Telia Company reported fourth-quarter sales up 4.9 percent to SEK 22.21 billion, helped by its takeover of Get and TDC's activities in Norway from October. Service revenues in local currencies, excluding acquisitions and disposals, declined 2.5 percent, as market conditions remained difficult in its biggest market Sweden, offsetting growth in other countries. Adjusted EBITDA rose 3.3 percent to SEK 6.74 billion but was down 5.5 percent in local currencies, after adjusting for acquisitions and disposals.
The adjusted EBITDA margin fell to 30.3 percent from 30.8 percent a year ago, and adjusted operating income fell 18.7 percent to SEK 2.99 billion. The net result was a loss of SEK 1.58 billion, versus a profit of SEK 805 million a year ago, after writedowns for the divestments of Ucell and Kcell, which completed the exit of Telia's Eurasian activities.
Over the full year, Telia met its outlook for slightly higher adjusted EBITDA, with growth of 1 percent on an organic basis. This was driven by SEK 1.3 billion in cost reductions, better than the target of SEK 1.1 billion, which helped offset a 0.4 percent fall in organic revenues.
Net profit over the full year fell 70 percent to SEK 3.09 billion due to numerous one-off charges. Free cash flow still improved 66 percent to SEK 11.90 billion, and Telia kept its dividend unchanged at SEK 2.36 per share. The group also spent SEK 4.1 billion buying back shares in 2018.
For 2019, the company expects free cash flow from continuing operations, excluding licenses and spectrum fees and dividends from associated companies, to grow to SEK 12.0-12.5 billion from SEK 10.8 billion in 2018. Telia did not give an outlook for revenues or EBITDA, due to the pending implementation of IFRS 16 accounting rules. This changes the definition of operational free cash flow to include lease payments.
