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Investing.com -- Netel (ST:NETEL), a Nordic telecom and infrastructure services group, on Wednesday said impairments in three subsidiaries and weaker market conditions will weigh on its results for 2025, prompting the company to take cost-cutting measures and reset profitability targets.
The company said it expects revenue for the full year to total about SEK 3 billion. That represents a decline of roughly 9% compared with 2024, and falls short of the group’s long-term target of 3-5% annual organic growth.
Netel forecast an adjusted EBITA margin of 1.5-2% for 2025, significantly below its financial target of 5-7%.
Excluding the three subsidiaries affected by impairments, acquired in 2021-2022, operations accounting for more than 90% of Netel’s expected revenue are estimated to deliver an adjusted EBITA margin of about 4-5%.
The company said more projects than expected are in early phases in the second half of the year, temporarily affecting capital tie-up.
The impairments mainly relate to completed projects and are not expected to have any future impact on cash flow.
To address the challenges and improve profitability, Netel said it has initiated several measures.
These include a review and refocus of operations in the United Kingdom; changes in management and new profitable agreements at a subsidiary within its power division; and a new organization and profitable agreements in a subsidiary within infraservices.
In addition, Netel is implementing cost savings across central functions in Sweden and Norway, with an expected EBITA improvement of at least SEK 25 million. Part of these savings has already been implemented, and the full effect is expected in 2026.