TeliaSonera’s 2Q profits up 10% on 1% revenue increase

18 Jul 2012

Swedish telecoms group TeliaSonera’s second-quarter revenues climbed 1% year-on-year to SEK26.294 billion (USD3.749 billion), while net profit attributable to owners of the parent company rose by 10% to SEK4.247 billion, up from SEK3.860 billion a year earlier. Both operating income (EBIT) and EBITDA excluding one-off items decreased by 2% year-on-year, however, standing at SEK6.320 billion and SEK9.006 billion respectively in the period April-June 2012. EBIT excluding non-recurring items declined by 6.1% to SEK6.561 billion.

In April TeliaSonera resolved long-running governance disputes with fellow shareholders in Russian operator MegaFon, and reduced its ownership stake; as a result, the Swedish group received a one-time dividend of SEK12.4 billion in the second quarter, which it heralded as a resounding success given its total investment of SEK1.2 billion in MegaFon since 1994. Overall, non-recurring items affecting operating income totaled SEK-242 million in the three months to the end of June 2012, mainly related to the sale of shares in MegaFon which resulted in a net capital gain of SEK3.013 billion, plus impairment charges in mobile services in Norway and Lithuania of SEK3.070 billion.

Revenue-wise, TeliaSonera experienced broadly stable, predictable growth trends within its Broadband Services (down by 0.8% to SEK9.09 billion) and Eurasia (up by 18.9% to SEK4.93 billion) divisions, but its European Mobility Services division experienced slowing growth in both service revenues and equipment sales in Q2 2012, with the division’s overall turnover down by 2.3% to SEK12.58 billion. Due to the growth slowdown in key mobile markets, which drove a reduction in organic sales growth from the 2.9% reported in Q1 2012 to flatline in Q2, TeliaSonera has lowered its full-year outlook, and now expects organic revenue growth of below 1% compared to an earlier forecast of 1%-2% organic growth.

Consolidated total subscriptions increased by a net 15.2 million in twelve months to reach 174.6 million at 30 June 2012, of which 65.5 million were in consolidated subsidiaries (up by 6.4 million year-on-year) and 109.1 million were in associated companies (up by 8.8 million in a year). Quarter-on-quarter the total number of subscriptions increased by 1.4 million in the consolidated companies and by 800,000 in associated operations in 2Q12.

Sweden, Telia Company