Swedish telecommunications firm TeliaSonera AB (TLSNY.PK,0H6X.L) reported Friday a slight decline in first-quarter profit as the impact of lower revenues were partly offset by improved margins. Further, the company backed its fiscal 2013 forecast for flat sales and slightly improved margin.
President and CEO Per-Arne Blomquist said, "The competitive situation remains demanding on many markets and puts pressure on overall revenue streams. In this environment, we deliver a quarter with both improved margins and stronger cash flow."
In its first quarter, TeliaSonera's net income attributable to owners of the parent company decreased 0.3 percent to 4.11 billion Swedish kronor from last year's 4.12 billion kronor. Earnings per share amounted to 0.95 krona, flat with last year.
Operating income dropped 4.1 percent to 6.49 billion kronor. The latest quarter results included negative non-recurring items of 139 million kronor, higher than last year's 113 million kronor, mainly related to efficiency measures in Finland. Adjusted operating income decreased 3.7 percent.
Adjusted EBITDA, a key earnings metric, decreased 3.9 percent to 8.51 billion kronor. Adjusted EBITDA margin, however, increased to 34.7 percent from last year's 34.5 percent.
Net sales decreased 4.5 percent to 24.54 billion kronor from last year's 25.69 billion kronor. The negative effect of exchange rate fluctuations was 3.1 percent and that of acquisitions and disposals was 0.5 percent. Net sales in local currencies and excluding acquisitions decreased 0.9 percent.
During the quarter, the total number of subscriptions decreased by 0.8 million in the consolidated operations and remained unchanged in the associated companies. The number of subscriptions rose 10.1 million from the end of the first quarter of 2012 to 182.1 million.
The company noted that its business in Eurasia continued to perform well with net sales growth of 5.4 percent, and delivered once again double digit growth with continued pick-up in data revenues.
Meanwhile, mobility services net sales decreased 5.1 percent, impacted by major reductions in regulated interconnect rates, and broadband services net sales decreased 8.3 percent as it experienced higher pressure on traditional voice revenues and were also impacted by slower roll-out of fiber due to cold weather conditions.
In the quarter, the addressable cost base decreased 6 percent to 6.99 billion kronor.
Looking ahead for fiscal 2013, TeliaSonera continues to expect that net sales in local currencies and excluding acquisitions would be flat. Currencyfluctuations may have a material impact on reported figures in Swedish krona. The EBITDA margin, excluding non-recurring items, is expected to increase slightly compared to last year's 34.5 percent.
The company also said it remains determined to bring total costs down by 2 billion kronor net over a two year period.
In Stockholm, TeliaSonera shares closed Thursday's regular trading at 43.40 kronor, up 1.17 percent, on a volume of 6.4 million shares.
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