Nordic mobile, fixed line and broadband group TeliaSonera has reported a 9% year-on-year drop in its second-quarter net profit, partly due to higher costs related to investments for future growth. The Stockholm-based telco said its growth strategy will remain unchanged and that it will continue to focus on developing its operations in its Scandinavian markets and ‘creating value’ in its Eurasian operations, including Turkey and Russia, as well as developing its investment in Spain.
In the three months ended 30 June 2007, TeliaSonera’s net profit fell to SEK3.83 billion (USD567 million), down from SEK4.21 billion in 2Q06, whilst operating income of SEK5.8 billion was down from SEK6.18 billion, on sales that rose to SEK23.9 billion, compared with SEK22.74 billion a year ago. The company warned that growth ‘comes at a price and is impacting short term profitability’, adding that a shift from traditional to new areas such as IP-based services ‘is crucial’ and will lead to the implementation of additional efficiency measures. In the first quarter of 2007, TeliaSonera launched a cost-savings programme aimed at saving around SEK1.5 billion in the full-year, and annual gross savings of SEK2.3 billion from 2008. The firm reiterated its future guidance, saying it expects continued growth in sales, reaching its target of around SEK100 billion in annual revenues in 2008. The group’s total subscribers reached 103.4 million at the end of June 2007, after adding 1.2 million new subscriptions in the quarter in majority-owned operations, and two million new customers at associated companies.