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TeliaSonera reports 3Q group results

26 Oct 2007

Scandinavian telecoms group TeliaSonera has posted its ‘best ever’ third quarter results, according to its president, Lars Nyberg, who highlighted ‘strong sales growth and substantial profit contributions’ from the group’s Eurasian division as a key factor. The Stockholm-based fixed line, mobile and broadband operator reported that consolidated revenues in the three months to the end of September 2007 increased by 7.1% year-on-year to SEK24.798 billion (USD3.855 billion), whilst EBITDA excluding non-recurring items reached SEK8.714 billion, down from SEK8.756 billion in 3Q06. Quarterly operating income excluding non-recurring items increased to SEK8.354 billion, from SEK7.802 billion a year earlier, and net income rose from SEK5.745 billion in 3Q06 to SEK6.213 billion in 3Q07. The company expects full-year net profit in 2007 to be ‘somewhat higher’ than in 2006, excluding the positive one-off items of approximately SEK1.7 billion last year.

TeliaSonera’s total number of subscribers increased during the quarter to 109.5 million by the end of September 2007, with 2.5 million net new subscriptions at majority-owned operations and 3.6 million net acquisitions at associated companies. In its Mobility Services division, turnover increased 6.4% year-on-year to SEK11.551 billion (SEK10.859 billion), lifted by the acquisition of MVNO debitel in Denmark in April, the continued development of Spanish 3G operator Yoigo and solid volume growth in Sweden and the three Baltic countries. Strong underlying development in Finland also helped the results. In the group’s Broadband Services area, total sales increased 2.6% year-on-year to SEK10.378 billion (SEK10.119 billion), with revenue rising in all markets except Sweden, where a decline in turnover, caused by lower fixed voice sales, is slowing down and ‘approaching the point where growth in broadband sales fully compensates for the decrease in fixed voice’, according to the firm’s press release. In absolute terms sales were strongest in Wholesale where voice, internet and data revenues continued to rise. Estonia and Lithuania reported record high sales due to strong growth in broadband internet services. In the Eurasia division, net sales rose 26.5% year-on-year to SEK2.911 billion (SEK2.302 billion), boosted by continuing strong subscriber growth, particularly in Kazakhstan and Azerbaijan, as well as recent acquisitions in Uzbekistan and Tajikistan.

Total group CAPEX in July-September 2007 was SEK3.339 billion, up from SEK2.743 billion in the same period of 2006, driven mainly by increased investments in network capacity, and the launch of new mobile and broadband services. Lars Nyberg identified one of the group’s main priorities as migrating users from traditional fixed line voice networks to new services. ‘Currently, traditional fixed voice services generate approximately one third of the company’s free cash flow and hence shifting the product mix, including investments and costs, from traditional to new services is crucial,’ according to the president.

Sweden, Telia Company

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