By Alessandro Parodi
(Reuters) -Swedish telecom operator Telia reported second-quarter core earnings above market expectations on Friday, aided by the sale of some assets as it focuses on key markets to reduce costs.
Telia, which provides telecom services in the Nordic and Baltic countries, had been grappling with lower ad sales in its media business as inflation-hit companies tighten their advertising budgets.
The group’s quarterly adjusted operating profit before depreciation and amortisation rose 6.2% on a like-for-like basis to 7.97 billion Swedish crowns, higher than an average forecast of 7.83 billion in an analysts poll provided by Telia.
The like-for-like comparison excludes exchange rate effects and divested businesses.
“We expect consensus may tick higher following the beat,” J.P. Morgan said in a note.
Telia said in a separate statement that it had offered to buy Swedish broadband provider Bredband2 i Skandinavien for 3.25 Swedish crowns ($0.3342) per share in cash. The agreed offer values Bredband2 at 3.1 billion Swedish crowns.
Last September, the company presented a restructuring plan that included cutting 3,000 jobs or about 15% of its workforce in 2024. The aim was to reduce costs by 2.6 billion crowns annually.
It has since sold non-core activities, including its TV & Media business, to cut costs and reduce inefficiencies.
On Thursday, Telia said it would sell its 49% stake fixed network operator Tet and 60.3% of mobile network operator LMT in Latvia, without disclosing financial details of the transaction.
CEO Patrik Hofbauer told Reuters that this was in line with cost-cutting plans, and that the group will not exit key markets in the Nordic and the Baltics.
Telia reiterated its 2025 forecast, provided last October, for adjusted EBITDA growth of at least 5% and service revenue growth of around 2%, both on a like-for-like basis.
($1 = 9.7254 Swedish crowns)
(Reporting by Alessandro Parodi in Gdansk, editing by Matt Scuffham)
