Telia Company posted a Q1 2016 net profit of SEK3.9 billion ($484 million), a decrease of 4.9 per cent from a year ago, as it completed the divestment of Ncell in Nepal to Axiata and confirmed a name change from TeliaSonera.
Revenue fell 0.9 per cent to SEK20.39 billion while net profit in the Eurasia region, reported as discontinued operations, went down by 41 per cent to SEK1 billion.
“2016 has started well from an earnings perspective, but we expect growth to slow as we face tougher year-over-year comparisons in the quarters to come,” warned president and CEO Johan Dennelind (pictured).
“However, we raise our expectations somewhat for the full year and anticipate EBITDA on a comparable basis to be in line or slightly above the level in 2015 for the continuing operations. Capex excluding license and spectrum fees for the continuing operations is expected to be SEK14-15 billion,” he added.
Dennelind also said positive effects from last year’s acquisition of Tele2 Norway continued to support its margins and the company has now reached its synergy target of SEK1 billion.
The name change to Telia was “to emphasise our common purpose, culture and values,” he explained.
In 2016, Telia wants to focus on driving “growth and strengthen long-term competitiveness,” including a further build out of 4G capacity and coverage across core markets, now viewed as Europe and the Baltic region.
Regarding an ongoing investigation over alleged corruption in Uzbekistan that may be part of the reason for pulling out of Eurasia, the CEO told The Wall Street Journal there is “clearly a likelihood” that the operator “will get some negative economic impact,” but that the extent of this would not be clear until the end of the year.
TeliaSonera completed the divestment of its holding in Nepalese operator Ncell to Axiata for more than $1 billion, based on an agreement in December 2015.
Axiata has around 275 million customers and 25,000 employees in Asia and it believes Ncell will complement its portfolio of telecommunications assets, which includes operations in Malaysia, Indonesia and Sri Lanka.
“It is comforting that we have been able to hand over the operation to an established player in our industry,” commented Dennelind.