TeliaSonera reports strong Q4, but stays 'cautious' on 2016 EBITDA outlook

TeliaSonera reported results for the fourth quarter of 2015 that analysts described as "very strong indeed", although they said the Sweden-based operator provided somewhat "cautious" guidance on EBITDA for 2016.

According to Jefferies International, the company's guidance for flat adjusted EBITDA in line with 2015 "might translate into 2-3 per cent downside to current consensus but is very likely rather cautious."

The analysts noted that management highlighted 2016 as one of the transition years of TeliaSonera's new plan announced in autumn 2014, "which itself is credible, but we also think they might be rather cautious at this stage."

CEO Johan Dennelind noted that 2015 and 2016 are two years with heavy investments for TeliaSonera.

"In 2016, the ambition is to maintain EBITDA on a comparable basis at the same level as in 2015 for the continuing operations and capex excluding licence and spectrum fees for the continuing operations is expected to be SEK14 billion-15 billion," Dennelind said.

In the fourth quarter of 2015, net sales in local currencies increased by 2.9 per cent year-on-year to SEK22.66 billion (€2.4 billion/$2.6 billion), which Jefferies said was 2.4 per cent above consensus and 1.4 per cent higher than Jefferies' own estimates. EBITDA before non-recurring items grew 9 per cent year-on-year to SEK6.55 billion, which was 3.5 per cent above consensus and 5.3 per cent above Jefferies estimates.

The company posted a total net loss for the fourth quarter of SEK2.63 billion, which it said was mainly impacted by previously reported non-cash write-downs on its Eurasian and Danish operations of SEK7.2 billion. The company has now reported "Region Eurasia" as discontinued operations following its decision to gradually withdraw from the area.

For the full year of 2015, TeliaSonera reported a 2.4 per cent rise in net sales to SEK86.57 billion. EBITDA was up by just 0.1 per cent at SEK25 billion, while total net income was 34.6 per cent lower at SEK10.2 billion, again due to the write-downs.

For more:
- see the TeliaSonera results statement

Related articles:
TeliaSonera and Ericsson plan launch of 5G services in Stockholm, Tallinn in 2018
TeliaSonera makes €733M write-down on Eurasia, Danish operations
TeliaSonera begins Eurasian exit with $1B Nepal deal
TeliaSonera hails success of 'ambitious' Norwegian merger
TeliaSonera's Eurasia exit opens M&A opportunities for others

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