TeliaSonera lowered its outlook for full-year sales growth to 3 percent growth, after reporting weaker than expected first-quarter revenues. The operator previously forecast revenue growth, excluding currency effects and acquisitions, of 4 percent this year. The underlying sales growth was 2.5 percent in the first quarter, while reported sales fell 5.6 percent to SEK 24.74 billion. TeliaSonera said some of its Nordic mobile markets showed lower growth than in previous quarters as a result of regulatory effects, less handset sales and somewhat lower service revenues. The Baltic countries were still awaiting an economic recovery, and in Spain, Yoigo was hurt by lower handset sales as well as lower usage in the weak economy. Subscriber numbers rose by 2.1 million in the consolidated operations but fell by 1.2 million at associates, for a total 158 million at the end of March. EBITDA, excluding non-recurring items, increased 5.3 percent in local currencies and excluding acquisitions, but was down 1.5 percent on a reported basis to SEK 8.81 billion. The adjusted EBITDA margin rose to 35.6 percent from 34.2 a year earlier, mainly due to improving results at Yoigo. The company said it still expects an improvement in the full-year EBITDA margin, as cost reductions should have an effect from the second half of the year. TeliaSonera reported net profit of SEK 4.64 billion for Q1, down 1.6 percent year-on-year, while free cash flow dropped to SEK 2.59 billion from SEK 3.37 billion due to higher taxes paid. Capex increased to SEK 3.71 billion from SEK 2.05 billion a year ago, due mainly to the acquisition of an 800MHz licence in Sweden.
TeliaSonera's mobile activities reported sales down 3 percent to SEK 12.0 billion, hurt by negative currency effects. Excluding this and the impact of acquisitions, sales rose 4.6 percent. Revenues were up 5.3 percent in Sweden, thanks to continued demand for mobile data services, while revenues in Finland were up just 0.3 percent after a cut in termination rates in December. In Norway revenues were up 3.0 percent thanks to higher equipment, data and wholesale revenues, while Yoigo posted a 39 percent jump in sales on strong subscriber intake. Sales were down 7.0 percent in Denmark, hurt by regulatory effects, and revenues were also lower in all the Baltic countries. Mobile susbcribers rose by 0.3 million in the three months to a total 18.7 million at end-March. Adjusted EBITDA from mobile rose 3 percent to SEK 3.7 billion, and the margin improved to 30.6 percent from 28.8 a year ago, led by improvement in Sweden and a move to profit in Spain.
At the fixed-line activities, revenues tumbled 10.8 percent to SEK 9.0 billion, and EBITDA declined 12 percent to SEK 3.1 billion. Revenues fell 5.7 percent in Sweden as growth in IP services slowed, Finland sales were down 3.1 percent, and Norway sales dropped 10.9 percent amid high churn in the consumer segment. Broadband subscribers rose by 13,000 in the quarter to 2.4 million, and TV customers passed the 1 million market, up by 54,000 from December. Fixed lines fell by 72,000 in the three months to 4.2 million, while VoIP subscribers rose by 50,000 to 424,000.
At the company's activities in Eurasia, organic growth improved further in Q1 and the number of subscribers passed 30 million. Revenues rose 9 percent to SEK 3.9 billion, and were up 21.6 percent on an organic basis. Adjusted EBITDA increased 13 percent to SEK 2.0 billion. Including income from the holdings in Turkcell and Megafon, operating profit improved 6 percent to SEK 2.9 billion.
