Telia CEO Johan Dennelind (pictured) confirmed the company’s ambitions to divest its assets in four Eurasian markets by end-2017, as it homes in on a long-term strategy to operate across “a pure Nordic/Baltic footprint”.
Commenting in Telia’s Q3 2017 earnings statement, Dennelind said the company made “step by step” progress towards its goal during the period after divesting shares in Turkcell and MegaFon, which also led to one-time gains.
Telia decided to exit its operations in the Eurasia region in 2015, following controversy in Uzbekistan in particular, and instead renew its focus on the Nordic and Baltic regions.
It is currently seeking a buyer for its stake in Fintur Holdings, which it owns together with Turkcell. Fintur holds Telia and Turkcell’s stakes in businesses across Azerbaijan, Georgia, Kazakhstan and Moldova.
While Dennelind indicated he is confident Telia would agree a sale of Fintur Holdings by the year-end, he would not set a “firm deadline”.
In terms of the company’s performance, Q3 saw Telia swing to a net profit of SEK2.5 billion ($306.6 million) from a loss of SEK8.6 billion in Q3 2016.
The company was hit hard this time last year after making a $1.4 billion provision for a fine relating to an investigation into its operations in Uzbekistan.
Of course, the company since reached an agreement with US and Dutch authorities over the Uzbek case, worth $965 million, which Dennelind reiterated “closed a sad chapter in the history of our company”.
Telia paid $757 million of the fine during Q3, and since the provision for the settlement was already recognised in 2016, it limited the impact in the recent period.
However, net sales in the quarter decreased 8.8 per cent to SEK19.6 billion, from SEK21.5 billion in the 2016 period.
Despite the drop, Dennelind was buoyant, stating “the trends we have been talking about all year” began to materialise during the period: “Both the activities to reduce our cost base and the efforts we have made to improve cash flow are yielding positive results”.
The CEO noted progress implementing a cost cutting strategy was “most visible in Sweden”. Overall, the company reduced operational expenses by 6 per cent, while all remaining countries “are seeing positive service revenue growth, mainly driven by mobile”.
Dennelind also reiterated his call for EU policymakers to set the right conditions for future technologies.
Telia made no secret of its ambitions to be one of the first to market with 5G, earmarking a launch in 2018. However, Dennelind said the company was worried about “the lack of recognition from European policy makers” over the need to “set a framework that supports others to invest in future technology for the benefit of the next generation”.