TeliaSonera on Tuesday said it has experienced a slow start to the year, in line with expectations, but its Q1 numbers showed some growth at its challenged Eurasian business.
The Nordic operator reported group sales of 26 billion kronor (€2.8 billion) in the three months to the end of March, an increase of 1.5% in local currency terms, excluding acquisitions and disposals.
Based on those same parameters, service revenues declined by 1.1% to SEK22.8 billion, while EBITDA dropped by 4.3% to SEK8.5 billion.
"As expected, the start of the year has been somewhat slow, but we foresee a gradual improvement in the earnings trend and reiterate our full year outlook," said TeliaSonera CEO Johan Dennelind.
"We anticipate EBITDA, on a local organic basis, to remain around last year’s level and foresee capex at around SEK17 billion, excluding licence and spectrum fees," he said.
The operator’s Eurasia business returned to growth in service revenues, bringing in SEK5.26 billion, up 1.4% in local currency terms on last year, but the market is still challenging, as TeliaSonera predicted in its previous results announcement.
"The macroeconomic and competitive picture in parts of Eurasia remained demanding and we have put a lot of effort into re-positioning our offerings in order to make us more attractive for the customers," said Dennelind.
"The challenging environment is expected to remain near term," he said.
Dennelind noted that the telco’s operation in Nepal turned in a strong performance, but its business in Kazakhstan needs to become more competitive.
"The first quarter was eventful and I am particularly satisfied that we reached two milestones by closing the Tele2 Norway acquisition and in achieving an agreement on dividend distribution in Turkcell," Dennelind said.
The Norwegian Competition Authority (NCA) approved TeliaSonera’s SEK5.1 billion (€548 million) acquisition of Tele2 in February in return for a number of concessions, including the sale of mobile assets to rival operator Ice.
Regarding Turkcell, TeliaSonera in March reached agreement with its fellow shareholders on the distribution of dividends for the five years from 2010 to 2014.
"This was recently approved by Turkcell’s general assembly meeting and TeliaSonera’s share amounts to approximately SEK4.5 billion after tax," Dennelind said.
