TeliaSonera Q4, FY performance dragged down by Eurasia

29 Jan 2015

Scandinavian telecoms group TeliaSonera reported today that its fourth quarter consolidated revenues in local currencies, excluding acquisitions and disposals, decreased by 2.2% year-on-year, while in reported currency the net revenue figure increased by 0.2% to SEK26.606 billion (USD3.240 billion) in October-December 2014, compared to SEK26.560 billion in the same period of 2013. Service revenues in local currencies, excluding acquisitions and disposals, decreased by 2.2% in 4Q14, impacted by a more challenging macro-economic environment in Eurasia. Due to the generally slower overall group revenue development, quarterly EBITDA decreased 3.5% in local currencies, while in reported currency EBITDA fell by 1.4% y-o-y to SEK8.604 billion (excluding one-off items), causing the Q4 EBITDA margin to drop by 0.6 percentage points to 32.3%. Operating income, excluding non-recurring items, fell 4.8% in Q4 to SEK6.757 billion (from SEK7.100 billion in 4Q13), as profitability declined in Eurasia, attributed to increased uncertainty regarding economic growth impacting operations in key markets including Kazakhstan and Azerbaijan. Net income attributable to owners of the parent company increased 34.2% to SEK2.938 billion in the three months to 31 December, compared to SEK2.190 billion booked in the year-ago quarter.

TeliaSonera’s full-year net revenues in local currencies, excluding acquisitions and disposals, decreased by 1.8%, while in reported currency, net sales fell 0.8% to SEK101.060 billion. Service revenues in local currencies, excluding acquisitions and disposals, decreased 1.0% in full-year 2014. The group added that although telecoms sector growth remained modest in its operating markets, causing revenue pressure, it maintained an annual EBITDA margin of 34.9%, on par with 2013 and in line with company projections. Full-year net income attributable to owners of the parent company dropped by 3.1% to SEK14.502 billion (compared to FY13’s bottom line of SEK14.970 billion).

In the group’s home market of Sweden, TeliaSonera noted that it continued to upgrade fixed and mobile networks in order to meet an increasing customer demand for high speed internet access, including a 4G LTE network which covers more than 99% of the population five years after its launch. Mobile service revenue growth in Sweden improved to nearly 2% in Q4 2014, supported by further increases in data usage, while Swedish 4G network traffic surpassed its 3G counterpart. The Swedish fibre broadband access network was further expanded in the quarter, now reaching more than 1.1 million households.

In 2015, TeliaSonera targets EBITDA around the same level as in 2014, and foresees CAPEX of around SEK17 billion, excluding licence and spectrum fees.

Sweden,Telia Company, Telia Sweden,

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