Tele2 quarterly EBITDA falls 22%, sales up 1%

Nieuws Algemeen Europa 21 JUL 2016
Tele2 quarterly EBITDA falls 22%, sales up 1%
Tele2 reported a drop in second-quarter profits as the company increased commercial spending in an effort to accelerate sales in its largest markets, Sweden and the Netherlands. While revenues rose slightly to SEK 6.668 billion from SEK 6.611 billion a year ago, EBITDA dropped to SEK 1.087 billion from SEK 1.393 billion. The margin dropped to 16 percent from 21 percent a year ago. 

After SEK 95 million in restructuring charges and a higher tax bill, Tele2 posted a net loss of SEK 60 million from the quarter, versus a profit of SEK 309 million a year ago. Free cash flow moved to a positive 139 million from a negative SEK 268 million a year ago, as capital expenditure dropped to SEK 820 million from SEK 1.134 billion. The drop in capex comes as the roll-out of the 4G network in the Netherlands is nearing completion, with over 97 percent population coverage. 

Tele2 said customer growth was strong in the Netherlands in Q2, helped by its launch of the iPhone and Sim-only deals. Sweden also did well in the consumer postpaid business, but continues to suffer in the business market, something the recent acquisition of TDC's enterprise business is expected to help. Tele2 said it's also on track with its Challenger efficiency programme and the targeted SEK 1 billion in cost savings for 2018. The Dutch and Swedish organisations now have a shared platform some services, and a new back-office centre has started work in India. 

Net customer intake amounted to 165,000 customers in Q2, for a total 16.381 million at the end of June. Growth was led by mobile services, which added 196,000 subscribers, mainly in Kazakhstan and the Netherlands. The fixed broadband customer base decreased by 5,000, and fixed telephony customers fell by 26,000.

Tele2 maintained its outlook for mobile end-user service revenue growth in the mid single digits in 2016, after 2 percent growth in Q2. Total sales this year are estimated at SEK 26-27 billion, annual EBITDA at SEK 4.6-5.0 billion, and capex at SEK 3.7-4.1 billion.

Categories:

Algemeen

Companies:

TDC,  Tele2

Regions:

Europa

Tags:

Voice services, Data services, Financial figures, Internet Access

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