News
Sweden-based telco reports slight decline in first quarter revenue, net profit.
Newly-named Telia Company on Wednesday raised its full-year EBITDA guidance despite posting declines in first quarter revenue and profit.
The Sweden-based telco generated revenue of 20.39 billion kronor (€2.22 billion) in the three months to 31 March, down from SEK20.59 billion in the same period a year earlier. However, lower costs and higher income from joint ventures and associated entities resulted in operating profit increasing to SEK4.08 billion from SEK3.22 billion.
Net profit fell to SEK3.91 billion from SEK4.11 billion in Q1 2015, but EBITDA increased 10.4% year-on-year to SEK6.22 billion.
"Our Swedish operation was a key contributor to the higher profitability, supported by better sales mix and lower costs," said Telia CEO Johan Dennelind, in a statement. "Service revenue growth in the consumer segment stayed positive, backed by solid demand for fibre solutions, good traction within TV and mobile customers migrating to larger data buckets."
Indeed, Telia’s first quarter group EBITDA margin widened to 30.5% from 27.4% in the same quarter a year ago, driven primarily by its Swedish business, which expanded its margin to 40.6% from 36.1%.
Telia is in the process of selling its Eurasian units, which are now reported as discontinued operations, focusing instead on its businesses in Europe, bringing them under the Telia brand.
First quarter EBITDA from continuing operations came in at SEK6.1 billion, up from SEK5.33 billion in Q1 2015.
"We continue to shape our company for the future with a clear focus on our core operations in the Nordic and Baltic countries. Four out of seven markets now carry the Telia brand and with new roam-like-home offerings in place we can further leverage our position and boost customer loyalty," Dennelind said.
At last week’s AGM, the telco also approved the decision to change its name from TeliaSonera to Telia Company, "to emphasise our common purpose, culture and values," across its operating footprint, Dennelind said.
"2016 has started well from an earnings perspective, but we expect growth to slow as we face tougher year-over-year comparisons in the quarters to come," Dennelind continued. "However, we raise our expectations somewhat for the full year."
Indeed, Telia expects EBITDA from continuing operations, excluding one-off charges, acquisitions and disposals, to be in line or slightly above last year, an improvement on its previous forecast of flat compared to 2015.
