TDC has reported lower revenues and profits in the third quarter as it increased capital expenditure by 35 percent year on year to over DKK 1 billion, driven by fibre deployments and 5G preparations. TDC passed 15,000 new addresses by fibre during Q3. As expected, EBITDA was affected by the higher investments and costs related to the reorganisation of TDC.
CFO Lasse Pilgaard said he is proud that the expansion of TDC’s investments in digitisation are starting to bear fruit. He said TDC is progressing towards its strategic milestones while maintaining good commercial momentum this quarter, preparing it for the future.
Revenue in the third quarter fell by 3.2 percent on an organic basis or 2.8 percent on a reported basis to DKK 4.22 billion from DKK 3.34 billion. Gross profit fell to DKK 3.01 billion from DKK 3.09 billion a year earlier, as rises in mobile and broadband were offset by declines in television and fixed line operations. ARPU rose for broadband, TV and retail mobile telephony.
Organic EBITDA declined by 3.6 percent, which is in line with the operator’s FY expectations. On a reported basis, EBITDA slipped by 0.1 percent to DKK 1.66 billion, but was down 6.4 percent excluding IFRS 16. The EBITDA margin widened to 39.3 percent from 38.2 percent a year earlier.
Net profit dropped by 62.8 percent to DKK 97 million from DKK 261 million. Total comprehensive income tumbled to DKK 325 million from DKK 613 million.
Consumer revenue edged up by DKK 4 million year on year to DKK 2.75 billion in the third quarter, with consumer mobile service revenue rising to DKK 802 million from DKK 775 million a year earlier, landline voice shrinking to DKK 122 million from DKK 146 million, internet and network revenue improving to DKK 655 million from DKK 612 million, but television revenue eroding to DKK 967 million from DKK 987 million. Consumer EBITDA decreased to DKK 1.45 billion from DKK 1.51 billion in Q3 2018.
Business segment revenue fell to DKK 1.01 billion from DKK 1.04 billion in the third quarter last year. Corporate mobile services revenue dipped by DKK 4 million to DKK 283 million, landline voice revenue fell to DKK 140 million from DKK 170 million, internet and network revenue declined to DKK 291 million from DKK 315 million, but Other service revenue rose to DKK 285 million from DKK 262 million last time. Corporate segment EBITDA narrowed to DKK 552 million from 584 million.
In the wholesale division, mobility services revenue improved to DKK 150 million from DKK 141 million, landline voice revenue fell to DKK 29 million from DKK 36 million, and internet and network revenue declined to DKK 206 million from DKK 221 million last year. Wholesale EBITDA dipped to DKK 258 million from DKK 260 million a year earlier.
Consumer internet and network ARPU rose by DKK 11 year on year to DKK 208 monthly in the third quarter thanks to price increases and speed upgrades. Business internet and network ARPU edged up by DKK 1 to DKK 280. Consumer internet and network RGUs declined by 11,000 from the second quarter to 1.11 million, driven by the loss of low-speed copper customers. Corporate RGUs dropped by 2,000 over the quarter to 136,000 internet and network customers, in line with the trend.
In mobility services, consumer ARPU improved by DKK 2 year on year to DKK 126, shrugging off the effects of EU international call regulation. TDC shed 8,000 retail mobility customers over the quarter after the price increases on 01 July, leaving it with 1.93 million consumer mobile customers. Corporate mobility ARPU fell by DKK 4 year on year to DKK 97. Corporate mobility RGUs rose by 1,000 since 30 June to 840,000.
Television ARPU went up by DKK 6 year on year to DKK 267 but TV RGUs fell by 19,000 from Q2 to just below 1.20 million.
Turning to landline voice services, TDC said consumer ARPU fell by DKK 5 year on year to DKK 119 as traffic fell. Consumer landline voice RGUs shrank by 12,000 over the quarter to 350,000, on par with the market trend. Business landline voice ARPU declined by DKK 12 year on year to DKK 307 and corporate landline RGUs dropped by 4,000 quarter on quarter to 150,000.
