Stockholm-based European telecom operator (telecom) Tele2 increased its revenues during the third quarter but saw profits fall, the company reported today.
Despite this, the telecommunications operator – which serves Sweden, Estonia, Latvia and Lithuania – had sales of SEK 6.6 billion (£ 556 million, EUR 658.8 million, $ 768.1 million), an increase of 2% compared to 2020.
The company’s net profit of SEK 1.1 billion was SEK 0.1 billion lower than in the third quarter of 2020. It said that this was due to repayments on its former TV, broadband and telephone brand Com Hem and cost SEK 0.1 billion.
It also referred to the positive inflow of a national legal settlement of SEK 0.1 billion during the same quarter of 2020, although this year it also benefited from a SEK 130 million legal settlement from a dispute over the former Tele2 operations in the Netherlands, which was divested in 2019.
While profits beat analysts expectations of a net profit of SEK 980 million, which was revealed in a survey by FactSet, the company’s share price fell on Tuesday morning on the result and fell by 3.91% at 10:52 CEST to the lowest level since July.
Underlying earnings before interest, taxes, depreciation and amortization (EBITDA) increased organically by 5% compared to 2020, which the company attributed to end-user service growth of 2%, cost savings and reduced headwinds related to the pandemic.
“Now that most of the pandemic effects are gone and roaming revenues are neutral for growth on an annual basis, the underlying growth of the business becomes more obvious,” says President and CEO Kjell Johnsen.
“Looking ahead, we expect activity to pick up in our markets during the fourth quarter and be ready to take on that challenge,” says Johnsen, adding that the company was on a “good path for the entire year.”
The company announced this quarter that it would sell its 25% stake in T-Mobile Netherlands, which is being bought by Apax Partners and Warburg Pincus for € 5.1 billion; as reported by New Statesman.
Tele2 said it saw a capital-free cash flow from continuing operations of SEK 1.9 billion during the quarter, with SEK 4.9 billion generated over the past 12 months, corresponding to SEK 7.0 per share.
An extraordinary dividend of SEK 3.0 was distributed to shareholders in July, followed by a second part of the ordinary dividend of SEK 3.0 in October.
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