Tele2 reported second-quarter sales down 1 percent from a year earlier to SEK 6.343 billion. Revenues were hurt by fewer fixed-line customers and cuts to termination rates, offsetting a 7 percent increase in mobile service revenue, driven by demand for data services. Excluding exchange rate effects, revenue fell 3 percent.
EBITDA was also down 1 percent, to SEK 1.466 billion. This included a positive SEK 48 million from a regulatory settlement in the Netherlands. Net profit jumped to SEK 818 million from SEK 369 million, helped by a valuation gain of 363 million on a put option on its Kazakhstan operation, after the local currency was devalued and Tele2 provided additional financing.
Tele2 added a net 250,000 new customers in the quarter, for a total 13.439 million at the end of June. This included a gain of 286,000 mobile users, led by continued growth in Kazakhstan, Croatia and the Netherlands. It lost 9,000 fixed broadband customers, primarily in Sweden, but reported a turnaround in the Dutch market. The decline in fixed telephony slowed to 27,000 customers lost.
Following the recently announced sale of its Norwegian activities, Tele2 updated its full-year guidance. The sales forecast was cut to SEK 24.8-25.2 billion from SEK 30.0 billion, impacted also by the currency devaluation in Kazakhstan and lower handset sales. EBITDA was reduced to SEK 5.7-5.8 billion from SEK 6.0 billion, and capex is estimated at SEK 3.5-3.8 billion versus SEK 4.5 billion previously.
The company said it will concentrate on maximising the return from its fixed business, while building out its mobile business to drive group growth. The mobile business is focused on expansion in Kazakhstan and the Netherlands, to build a profitable business similar to the data-centric model in the company's home market Sweden.
