TeliaSonera reported second-quarter sales up 8.5 percent year-on-year to SEK 21.1 billion, helped by its acquisition of Tele2 Norway and currency effects. Excluding currency effects, acquisitions and disposals, total sales increased 1.9 percent, while service revenues were down 1.3 percent, hurt by pressure in its home markets Sweden and Finland and difficulties in Kazakhstan. Adjusted EBITDA was up 4.0 percent on a reported basis but down 4.0 percent on an organic basis, to SEK 9.2 billion. The margin fell 33.9 percent from 35.4 a year ago.
Adjusted operating profit declined 7.6 percent to SEK 5.9 billion, and net profit was down 8.1 percent to SEK 3.3 billion. Free cash flow increased strongly to SEK 6.3 billion from SEK 2.5 billion, thanks to dividends of SEK 4.7 billion from Turkcell.
TeliaSonera said it expects the earnings trend to improve somewhat in the second half of the year and reiterated its full-year outlook for stable organic EBITDA. The forecast excludes expected synergies from the takeover in Norway, which TeliaSonera has now raised to SEK 1 billion from an earlier estimate of SEK 800 million. Of the total SEK 700 million should be realised by the end of next year. For this year, the company noted increased risks to performance in Eurasia, following the earthquake in Nepal, price pressure in Kazakhstan and prosecutor's investigation in Azerbaijan. The company maintain its forecast for capital expenditure of SEK 17 billion over the full year, excluding licence and spectrum fees, after spending SEK 8.3 billion in the first six months.
