Telia Company reported a sharp fall in net profit for the fourth quarter, as the Swedish operator wrote down its holdings in Eurasia. The company took total impairment charges of SEK 3.850 billion on Azercell, Geocell, Ucell and Moldcell, leading to net profit of SEK 754 million for Q4, down from SEK 7.338 billion a year ago when it booked a profit on the sale of Spanish operator Yoigo. Separately, Telia announced a deal to sell its stake in Geocell.
Telia's net sales improved to growth of 0.3 percent year-on-year, to SEK 21.187 billion. In local currencies, excluding acquisitions and disposals, sales were still down 0.3 percent, and service revenues fell 2.3 percent.
Adjusted EBITDA rose 3.3 percent to SEK 6.590 billion and was up 3.8 percent on organic basis, helping the company meet its forecast for a largely flat full-year result. Telia said EBITDA was up 7 percent in Q4 excluding one-time fibre installation fees, driven by a 6 percent reduction in operating costs in Sweden.
The company reiterated a target to reduce net costs by a total of SEK 1.1 billion by the end of this year. This should allow adjusted EBITDA from continuing operations to remain at the same level or slightly higher in 2018.
Income from associated companies and joint ventures improved to SEK 3.174 billion in Q4 from SEK 424 million a year ago, thanks to the sale of 6.2 percent in MegaFon.
Telia's operating free cash flow was up 76 percent to SEK 9.687 billion in 2017, beating the company's forecast. This was helped by efforts to reduce cash capex and improve working capital, which were coming through earlier than expected, said CEO Johan Dennelind. Telia aims to maintain the same level of cash flow in 2018 and grow the amount in the following years.
The strong increase in cash flow supports a 15 percent in the dividend to SEK 2.30 per share. Telia aims to pay a dividend at the same level in 2018.
