TeliaSonera posts strong earnings of EUR 536m

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The Swedish-Finnish telecommunications operator’s earnings report beats analysts’ expectations.

25 April 2008

STOCKHOLM - Swedish-Finnish telecommunications operator TeliaSonera, currently eyed as a possible acquisition target by France Telecom, reported strong first-quarter results Friday that beat analysts' expectations.

The company, which is in the midst of a restructuring process, posted a net profit of 4.99 billion kronor (EUR 536 million) in the first quarter, up 8.9 percent, according to its earnings statement.

TeliaSonera also said its net sales rose by 7.4 percent to 24.40 billion kronor, easily beating expectations of 24.13 billion kronor, according to analysts polled by SME-Direkt.

For 2008, the Nordic operator said its outlook was unchanged and that it expected an operating margin similar to the 32.2 percent margin it posted in 2007, while its net profit would be "somewhat higher" than the 2007 number, excluding "positive one-off items."

For all of last year, the group reported a net profit of 20.29 billion kronor.

TeliaSonera, which traditionally has focused on fixed telephony, is currently restructuring with large investments in IP and mobile telephony services, as well as a string of cost-cutting measures set to be carried out by the end of 2009.

The company hopes to reduce annual costs by around five billion kronor compared to its 2007 level.

The restructuring process, which includes some 2,900 job cuts across Sweden and Finland, is meanwhile expected to cost around four billion kronor.

TeliaSonera is also focusing on activities abroad to compensate for a slowdown on its domestic market.

Sales jumped by 31.6 percent in the group's growth engine, Europe and Asia, with large volumes in particular in Kazakhstan and Azerbaidjan where it has recently made several acquisitions.
"We reported a satisfactory set of numbers for the first quarter," chief executive Lars Nyberg said in a statement.

"However, we still need to continue improving efficiency to be able to defend our leading positions in more mature markets and to provide high quality in networks and services throughout the group," he said.

The Swedish state, which owns 37.3 percent of TeliaSonera, has previously announced plans to sell its stake, along with its holdings in five other companies. In May 2007 it sold eight percent of TeliaSonera to institutional investors.

France Telecom has recently expressed interest in buying the stake.

The Finnish state meanwhile owns 13.7 percent of TeliaSonera's capital.

The TeliaSonera share price was up by 4.67 percent at 51.50 kronor in early afternoon trading on the Stockholm stock exchange, outperforming the OMX-30 bluechip index which was up 3.45 percent.

[AFP / Expatica]

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