Quarterly revenues fell 6.3 percent to SEK 19.801 billion and were down 0.4 percent on an organic basis and excluding currency effects. Organic service revenues fell 0.6 percent.
Adjusted EBITDA dropped 4.6 percent to SEK 6.095 billion, while the margin was still up to 30.8 percent from 30.2 a year ago. The net result was a loss of SEK 308 million compared to a profit of SEK 3.902 billion a year earlier, due to a number of one-time charges, as signaled by the company a week ago.
Telia CEO Johan Dennelind said the company started cost-cutting measures in the quarter in order to improve EBITDA. This will lead to an around 3 percent reduction in the workforce, or 850 job cuts, most of which will come in Sweden. The initiatives are expected to reduce costs already in the second half of 2017, by around 5 percent year-on-year in Sweden. Medium-term structural initiatives are also underway to drive further cost reductions supporting EBITDA in 2018 and 2019. This should result in at least 3 percent lower costs in 2018.
Dennelined said the ambition is to grow operational free cash flow every year in order to support a growing dividend. The group now expects free cash flow from continuing operations, excluding licenses and dividends from associated companies, to be over SEK 7.5 billion in 2017, up from a previous estimate of SEK 7.0 billion. The associates are also expected to contribute SEK 2.8 billion, helping to maintain the dividend at the same level as 2016. The forecast for adjusted EBITDA in 2017 remains a result in line with 2016.
The CEO added that the company's "best estimate" for selling its Eurasian assets remains during 2017. Telia is also still in talks with US and Dutch authorities on settling their investigations into corruption in Uzbekistan, and Dennelind said the company is "hopeful that we will be able to achieve it soon". There is no need to adjust the provision already taken for the settlement, he added.
