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Telia finds cause for optimism in its latest numbers

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Swedish operator group Telia has a spring in its step and decided to upwardly revise its outlook following better than expected Q3 earnings.

Adjusted EBITDA rose 1.8%, in the third quarter, with margin up slightly too. In his accompanying comments Telia CEO Johan Dennelind said the company’s cost reduction programme is going well and that he’s confident whatever financial objectives they set for the year will be achieved.

“We are clearly on track to deliver the net cost reduction of SEK 1.1 billion that we have set out as a priority for the year,” said Dennelind. “Our operational free cash flow continues to be strong, having generated SEK 10.2 billion over the last 12 months. Our adjusted EBITDA is growing in six out of seven countries, with Finland, Norway as well as our central units being the main drivers. The performance is a combination of strong execution of the cost ambition as well as delivering synergies and stronger propositions to customers from the acquisitions we have done in recent years.

“No doubt comparisons will continue to be tough in the fourth quarter, especially in Sweden. Still, given the performance so far, with adjusted EBITDA having grown by 4 percent excluding currency effects, we up our full year EBITDA guidance from ‘in line or slightly above the 2017 level’ to ‘slightly above the 2017 level’.”

Telia seems to be on a similar journey to its compatriot Ericsson, which also expressed cautious optimism when it announced its Q3 numbers yesterday. It’s early days but if vendors and operators continue to sound so chirpy we might be inclined to start drawing hasty conclusions about a 5G-fueled uptick in the telecoms cycle.

Telia Q3 2018


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