TeliaSonera to cut 2,000 jobs as profit declines

TeliaSonera saw its third quarter (Q3) net sales decrease 3.2 per cent to SEK 25.842 billion in reported currency and remain unchanged in local currencies and excluding acquisitions. The addressable cost base in local currencies and excluding acquisitions increased 4.2 per cent. In reported currency, the addressable cost base increased 0.4 per cent to SEK 7.153 billion.

EBITDA, excluding non-recurring items, decreased by four per cent in local currencies and excluding acquisitions. In reported currency, EBITDA, excluding non-recurring items, fell by 6.3 per cent to SEK 9.255 billion. The EBITDA margin, excluding non-recurring items, decreased to 35.8 percent from 37 per cent.

Operating income, excluding non-recurring items, decreased by 4.2 per cent to SEK 7.676 billion. Net income attributable to the owners of the parent company decreased by 1.2 per cent to SEK 4.803 billion and earnings per share declined slightly to SEK 1.11 from SEK 1.12. Free cash flow decreased to SEK 3.825 billion from SEK 4.776 billion, mainly due to lower EBITDA and changes in working capital.

During the quarter, the number of subscriptions grew by four million in the consolidated operations and by 1.4 million in the associated companies. The total number of subscriptions was 180 million. The Group outlook for 2012 remains unchanged.

Commenting on the results, president and chief executive Lars Nyberg said the group's customer base is growing at a higher rate than its revenues and the group has to reverse this trend. He added that the group's ambition is to fundamentally change its business by simplifying its way of working. The group estimates this will lead to a cost reduction of some SEK 2 billion net over the coming two years. It will also include personnel reductions and the group's initial estimate is that it will affect approximately 2,000 employees or seven per cent of the total workforce in the group