Telia Company said it has agreed to sell 49 percent of its Swedish tower business to Brookfield and Alecta for SEK 5.50 billion, after a similar deal last year for its Finnish and Norwegian towers. The proceeds would be transferred to shareholders. Separately, it reported fourth quarter figures, with revenue up slightly on a like-for-like basis and with positive net earnings following a loss in Q4 2020, and is proposing a higher dividend for 2021.
The operator said Q4 net sales declined by 0.4 percent year on year to SEK 23.38 billion, but were up 3.3 percent on a like-for-like basis. Service revenues fell 1.7 percent to SEK 19.42 billion but rose 2.9 percent on a like-for-like basis.
Adjusted EBITDA dropped 1.6 percent to SEK 7.29 billion year on year but was unchanged on a like-for-like basis. Total net profit was SEK 1.19 billion after a SEK 24.47 billion loss in Q4 2020. Earnings per share was positive at SEK 0.27 compared with negative EPS of SEK 5.99 the year before.
Telia’s agreement to sell 49 percent of the Swedish tower business to Brookfield and Alecta corresponds to an enterprise value for 100 percent of SEK 11.22 billion on a cash and debt-free basis, and equals 28.2 times normalised FY 2021 EBITDA. The total cash proceeds should be SEK 5.50 billion. Once the transaction closes in Q3 2022, Telia means to transfer the net proceeds to shareholders via share buy-backs or an extraordinary dividend. The deal covers 3,800 network sites with total pro-forma revenue of SEK 649 million and normalised EBITDA pre-IFRS 16 of SEK 398 million in 2021.
Telia said the Q4 service revenue growth of 3 percent was supported by Sweden, the Baltic countries, and its TV & Media business. Structural cost cuts continued but as it absorbed a full quarter of premium sports rights, EBITDA remained unchanged. The core telecoms business, excluding the TV & Media unit, lifted EBITDA by 3 percent. Sweden and the Baltic countries had a stable customer base and rising ARPUs in every main segment. Swedish customer intake for fibre broadband and IPTV have been positive for seven consecutive quarters, and ARPUs are rising.
Estonia and Lithuania had high-single digit growth in service revenue, driven by both mobile and fixed services and in both the consumer and enterprise segments. Norwegian service revenue growth was 2.6 percent despite the drag from the wholesale business. Finnish service revenue declined 2.8 percent but positive trends are starting, with a value-oriented strategy and 5G migrations enabling a small increase in consumer post-paid ARPU. However, higher energy costs offset the benefits from digital transformation. In Denmark, service revenue was stable but EBITDA declined, mainly because of higher energy costs.
For 2021, the board of directors proposes an ordinary dividend of SEK 2.05 per share, up from SEK 2.00 for 2020. Looking ahead, Telia said FY 2022 service revenues and adjusted EBITDA are expected to rise by a low single digit on a like for like basis. Cash capital expenditure, excluding fees for licenses and spectrum, is estimated to be in the range of SEK 14.0-15.0 billion. This compares with SEK 15.65 billion in FY 2021. Telia aims for cash CAPEX without licence and spectrum fees to return to around 15 percent of net sales by 2023.
