Teleste looks to North America for growth after tough quarter

Broadband and video technology outfit Teleste’s results for the three months to December describe a difficult quarter for the company, with net sales declining by a third to €30.7 million, with an adjusted operating loss of €1.4 million taking the place of a positive €0.5 million for the prior year period.

CEO Esa Harju said that the company was looking to recovery in the North American market to grow this year.

Harju said that volume and revenue within the broadband networks business “remained very modest in the last quarter of 2023, due to low market demand”, with operators cutting costs and making the most of existing inventory,

He said that European market demand would “remain uncertain” this year, which is partly down to uncertainty around how cable opertors transition to next-generation cable and fibre-based technologies.

Unfortunately for Teleste, the North American market also slowed down in the second half, said Harju, with operators scaling down planned investments.

“However, the North American market is expected to gradually recover during 2024. We will start commercial deliveries of our next generation 1.8G smart amplifiers to North American customers in the first quarter of 2024,” he said, adding that this market recovery would “progressively show” in the company’s revenue this year.

Harju identified the North American market as a key priority this year, which he said should “compensate for the more uncertain market outlook in Europe”.

Teleste’s public safety and mobility business lines also fell short of expectations in the fourth quarter.

The final quarter pushed down numbers for the full year, with Teleste reporting a decline in net sales of 8.3% to €151.3 million and a decline in adjusted operating profit of 41.2% to €1.2 million.

The results announcement follows a profit warning issued in December, reflecting lower than forecast deliveries. Teleste said at the time that it would seek to cut costs and re-prioritise.

Harju said that Teleste aimed to achieve annual cost savings of €6 million, which will be realized gradually from the first quarter onwards. The company is laying off staff as part of this exercise.