TeliaSonera fourth quarter net profit up by 35 per cent, organic sales rise by 1.8 per cent

TeliaSonera reported a strong improvement in net profit and cash flow for the fourth quarter, while underlying sales growth was better than its earlier guidance. Net profit jumped by 34.9 per cent to SEK 6.88 billion, helped by a profit from selling shares in the Megafon IPO, and free cash flow surged to SEK 2.93 billion from SEK 552 million a year earlier, thanks to lower capex and changes in working capital. 

Adjusted EBITDA was still down by 3.2 per cent to SEK 8.97 billion, and revenues fell by 0.7 per cent to SEK 27.07 billion. Excluding currency effects and acquisitions, quarterly sales were up by 1.8 per cent and EBITDA was down by 0.6 per cent. Organic revenue growth was 1.3 per cent in mobile services and 16.3 per cent in Eurasia, while sales fell by 2.7 per cent in broadband services. 

TeliaSonera said all countries in Eurasia returned to positive revenue growth in the fourth quarter, while its mobile division benefited from higher equipment sales and better trends in service revenues in several markets. At the broadband division, growth in the fibre customer base accelerated towards the end of the year and customer satisfaction improved. Over the full year, organic revenue growth reached 1.2 per cent, better than the operator's outlook of flat to one  per cent higher. 

TeliaSonera added 1.7 million new subscriptions in the last three months of the year, plus 2.3 million new subscribers at associated companies, for a total customer base of 183.0 million at end-2012. The company maintained its dividend at SEK 2.85 per share. 

For 2013, the company forecast revenues in local currencies at the same level as last year and a small improvement in the adjusted EBITDA margin, helped by the ongoing restructuring announced last October.
TeliaSonera said it achieved around SEK 200 million in cost savings in fourth quarter, out of a targeted SEK 2 billion by the end of 2014. Capex is estimated at about 14 per cent of revenues in 2013, excluding licence and spectrum fees, after 14.6 per cent in 2012.