Telia Company reported a net loss of SEK 2.03 billion for the second quarter, compared to a profit of SEK 1.65 billion a year earlier, due to a loss on the sale of its stake in Turkcell. Revenues fell 5.9 percent on an underlying basis, as the Covid-19 pandemic impacted roaming, TV and advertising sales, while EBITDA was stable thanks to cost control efforts. Telia maintained its outlook for free cash flow and said it expects EBITDA in the second half of the year to be similar to the first six months.
Total revenues increased 2.7 percent to SEK 21.77 billion in Q2 due to the takeover of Bonnier Broadcasting. However, the broadcast business was hurt the most by the pandemic and related restrictions, which together wiped around SEK 1 billion off service revenues in the quarter, Telia said. CEO Alison Kirkby said service revenues were down 5.6 percent on a like-for-like basis, with traditional telecom revenues stable if the impact from Covid-19 is excluded.
The impact on EBITDA was an estimated SEK 0.5 billion from the pandemic. Adjusted EBITDA totaled SEK 7.74 billion in the quarter, up 3.6 percent on a reported basis and unchanged on a like-for-like basis. Over the first half of the year, EBITDA rose 0.9 percent to SEK 15.01 billion, and Telia said it expects a similar result in H2 on a constant currency basis.
The sale of Turkcell led to an extraordinary loss of SEK 3.49 billion in the quarter as Telia wrote down the book value of the holding. This resulted in losses both in operating and net profit. While this was largely a non-cash charge, the payment of the first installment for Champions League rights led to a 10 percent drop in operating cash flow, to SEK 2.20 billion in Q2. Capex was also down 10 percent, to SEK 3.45 billion.
Kirkby said the quarterly results were better than expected, but the company will face tougher comparisons in the second half of the year. It maintained a forecast for operating cash flow of SEK 9.5-10.5 billion over the full year, but refrained from announcing any additional dividends.
