eltel is taking the assignment from an incumbent contractor, and the press release gives no indication of the contract's margin profile. Given this, we maintain a cautious view of the near-term earnings impact.