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Profits jump at Tele2 in second quarter

16 Jul 2014

Stockholm-based telecoms group Tele2 has reported a 1% drop in second quarter net sales to SEK6.34 billion (USD944 million), with the decline attributed to a devaluation in Kazakhstan, lower handset sales, a slowdown in the fixed telephony business and higher call termination rates. On a more positive note, the group said mobile service revenue jumped 7% year-on-year to SEK3.09 billion, with increased mobile data usage offsetting falling voice and SMS messaging revenues. Although EBITDA dropped 1% to SEK1.47 billion, net profit rose from SEK369 million to SEK818 million. Its home market of Sweden still accounts for 49% of total sales, while the Netherlands brought in 21% of the total and Austria, Lithuania, Croatia and Kazakhstan each contributed around 5%. 73% of revenues comes from mobile services, while broadband accounts for 16%.

The group said it added 250,000 net new users in the three months to 30 June 2014, down from 312,000 additions in the same period last year, to reach 13.44 million. The mobile user base was up by a net 286,000 new customers to 11.88 million, with the rise mainly attributed to its operations in Kazakhstan, Croatia, the Netherlands and Germany. The fixed broadband total fell by 9,000 to 616,000, however, and the fixed telephony base dropped by 27,000 to 946,000.

The firm has revised its outlook for the full year following the recent divestment of its operations in Norway, reducing its sales forecast from SEK30 billion to around SEK25 billion, while EBITDA is expected to stand at between SEK5.7 billion-SEK5.8 billion, down from the earlier forecast of SEK6.0 billion. The group says it is now maximising its efforts to improve returns from fixed line services.

Sweden, Tele2

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