Last checked at 21 Oct 2016 07:00
Third quarter summary
Former segment region Eurasia is reported as held for sale and discontinued operations. The mobile business Yoigo in Spain and the Sergel companies are reported as assets held for sale. Net sales in local currencies, excluding acquisitions and disposals, decreased 1.2 percent. In reported currency, net sales decreased 0.9 percent to SEK 21,524 million (21,712). Service revenues in local currencies, excluding acquisitions and disposals, decreased 1.1 percent. EBITDA, excluding non-recurring items, decreased 1.6 percent in local currencies, excluding acquisitions and disposals. In reported currency, EBITDA, excluding non-recurring items, decreased 1.5 percent to SEK 6,850 million (6,957). The EBITDA margin, excluding non-recurring items, decreased to 31.8 percent (32.0). Operating income, excluding non-recurring items, fell 16.0 percent to SEK 4,742 million (5,648). A provision of SEK 12.5 billion was recorded in the quarter for settlement proposed by the U.S. and Dutch authorities. See Note 4 for further information. Total net income attributable to the owners of the parent fell to SEK -8,810 million (4,589) and earnings per share to SEK -2.03 (1.06). Total net income fell to SEK -8,641 million (5,023). Full year outlook is unchanged.Nine month summary
Net sales in local currencies, excluding acquisitions and disposals, decreased 1.1 percent. In reported currency, net sales decreased 1.3 percent to SEK 63,049 million (63,860). Service revenues in local currencies, excluding acquisitions and disposals, decreased 0.7 percent. Operating income, excluding non-recurring items, increased 4.0 percent to SEK 13,386 million (12,876). A provision of SEK 12.5 billion was recorded in the third quarter for settlement proposed by the U.S. and Dutch authorities. See Note 4 for further information. Total net income attributable to the owners of the parent fell to SEK -3,605 million (11,561) and earnings per share to SEK -0.83 (2.67). Total net income fell to SEK -829 million (12,832).COMMENTS BY JOHAN DENNELIND, PRESIDENT & CEO
”In the third quarter, our financial results are severely impacted by a SEK 12.5 billion provision related to the US and Dutch authorities settlement proposal, announced in September, as a consequence of our entry into and operations in Uzbekistan. We have been aware of the US and Dutch interest since March 2014, and have from the beginning cooperated with all authorities. Our discussions with relevant authorities continue with the goal of achieving a resolution that will be in the best interest of our shareholders. It is at present not possible to make a certain assessment on the final outcome or time for resolution, but we believe we are approaching the end of these investigations. During the last three years we have repeatedly said that we have seen and found wrongdoings in how the entry into Uzbekistan happened. From 2013 we have worked intensely to significantly improve our agenda around responsible business. These improvements are further outlined in our latest Sustainability Update report issued today, and this is a journey with no end. It is an ongoing part of the way we now do business – to learn and improve.
In line with our projections and guidance earlier in the year, underlying earnings growth slowed somewhat in the third quarter. Comparable EBITDA declined by 1.6 percent compared to corresponding period last year, as a positive development in region Europe was offset by a decline in Sweden.
Our performance in Sweden remains characterized by stable growth in the consumer segment, but pressure in parts of the enterprise area. In consumer, our value loading strategy in mobile continues to gain traction, with positive effects on both subscriber intake and churn. In broadband and TV, ARPU trend stayed positive and supported overall growth. TV shows strong performance and we recently boosted our offerings further with new content and features. In the fiber area, demand remains solid but deliveries were somewhat impacted by delays with digging permits and sub-contractors, but we foresee momentum picking up in the fourth quarter. In the enterprise segment, there was further progress in the SME/SoHo area as we continue to strengthen our ICT offering. However, overall performance remains impacted by significant price pressure in the large enterprise and public segments.
There was good progress in region Europe and the majority of the operations posted positive mobile service revenue growth. In Finland, mobile-billed revenue growth climbed to 6 percent, supported by upsell activities and price adjustments. In Norway, the customer perception of the Telia brand improved further following the best network awards received earlier in the year.
Profitability improved, supported by reduced marketing spend and general cost efficiency.
In early October, we finalized the divestment of Yoigo in Spain to Masmovil, in line with our ambition to increase focus on the Nordic and Baltic region.
We recently announced the sale of our 60 percent stake in Tadjik operator Tcell to Aga Kahn Foundation for Economic Development (AKFED), which now takes full control of the unit. We are in a process of divesting our shareholding in Fintur Holdings as part of the ambition to reduce our presence in Eurasia over time. One potential buyer has been the minority owner in Fintur Holdings, Turkcell, who publicly disclosed their interest earlier this year. After many months, we have now reached a point where we will together with Turkcell explore a joint divestment of Fintur Holdings. This will most likely happen in 2017.
The coming year and onwards will see a number of important regulatory files being addressed at both the local and the E.U. level. Amongst others, the recent publication of the proposed new European Electronic Communications Code, will require careful scrutiny to ensure that customer expectations and the investment needed to achieve them is adequately incentivized and supported. An issue we have long been active on driving to deliver a better customer experience is roaming, where policy makers need to ensure that decisions taken at a principle level do not result in complications, limitations or fragmentation of the customer experience.
On the back of our performance in the first nine months, we reiterate the full year 2016 outlook.”
QUESTIONS REGARDING THE REPORTSTelia Company ABwww.teliacompany.comTel. +46 8 504 550 00
Telia Company AB discloses the information provided herein pursuant to the Swedish Securities Markets Act and/or the Swedish Financial Instruments Trading Act. The information was submitted for publication at 07:00 CET on October 21, 2016.
This information was brought to you by Cision http://news.cision.com
View source version on businesswire.com: http://www.businesswire.com/news/home/20161020006767/en/
Copyright Business Wire 2016