TeliaSonera reported third-quarter revenues down 1.0 percent to SEK 26.61 billion, while adjusted EBITDA rose 0.5 percent to SEK 9.80 billion, thanks to lower costs. The EBITDA margin improved half a percentage point to 36.8 percent. Excluding currency and acquisition effects, the operator's sales rose 2.4 percent from a year earlier and EBITDA was up 4.0 percent, driven by its mobile and Eurasia operations. TeliaSonera said it still expects full-year organic sales to grow around 3 percent, while costs will increase more slowly. In the first nine months of the year, organic sales rose 2.7 percent. The company reported lower earnings for the third quarter, of SEK 7.80 billion or SEK 1.12 per share, down from SEK 8.60 billion or SEK 1.33 a year ago, due to lower income from associate companies including an impairment on the Belarus operations. Free cash flow still improved, to SEK 5.11 billion from SEK 3.86 billion. The customer base rose by 1.3 million in the consolidated operations and by 3.7 million in the associated companies, to a total 164.4 million subscriptions. TeliaSonera maintained its outlook for capex 13-14 percent of revenues this year, excluding spectrum and licence acquisitions. The figure was 14.5 percent in the first nine months of the year, or a total SEK 11.19 billion in spending.
At the company's mobile activities, sales rose 1 percent to SEK 13.14 billion and were up 2.7 percent on an organic basis. Lower equipment sales were offset by strong data demand, helped by new price plans and roaming offers across the operator's footprint. Sales growth was strongest in Spain, up 22 percent to SEK 2.06 billion, and Sweden, up 6 percent to SEK 4.08 billion, while most other countries were lower. Mobile EBITDA improved 6.5 percent to SEK 4.18 billion, giving a margin of 31.8 percent. EBITDA improved in Sweden and Finland, and Yoigo in Spain moved to a profit of SEK 74 million. Mobile capex was up 31 percent from a year ago to SEK 955 million, while the customer base grew by just 100,000 compared to the end of June, to a total 19.2 million.
In the fixed-line market, revenues fell 6.3 percent to SEK 9.16 billion. In Sweden, sales dropped 4.8 percent to SEK 4.21 billion, and in Finland revenues were down 7.4 percent in local currency to the equivalent of SEK 1.33 billion. Both countries suffered from double-digit declines in traditional fixed telephony, while newer IP services only grew in single digits. Sales were also down in Norway, but improved in Denmark and Estonia. EBITDA for the fixed-line activities fell 6.2 percent to SEK 3.12 billion, and capex rose 35 percent to SEK 1.45 billion on the expansion in fibre services. Already 20 percent of its 2.5 million broadband customers in the Nordic and Baltic regions are connected by fibre, and TeliaSonera maintained its target to connect 2.3 million by the end of 2014. Net subscriber additions totaled 30,000 in broadband in the quarter, and the operator added 32,000 new TV customers for a total 1.1 million. Fixed voice subscriptions fell by 104,000 to 4.4 million.
At the Eurasia activities, revenues rose 4.7 percent to SEK 4.61 billion, led by Kazakhstan and Nepal. EBITDA was up 4.3 percent to SEK 2.38 billion, excluding one-time items. The number of subscriptions in the consolidated operations increased
by 1.2 million in the quarter to a total 32.8 million. Nepal, Kazakhstan and Tajikistan showed the largest rises with increases of 0.6 million, 0.4 million and 0.1 million subscriptions, respectively. Income from associated companies fell 32 percent to SEK 1.38 billion, due to lower results at Megafon in Russia and an impairment charge for the currency devaluation in Belarus.
