TeliaSonera issued another detailed response to criticisms from US research firm Muddy Waters over its financial reporting record, as it posted a mixed set of Q3 results.
The Swedish company, accused last week of withholding information from investors concerning some of its Eurasia operations, issued a statement alongside its latest quarterly report stating auditors Deloitte had conducted a review and “not identified any new information that causes them to believe that the consolidated financial statements for 2014 or the 2015 interim results should have been presented in a different way”.
The criticism came after TeliaSonera last month announced plans to exit seven markets in the region, as it places increased focus on its operations across Europe and its home market.
Profit forecast cut
The company posted a 12.7 per cent rise in Q3 net income attributable to shareholders to SEK4.59 billion ($552.5 million), from Q3 2014 figures of SEK4.07 billion, on net sales increasing by 6.3 per cent to SEK27.03 billion from SEK25.42 billion.
The company however said its group outlook for 2015 had changed, with EBITDA in local currencies, excluding acquisitions and disposals, “expected to be below the level in 2014”, differing from its Q2 report, when it forecast it would be at “around last year’s level”.
It also said free cash flow decreased to SEK4.7 billion from SEK6.4 billion, “mainly explained by lower dividend from MegaFon, as the company intends to pay out dividends in two tranches in 2015″.
“In the third quarter, there was an encouraging performance in our operations in Sweden and Europe, with both regions turning to positive organic EBITDA growth,” said Johan Dennelind, TeliaSonera’s president and CEO.
Addressing struggling Eurasia, the company “continues to face challenges”, said Dennelind, which was accentuated in particular by issues in Kazakhstan, its largest market in the region.
“Price competition is fierce in the country and profitability was also affected by increased interconnect costs due to higher off net volumes following recent product launches,” he said.
The executive said the integration of its recently acquired Tele2 business in Norway remains “well on track”, while stating the company “will continue to seek ways to improve profitability” in Denmark, following the failure of its proposed merger with Telenor in the country.
According to Bloomberg, TeliaSonera has also revived plans to sell its mobile phone unit Yoigo, with local telecoms provider Masmovil Ibercom, as well as a number of private equity firms, expressing an interest in the company.