Tele2 reported a strong increase in first-quarter results, driven by its growth markets the Netherlands and Kazakhstan as well as solid growth in Sweden and the Baltics. Net sales rose 22 percent to SEK 7.875 billion, and EBITDA increased 41 percent to SEK 1.723 billion, giving an EBITDA margin of 22 percent.
On a pro forma basis for the acquisitions of TDC Sweden and Altel in Kazakhstan, sales rose 3 percent, mobile service revenues were up 10 percent, and EBITDA increased 28 percent. The company also benefited from SEK 53 million in sales and SEK 95 million EBITDA from the revaluation of handset receivables in the Netherlands and a settlement in its fixed broadband business.
Tele2's net profit rose 18 percent to SEK 401 million, and operating cash flow more than doubled year-on-year to SEK 2.527 billion a 12-month rolling basis. This follows capex halving to SEK 627 million from SEK 1.154 billion as the company completed its new mobile network in the Netherlands.
The customer base still fell by 37,000 in the three months, compared to a loss of 9,000 a year earlier, for a total 16.629 million. The net intake in mobile services amounted to just 3,000 (+43,000 a year ago). The net decline was due to a loss of 13,000 fixed broadband customers and 27,000 fixed telephony subscribers.
Tele2 maintained its outlook for full-year mobile service revenue to grow in the mid-single digits and total sales of SEK 31-32 billion in 2017. EBITDA is forecast to grow to SEK5.9-6.2 billion and capex to reach SEK 3.8-4.1 billion. The outlook includes an expected negative impact from the cut to EU roaming prices in the second half.
