Tele2 Q4 sales, EBITDA up 5% on growth in Baltics, Kazakhstan

Friday 2 February 2018 | 08:31 CET | News

Tele2 reported fourth-quarter sales and EBITDA up 5 percent, to respectively SEK 6.64 billion and SEK 1.53 billion, led by growth in the Baltics and Kazakhstan and its takeover of TDC Sweden. The figures exclude its operations in Austria and the Netherlands, which are planned for sale, and based on this make-up, the operator forecast mid single-digit growth in mobile service revenue and a small increase in EBITDA in 2018. 

Over 2017, Tele2 posted 10 percent mobile service revenue growth to SEK 13.50 billion, ahead of its forecast for a high single-digit increase. EBITDA was in line with guidance, at an increase of 18 percent to SEK 6.41 billion. Including the discontinued activities in the Netherlands, Tele2 posted organic growth in mobile service revenue of 9 percent to SEK 15.56 billion, while EBITDA rose 23 percent on a comparable basis to SEK 6.79 billion. 

The increase in profits was supported by EUR 1 billion in cost reductions from the company's 'Challenger Program', as well as higher profitability in Kazakhstan and the Baltics. This was offset by a bad debt provision of SEK 89 million in Croatia in Q4. Net profit still increased strongly, to SEK 952 million in the fourth quarter from SEK 204 million a year ago, thanks a gain on deferred tax assets in Kazakhstan.

Tele2's operating cash flow improved to SEK 4.471 billion in the full year from SEK 3.09 billion in 2016. After a strong increase in the dividend to SEK 4 per share for 2017, the company said it expects shareholder returns to grow further after its merger with Com Hem.  Capex is forecast at SEK 2.1-2.4 billion in 2018, excluding the Netherlands, up from SEK 1.9 billion in 2017. 

Tele2 ended the year with 15.35 million customers, up slightly from 15.01 million a year ago. In the fourth quarter, the operator lost 32,000 customers, as seasonal effects in Sweden and Croatia led to a net loss of 12,000 mobile customers, fixed broadband subscribers fell by another 4,000, and fixed telephony customers were down by 16,000.