Teleste to ‘revise its strategy’ following poor quarter with sale of German Cableway

Finland-based tech firm Teleste has decided to sell off its German services business Cableway.

The announcement came alongside Teleste’s Q1 results where it announced an 11.4% decrease in net sales and an 18.3% dip in adjusted operating profit. The company said that this poor quarter has prompted it to “revise its strategy”  and that it will “focus on technology business operations and the services of higher added value supporting them” with its German services business on the chopping block.

The company added that it will assess different options with a primary objective to sell Cable way “during the next few months.”

It justified the move by saying: “The Germany-based extensive cable network field services have had limited synergies with Teleste’s technology and product businesses. The operational development and growth of field services require investments that do not support Teleste’s technology and product business operations. Teleste engages in the services business in Germany through the Cableway companies, which have a leading position in cable network field services. Business development and growth investments are better suited to an owner for whom extensive network field services are core business.”

Cableway, which employs around 470 people in Germany, provides cable networks with turnkey field services. The company’s net sales for the 2019 were €70.1 million with an operating loss of €900,000.

Elsewhere, sales in Teleste’s video and broadband solutions division decreased by 11.5% to €31.20 million for Q1, but a positive note is that incoming orders rose to €40.5 million – an increase of 2%.

Of the ongoing coronavirus pandemic, Teleste said that its operating capacity and consumer demand are all at risk, though its supply chain and component availability have only had a limited impact. The company said that it expects the negative impacts of coronavirus on its full-year net sales to be significant.