Telia’s Q2 revenues down 2%, annual outlook unchanged

20 Jul 2016

Nordic/Baltic heavyweight Telia Company has issued its results for the second quarter of 2016, excluding its discontinued/held-for-sale Eurasia regional mobile division and its held-for-sale Spanish cellco Yoigo. Q2 net revenues in local currencies, excluding acquisitions and disposals, declined 1.0% year-on-year, whilst in reported currency net revenue declined 2.0% to SEK21.130 billion (USD2.460 billion) in the three months ended 30 June 2016. Underlying quarterly service revenues in local currencies, excluding acquisitions and disposals, declined by 0.2%. EBITDA, excluding non-recurring items, increased 5.1% in local currencies, excluding acquisitions and disposals, whilst in reported currency EBITDA excluding non-recurring items increased 4.1% to SEK6.389 billion in the quarter, boosting the Q2 EBITDA margin from 28.5% to 30.2%. Operating income excluding non-recurring items grew 20.1% to SEK4.446 billion. Net income attributable to owners of the parent company fell 55.8% y-o-y to SEK1.439 billion in 2Q16, impacted by effects in discontinued operations. Telia’s full year outlook remained unchanged, foreseeing EBITDA on a comparable basis in line or slightly above 2015 for continuing operations. Annual CAPEX excluding licensing and spectrum fees for continuing operations is expected to be SEK14-SEK15 billion.

In its domestic market of Sweden, Telia’s service revenue growth stayed positive in the consumer segment in Q2, supported by its ‘value loading strategy’ in mobile, together with further progress in broadband and TV. Telia Sweden’s new social media proposition (bundling mobile data-charge-free access to a comprehensive range of popular online services) launched in April generated ‘good traction’ and contributed to a positive mobile subscription intake in the quarter. Telia Sweden’s fibre rollout was further accelerated to meet pent up demand, particularly in the single-dwelling unit segment, and the operator has now surpassed 1.4 million fibre households passed, and says it is on track to achieve its 1.9 million household coverage target by 2018. In Norway, Telia highlighted that its 4G high speed mobile internet coverage has risen to 98% of the country’s population, almost two and half years earlier than the regulatory requirement.

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