TeliaSonera Forecasts Stagnant Sales as Dividend Misses Estimate

TeliaSonera AB’s proposed dividend missed estimates after Sweden’s biggest phone company reported lower fourth-quarter sales as growth in Russia and Turkey didn’t offset declines in countries including Finland and Norway.

Sales in the quarter slipped 0.7 percent to 27.1 billion kronor ($4.27 billion), the Stockholm-based company said in a statement today. The proposed dividend for 2012 is 2.85 kronor a share, unchanged from 2011 and less than a Bloomberg estimate of

3.05 kronor. Revenue in local currencies this year will be level with 2012 sales, TeliaSonera said.

“We believe 2013 will continue to be difficult given a lack of growth, potential management change and the difficulties in offering dividend growth at a time when political risk is high,” Keval Khiroya, a London-based analyst at Deutsche Bank AG, said in a note.

TeliaSonera, which made more than 60 percent of its revenue in the Nordic region last year, is battling slowing growth in home markets amid rising competition. The carrier is reducing costs to become more profitable as it focuses on data revenue rather than voice traffic, while robust growth in its Eurasian unit, with operations in Turkey, Russia and several former Soviet Union countries, continues to bolster earnings.

TeliaSonera shares fell as much as 2.7 percent, the biggest intraday drop since Sept. 20. The stock was down 0.9 percent at

45.28 kronor as of 11:48 a.m. in Stockholm.

Improving Margin

The fourth-quarter adjusted margin on earnings before interest, taxes, depreciation and amortization was 33.2 percent. The adjusted margin will improve “somewhat” in 2013 compared with the 34.4 percent for the full year of 2012, the company said today.

Net income rose 35 percent to 6.88 billion kronor in the last three months of 2012.

“Trends improved in the fourth quarter,” Chief Executive Officer Lars Nyberg said in the statement. “All countries in Eurasia are again delivering positive revenue growth.”

TeliaSonera has hired law firm Mannheimer Swartling to investigate accusations by Swedish prosecutors of bribery related to operations in Uzbekistan. The Stockholm-based carrier has denied it broke any laws, and said it has “zero tolerance” for graft.

Chairman Anders Narvinger will step down this year as part of a management overhaul, the carrier said last month.

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