Telia’s core earnings beat expectations on 5G demand

STOCKHOLM (Reuters) -Nordic telecom operator Telia reported on Wednesday quarterly core earnings that exceeded market expectations, helped by growth in its mobile business and a tight lid on costs.

The company, which offers mobile connections, broadband and television services in Scandinavian countries and the Baltics, also repeated its 2022 forecast despite inflation boosting costs and it as spends heavily to roll out 5G.

“We are proactively taking pricing where we can because we have to ensure in this inflationary environment that we are pricing our services accordingly so that we can continue to invest going forward,” CEO Allison Kirkby said in an interview.

Second-quarter adjusted EBITDA (earnings before interest, tax, depreciation and amortisation) rose 0.3% to 7.68 billion Swedish crowns ($752.28 million) from a year earlier, beating the mean forecast of 7.54 billion crowns, according to Refinitiv estimates.

“We saw mobile revenue grow in all of our markets, including Finland,” Kirkby said, adding that it was driven by rolling out 5G in about 50% of its markets, higher pricing and a return of roaming.

Net sales rose 1.9% to 22.29 billion crowns, beating expectations of 22.19 billion.

Telia launched a strategy in January last year to restructure its business, turnaround its operations in Finland and reduce headcount to save billions of crowns in costs.

“We are building and scaling more modern day products and platforms with fewer partners and fewer people. That is helping reduce the underlying cost base so that’s helping offset some of the inflationary pressure,” Kirkby said.

Telia expects its transformation program to reduce operational expenses by at least 2 billion crowns by 2023.

($1=10.2089 Swedish crowns)

(Reporting by Supantha Mukherjee in Stockholm; Editing by Clarence Fernandez and Louise Heavens)