Oct. 17 (Bloomberg) -- TeliaSonera AB, Sweden’s biggest phone company, reported a 15 percent increase in third-quarter profit as restructuring efforts and gains in its Eurasian operations helped offset declining revenue. The stock rose.
Net income increased to 4.64 billion kronor ($717 million) from 4.03 billion kronor a year earlier, the company said today. Analysts predicted 4.33 billion kronor, the average of estimates compiled by Bloomberg. Sales dropped 1.8 percent to 25.4 billion kronor, topping the average estimate of 25.1 billion kronor.
TeliaSonera is adding users in its Eurasian unit, with operations in Turkey, Russia and several former Soviet Union countries, while managing declining sales in its home market as competition and lower fees hurt prices. The Stockholm-based company, which made more than 60 percent of its revenue in the Nordic region last year, is also cutting jobs and focusing more on data revenue to boost profitability.
“The results were good with the Ebitda in Eurasia and in mobility services beating my estimates,” said Mikko Ervasti, an analyst at Evli Bank in Helsinki. “Telia also kept its guidance which shows they are well diversified despite European macroeconomic issues.”
TeliaSonera reiterated its full-year forecasts. It is predicting that its adjusted earnings margin will improve “slightly” and that sales will be “flat” excluding currency swings and acquisitions.
TeliaSonera rose 3.6 percent to 51.35 kronor at 10:56 a.m. in Stockholm, giving the former Swedish telephone monopoly a market value of 223 billion kronor. The stock had added 12 percent this year through yesterday.
Earnings before interest, taxes, depreciation and amortization rose 1.5 percent to 9.42 billion kronor, as costs including production, selling and administrative expenses declined 3.2 percent to 19.3 billion kronor. Ebitda as a percentage of sales widened to 37.1 percent from 35.9 percent.
Its mobile business boosted Ebitda 4.8 percent to 3.83 billion kronor, even as sales dropped 2.1 percent to 12.2 billion kronor because of lower rates from connecting calls from rivals’ networks, a fee that is regulated. Evli’s Ervasti projected Ebitda of 3.7 billion kronor.
“Revenues continued to be impacted by difficult economic environment,” Johan Dennelind, who took over as chief executive officer last month, said in the statement. “It is crucial to have an efficient organization and an appropriate cost base.”
In Eurasia, the Ebitda of 2.85 billion kronor exceeded Ervasti’s projection of 2.6 billion kronor. Revenue in the region climbed 3.1 percent to 5.29 billion kronor.
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