Tele2 Q3 grows revenues but profit hit by Dutch impairment

News General Europe 20 OCT 2016
Tele2 Q3 grows revenues but profit hit by Dutch impairment

Tele2 reported third-quarter revenues up slightly to SEK 6.961 billion from 6.791 billion the year before, driven by growth in Sweden, the Netherlands, Kazakhstan and the Baltics. Group mobile end-user service revenue lifted 6 percent, with record revenue in Sweden. Group EBITDA slid to SEK 1.562 billion from 1.599 billion, with the margin off to 22 percent from 24 percent, affected by costs associated with the commercial push in the Netherlands following the launch of LTE there.

The net result went to a loss of SEK 2.266 billion from a gain of 397 million, hit by an impairment of goodwill in the Netherlands. The company said Sweden delivered a record mobile end-user service revenue, while the Baltics continued to grow mobile end-user service revenue with sustained margins. The Netherlands witnessed double digit growth of mobile end-user service revenue.

Free cash flow moved to a positive SEK 838 million from 169 million a year ago, while capex went lower to SEK 779 million from 932 million. The decline was mainly attributed to Sweden.

Net customer intake amounted to 168,000 customers in Q3, for a total 16.549 million at the end of September. Growth was led by mobile services, which added 197,000 subscribers, mainly in Sweden, the Netherlands, Croatia and Lithuania. As expected, the number of fixed telephony customers fell by 27,000.

For the full year, Tele2 is still guiding for mobile end-user service revenue growth in the mid single digits, with net revenues seen at SEK 26-27 billion, EBITDA at SEK 4.6-5.0 billion and capex at SEK 3.7-4.1 billion. The company said it remains committed to its three-year progressive dividend policy, saying it will deliver a 10 percent higher absolute dividend pay-out from the year before at SEK 2.389 billion.

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