Tele2 has revised its full-year financial guidance slightly upwards as it reported a 2 percent year-on-year rise in end-user service revenue in the second quarter of 2021 to SEK 4.82 billion on an organic basis. It attributed this to a “strong performance” in the Baltic region and stabilisation in Sweden. Revenue increased by 1 percent to SEK 6.57 billion and underlying EBITDAaL swelled by 8 percent to SEK 2.37 billion thanks to its Baltic performance, cost savings, lower commercial spending and weaker pandemic headwind.
Net profit from total operations grew by SEK 500 million to SEK 1.37 billion year on year. Equity free cash flow from continuing operations went up to SEK 1.27 billion from SEK 974 million. Over the last twelve months, SEK 4.7 billion was generated, equivalent to roughly SEK 6.8 per share.
Baltic revenue improved by 13 percent year on year in the second quarter to SEK 806 million from SEK 749 million, driven both by volume growth and by strong ASPU (Average Spend Per User) growth through price adjustments and upselling.
Tele2 now says it expects full-year flat to low single-digit EUSR growth, up from flat previously. It now foresees mid-single-digit growth in underlying EBITDAaL, compared with its previous prediction of 2-4 percent growth. It has left unchanged its forecast for capex excluding spectrum and leasing assets at between SEK 2.8 billion and SEK 3.3 billion.
Tele2 Sweden’s second quarter EUSR was unchanged year on year at SEK 4.01 billion. Underlying EBITDAaL climbed 7 percent to SEK 1.91 billion from SEK 1.78 billion a year earlier, thanks to its business transformation programme, lower commercial spending and fewer headwinds related to the pandemic, such as flattening roaming income. Capex excluding spectrum and leases increased by SEK 67 million to SEK 662 million, mainly caused by 5G network investments and IT spending for its business transformation programme.
As Tele2 Sweden consolidated the Com Hem and Tele2 brands into one convergent consumer brand, its fixed-mobile converged (FMC) customer base increased from 285,000 customers in Q1 2021 to 310,000 customers, or 12 percent of the total. Net intake in Digital TV was negative with 19,000 RGUs, primarily driven by a database adjustment of 9,300 non-active RGUs in the quarter. Mobile postpaid and fixed broadband price adjustments done in spring started to have an effect in Q2, with the full effect on ASPU expected in Q3 2021.
Swedish consumer revenue dipped by 2 percent to SEK 3.64 billion year on year in the second quarter with EUSR rising 1 percent to SEK 3.05 billion. Landlord and Other revenue fell 4 percent year on year to SEK 168 million. Mobile ASPU was 2 percent higher year on year at SEK 162 compared with SEK 159 in Q2 2020. Consumer mobile revenue improved by 2 percent to SEK 1.43 billion as the number of mobile RGUs grew by 12,000 to 2.94 million on 30 June from 2.93 million on 31 March.
Consumer fixed revenue was flat at SEK 1.45 billion as the number of fixed service RGUs fell by 24,000 to 2.08 million from 2.10 million on 31 March. Consumer fixed ASPU was 3 percent higher year on year at SEK 232 million. The addressable fixed consumer footprint slipped by 5,000 to 3.51 million from 3.52 million at the end of the first quarter. Fixed broadband customers increased to 920,000 on 30 June from 916,000 on 31 March.
Swedish business mobile RGUs, excluding IoT, increased to 974,000 from 964,000 at the end of the first quarter. ASPU fell by 6 percent to SEK 133 from SEK 142. Swedish business revenue dropped 2 percent year on year to SEK 1.38 billion from SEK 1.41 billion with EUSR falling to SEK 962 million from SEK 980 million.
