Telia’s first quarter results saw losses related to its exit from its Eurasian businesses, as the company stated it is “not faltering” in its transformation plan for remaining core businesses.
“We continue to execute the transformation in Sweden and other markets, which is still holding back our full potential of our customer experience and efficiency agenda,” Johan Dennelind, CEO (pictured), said.
The company reported a loss attributable to shareholders for the period of SEK710 million ($84 million), compared with a prior year profit of SEK6.9 billion, on revenue of SEK19.9 billion, up 3.2 per cent from SEK19.2 billion. The stinger was a loss of SEK2.9 billion from discontinued operations, compared with SEK4.6 billion profit.
Telia noted the disposals of Azercell and Geocell resulted in capital losses and lower net income contribution, and an impairment charge related to Ucell.
On an operating level, income of SEK3.4 billion was down 4 per cent from SEK3.5 billion.
In Sweden, service revenue decreased 1.4 per cent as gains in mobile were more than offset by lower fibre installations and pressure on legacy revenue unit in the fixed operation. A similar trend was also seen in Finland.
Both markets saw EBITDA gains from “lower resource costs”, as well as reduced pension expense in Sweden and reduced marketing costs in Finland (following the Sonera rebrand).
Telia also touted “solid development in Norway”, “cost savings in Denmark”, “strong development in Lithuania” and “revenue and EBITDA uplift in Estonia”.
The CEO said a recent change in dividend policy at Turkcell and the divestment of a stake in Spotify is benefitting the balance sheet. The Spotify sale brought the company 2.4-times its original investment, while the Turkcell dividend will bring Telia around SEK0.9 billion this year.
Telia is looking to buy-back shares worth a total of SEK15 billion over the next three years, “to return excess cash to shareholders and to optimise the capital structure of the company”. Combined with dividends, the company said “we believe that we will be offering an attractive total return to our shareholders”.
And the company will “still have room to execute disciplined value creative M&A within our Nordic and Baltic strategy”.