Telia president and CEO Allison Kirkby (pictured) indicated high electricity costs and interest rates forced the operator to cut its earnings outlook for 2022 and 2023, with it now predicting core numbers this year to be broadly flat.
The operator previously predicted low single-digit growth in its core numbers for 2022, but in its Q3 earnings statement Kirkby explained energy costs are now estimated to increase by SEK900 million ($79.4 million) this year, which is SEK600 million higher than expected three months ago.
Kirkby noted macroeconomic headwinds “strengthened from a breeze to a mild storm” during the quarter.
She told Reuters Telia “basically saw a tripling of energy prices” during Q3, with volatile conditions a cause of concern despite it having a “70 per cent hedge”.
“It has been decades since the world last saw the macroeconomic conditions of today,” Kirkby added, noting increases in energy and interest rates posed a greater challenge “than we predicted only three months ago”.
Despite the stormy conditions, Telia increased net income to SEK1.9 billion compared with SEK1.6 billion in Q3 2021.
Kirkby also highlighted an increase in service revenue, which she attributed to the fact Telia’s business grew in all its markets for the first time in several years.
Telia’s net sales rose 5.6 per cent to SEK22.4 billion, while service revenue was up 2.3 per cent on a like-for-like basis at SEK19 billion. The operator again pointed to an especially positive performance from its core mobile network business.
Kirkby also noted 5G networks now cover 63 per cent of the population across Telia’s footprint, up from 49 per cent in June.
In Norway and Sweden, 5G coverage stands at 78 per cent and 40 per cent, respectively.
Telia Finland reached 75 per cent coverage by the end of the quarter, with Denmark at 70 per cent, Lithuania 80 per cent and more than 40 per cent in Estonia.Subscribe to our daily newsletter Back