TeliaSonera returns to profit despite 4Q stumble

11 Feb 2004

Scandinavian telecoms giant TeliaSonera saw its pro forma net income for 2003 rise considerably, despite a fourth quarter fall in profit. The pro forma figures are calculated as if the merger of Telia and Sonera had taken place on 1 January 2002 and exclude Telia’s Finnish mobile operations and Swedish cable TV operations. The group posted 4Q net income of SEK2.7 billion, down SEK300,000 year-on-year which, it said, was because it did not repeat a tax gain made in 2002. Net earnings for the year were SEK7.67 billion, compared to the huge SEK32.9 billion loss posted a year earlier, much of which was incurred in write-downs and one-off costs associated with its merger. Operating income increased to SEK13.14 billion, from a loss of SEK45.96 billion the year before, as net sales grew 1% to SEK81.77 billion. The group’s chief executive Anders Igel has cut more than 2,000 staff since taking charge at Telia in June 2002, the bulk of which have been at the telco’s struggling fixed line operations, and achieved cost savings of SEK882 million in 2003.

Following its extensive restructuring completed in late 2002, TeliaSonera organises its operations into four divisions: Mobile Communications, Internet Services, Telia Networks (fixed line) and International Carrier. Mobile and internet are the group’s fastest growing businesses and TeliaSonera had 11.96 million mobile customers at its consolidated operations and 25.65 million in associated companies by the end of 2003, growth of 13% and 34% respectively. The group has 3G concessions in Finland, Germany, Spain, Italy and Switzerland, and expects to launch 3G services in Sweden in March 2004, with a network providing 70% coverage of the population, the highest of any 3G operator in Europe. It intends to extend its Swedish 3G reach by buying the licence of rival cellco Orange. The group had a total 1.69 million internet customers by the of 2003, of which 678,000 were broadband, up from 1.48 million the previous year. However, fixed line customers fell by 247,000 over the year to 8.06 million. TeliaSonera expects to see mobile and internet growth continue into 2004; it will release its full 2003 annual report in April.

Sweden,Telia Company,

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