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2016-07-20

Telia Company: TELIA COMPANY INTERIM REPORT JANUARY-JUNE 2016

EBITDA GROWTH AND STABLE REVENUES

Second 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, declined 1.0 percent. In reported currency, net sales
declined 2.0 percent to SEK 21,130 million (21,558). Service revenues
in local currencies, excluding acquisitions and disposals, declined
0.2 percent.

· EBITDA, excluding non-recurring items, increased 5.1 percent in
local currencies, excluding acquisitions and disposals. In reported
currency, EBITDA, excluding non-recurring items, increased 4.1
percent to SEK 6,389 million (6,136). The EBITDA margin, excluding
non-recurring items, rose to 30.2 percent (28.5).

· Operating income, excluding non-recurring items, grew 20.1 percent
to SEK 4,446 million (3,702).

· Total net income attributable to the owners of the parent fell
55.8 percent to SEK 1,439 million (3,258) and earnings per share to
SEK 0.33 (0.75), impacted by effects in discontinued operations.
Total net income rose 5.5 percent to SEK 3,902 million (3,698).

· Full year outlook is unchanged.
First half summary

· Net sales in local currencies, excluding acquisitions and
disposals, declined 1.0 percent. In reported currency, net sales
declined 1.5 percent to SEK 41,524 million (42,147). Service revenues
in local currencies, excluding acquisitions and disposals, declined
0.6 percent.

· Operating income, excluding non-recurring items, rose 19.6 percent
to SEK 8,644 million (7,228).

· Total net income attributable to the owners of the parent fell
25.4 percent to SEK 5,205 million (6,973) and earnings per share to
SEK 1.20 (1.61). Total net income rose 0.1 percent to SEK 7,812
million (7,808).

COMMENTS BY JOHAN DENNELIND,
PRESIDENT & CEO

"The Nordic and Baltic region is very much the cradle of
digitalization and has the potential to lead the way in the so called
4thindustrial revolution. As a New Generation Telco, Telia Company is
well positioned to thrive and drive societies where we operate to
take steps into the future, by bringing new and relevant services to
both enterprise customers and consumers. We are excited about these
opportunities!

While transforming the company we are focused on delivering solid
results in our core operations. In the second quarter, organic
service revenues were flat and EBITDA increased 5.1 percent
year-on-year, propelled by higher earnings in 7 out of 8 markets.

In Sweden, service revenue growth stayed positive in the consumer
segment, supported by our value loading strategy in mobile, together
with further progress in broadband and TV. The new social media
proposition launched in April generated good traction and contributed
to a positive mobile subscription intake in the quarter. The fiber
roll-out was further accelerated to meet pent up demand, particularly
in the single-dwelling unit area. We now reach more than 1.4 million
households, on track to our 1.9 million target by 2018. In the
enterprise segment, we saw further progress in the SME & SoHo area on
the back of our new service concept, but the challenging conditions
remained in the large & public business. We are continuously
broadening our ICT capabilities and aim to expand further via
partnerships and M&A to drive differentiation and increase customer
relevance.

We have put a lot of efforts in improving customer experience in
Finland following a period of network disturbances. The situation
stabilized in the quarter and mobile billed revenue growth was
sustained at 4 percent, supported by upsell activities and positive
net subscription intake. Performance in the Baltic region remained
encouraging and all three countries delivered EBITDA growth in the
quarter, backed by high customer demand for mobile data services.

In Norway, we continue to strengthen our customer proposition,
recently highlighted by Telia's top position in the biggest ever
independent test of Norwegian mobile networks. We now deliver 4G
high-speed mobile internet coverage to 98 percent of the country's
population, almost two and half years earlier than the regulatory
requirement.

In region Eurasia the remaining operations were still impacted by high
competition and negative currency effects but we see some early signs
of market stabilization.

In June, we hosted a capital market day reinforcing our strategic
priorities. We can see improvements in the market share development
and at the same time the execution of the growth and savings
initiatives continue and we are on track to reach the cost reduction
target of SEK 2 billion run-rate by the end of 2017.

In order to accelerate our efforts in areas close to the core, an
independent unit has been established to capture new revenue streams
and further develop existing and future partnerships.

We continue to optimize our portfolio in line with the ambition to
increase focus on our operations in the Nordic and Baltic regions and
new milestones have been reached in the past months. In June, we
announced the divestments of our mobile business Yoigo in Spain and
the non-core cash management operation Sergel. We continue to work
hard to solve our issues surrounding Uzbekistan and to responsibly
reduce our presence in region Eurasia.

Our performance has been solid in the first six months with good
EBITDA growth, but we are facing tougher year-on-year comparisons in
the second half of the year. As a result, we are reiterating the full
year 2016 outlook and foresee EBITDA on a comparable basis to be in
line or slightly above the level in 2015 for the continuing
operations. CAPEX excluding license and spectrum fees for the
continuing operations is expected to be SEK 14-15 billion."

QUESTIONS REGARDING THE REPORTS
Telia Company AB
www.teliacompany.com
Tel. +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 July 20, 2016.

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http://news.cision.com/telia-company/r/telia-company-interim-report-janu...
http://mb.cision.com/Main/40/2048729/542068.pdf

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