Denmark's TDC reports 'unremarkable' Q3 results

TDC's revenue and EBITDA dipped in the third quarter of 2014 as the Denmark-based operator continued to face challenges on its domestic mobile market, although the company reported a near 20 per cent rise in profit year-on-year.

Third-quarter group EBITDA fell 3.1 per cent year-on-year to DKK2.5 billion (€337 million/$424 million)--slightly above the forecast of DKK2.4 billion in a Reuters poll--while revenue dropped 4.8 per cent to DKK5.6 billion. Although the gross profit declined by 4.3 per cent to DKK4.1 billion, TDC said EBITDA benefited from a 6.1 per cent savings in operating expenses.

TDC's third-quarter profit profit for the period increased 18.7 per cent year-on-year to DKK712 million, while the figure for the nine months to end-September grew 21.2  per cent to DKK2.8 billion. However, total comprehensive income dropped 77.5 per cent to DKK120 million.

Overall, the results "show relatively unremarkable business trends, if with some EBITDA upside on cost control," Jefferies analysts commented. "We doubt this set of results will materially influence sentiment on the stock either way," the analysts added.

TDC also confirmed that guidance for the full year has been adjusted slightly to take account of its consolidation of Norwegian cable operator Get as of October. Jefferies noted the move does not affect revenue guidance, which is still targetting a lower organic revenue decline in 2014 than in 2013--that is, better than minus 3.5 per cent year on year.

However, the outlook for EBITDA has been raised to at least DKK9.7 billion (from at least DKK9.6 billion previously), Jefferies noted.

The challenges on the Danish mobile market were reflected by what TDC described as an "unsatisfactory" net loss of 23,000 residential mobile subscribers in the third quarter. However, the company said targeted retention activities and upsale to existing customers resulted in a lower loss compared to the previous two quarters (57,000 in the first quarter and 39,000 in the second quarter).

Activities designed to defend TDC's currently leading position on Denmark's mobile market included the launch of new products such as Telmore Play and mix-it-yourself and Family package in YouSee, which the company said has attracted many customers.

For more:
- see TDC's results statement
- see this Reuters article

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