Tele2 reported higher sales and operating profit for the fourth quarter, driven by its takeover of TDC Sweden at the end of October. Revenues rose 18 percent to SEK 8.22 billion. On a like-for-like basis, sales were up 2 percent, led by a 6 percent increase in mobile service revenue to SEK 3.74 billion. EBITDA improved 9 percent to SEK 1.46 billion and was up 6 percent on a like-for-like basis.
Nevertheless, the bottom line was still in the red, at a loss of SEK 177 million versus a profit of SEK 45 million a year ago, due mainly to restructuring charges of SEK 154 million for the Challenger cost-reduction programme, as well as higher tax, depreciation and amortisation. Tele2 also posted a loss in the Netherlands, due to charges for a legal dispute.
Customer growth was negative in Q4, with a loss of 83,000. That includes a drop of 52,000 mobile subscribers, 8,000 less fixed broadband users and 23,000 fewer fixed telephony users. The total customer base amounted to 16.67 million, up from 14.41 million a year ago after adding around 200,000 customers from the takeover of TDC.
Tele2 declared a dividend of SEK 5.23 per share, which it says is a 10 percent increase compared to the previous year. It expects to lower the dividend to SEK 4.00 per share for this year and said it aims to cover all the dividend with equity free cash flow by 2019. It's also relaxing its balance sheet targets, now targeting a net debt ratio of 2.0-2.5x EBITDA compared to 1.5-2.0x previously.
Tele2 also forecast continued mid single-digit growth in mobile service revenue this year. Total sales are expected to grow to SEK 31-32 billion from SEK 28.3 billion in 2016, and EBITDA is estimated at 5.9-6.2 billion versus SEK 5.3 billion last year. Capital expenditure is expected flat to slightly higher, at SEK 3.8-4.1 billion.
