Tele2 Group delayed plans for an extraordinary shareholder dividend and suspended its 2020 financial guidance, as CEO Anders Nilsson (pictured) voiced confidence in the company’s resilience to deal with short-term issues brought about by Covid-19 (coronavirus).
In its Q1 results statement, the company announced an expected exceptional dividend of SEK3.50 ($0.35) per share, set to be proposed and voted on at its AGM in May, would be postponed to “maintain a financial buffer until there is more clarity on the length and impact of the outbreak”.
The payment was set to be largely covered by the proceeds of the sale of its business in Croatia. Its regular dividend is unaffected by the move.
Despite efforts to retain cash in the business, Nilsson pointed to moves in recent years to refocus and restructure large parts of its operation increasing the company’s resilience against short-term issues.
Among its initiatives has been to sell non-core operations in favour of focusing on converged services in its core markets, alongside efforts to digitise the business.
In the earnings announcement, Nilsson added: “This strong foundation supports us as we face the unavoidable challenges of the corona pandemic. The fact that we almost entirely closed down all our offices over a night, and had a fully functioning remote organisation the next day, speaks to the level of digitalisation we have already achieved in our way of working.”
Net profit was broadly flat year-on-year at SEK1.2 billion, while revenue declined 1 per cent to SEK6.7 billion. Nilsson added although its 2020 guidance was suspended, its mid-term forecasts were so far unchanged.
He noted although connectivity was now “more important than ever” the company faced a decline of in-store sales, reduced revenue from international roaming and lower demand from business customers due to current economic conditions.Subscribe to our daily newsletter Back