CEO Allison Kirby (pictured) has just one more full quarter before departing for BT Group
The Swedish operator group Telia reported Q3 earnings that exceeded forecasts and raised the outlook for its full-year profits, sending shares up to a peak of 8%.
Telia’s earnings before depreciation and amortisation (EBITDA) adjusted for restructuring costs and other non-recurring items rose 10% to SEK8.5 billion (€732.03 million) from SEK7.7 billion a year earlier. Analysts had expected profits of SEK7.9 billion.
Core telco operations made a substantial contribution with service revenue growing by 3.9% year on year. In the last six out of seven quarters, service revenues have grown between 2% and 4%.
Revenues grew 20.4% in Lithuania, by 14.1% in Estonia, 11.4% in Finland and a 2.7% increase in Norway. They were lowest its domestic market of Sweden, growing by just 0.1%.
A better picture
Even its ailing TV business appears to be in better health, having struggled with lower than expected advertising revenues and historical commitments to content. It closed down its unprofitable streaming service, C More, and the launch of its hybrid TV4 Play service is imminent.
Outgoing CEO Allison Kirkby told Reuters issues around the TV service are still being addressed, but it seems the restructuring plan that the operator put in place to run from 2021 to 2025 is bearing fruit.
Kirkby commented, “In the third quarter, Telia’s growth accelerated to levels not seen in many years, with momentum in our telco operations more than compensating for the weak advertising market. With all telco markets now showing solid top- and bottom-line development, we are clearly progressing against our plans to build the Better Telia we envisaged for all our stakeholders, when we laid out our growth strategy almost three years ago.”
Working capital
Kirkby said the company would focus on the recovery of working capital would be the primary goal for the operator in Q4 and 2024.
The operator predicts that its adjusted EBITDA will be like for like growth in low, single-digits percentage in 2023 whereas its previous forecast was for flat to low single-digit growth.
Reuters quoted analyst Stefan Ward from Pareto Securities saying, “All in all the results are clearly satisfactory and lowers the risk in both earnings and cash flow expectations”.
Last week Telia Company’s board of directors announced Patrik Hofbauer would take over from Kirkby as President and CEO from 1 February, 2024. Kirkby is replacing Philip Jansen as CEO of BT Group. No doubt BT’s long-suffering shareholders hope she can repeat her success there.