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UPDATE 1-Telia says cost cuts to boost 2013 profit
January 31, 2013 / 6:30 AM / 5 years ago

UPDATE 1-Telia says cost cuts to boost 2013 profit

* EBITDA ex-items 9.0 bln SEK vs forecast 9.1 bln

* Sees flat revenues, better margin in 2013 (Adds background, detail)

STOCKHOLM, Jan 31 (Reuters) - Nordic and emerging markets telecoms operator TeliaSonera said cost cuts should lead to slightly improved profits for 2013 after it reported fourth quarter earnings roughly in line with expectations.

Telia is shedding thousands of jobs as part of a cost-cutting plan and CEO Lars Nyberg has warned of industry stagnation until telecoms operators find a way to profit from surging smartphone and tablet data traffic.

Telia’s revenue has been roughly flat since 2008 despite a rapid expansion in central Asia as it has been squeezed by competition, regulatory pressure and global economic woes.

“Looking ahead, we believe our revenues in local currencies in 2013 will be at the same level as last year and the EBITDA margin, excluding non-recurring items, will increase somewhat,” CEO Lars Nyberg said in a statement.

Telia said costs would fall in 2013 as it cuts 1,800 jobs in the Nordic and Baltic region and would be reduced further in 2014 as it wraps up a previously announced programme to save 2 billion crowns annually.

Earnings before interest, tax, depreciation and amortisation (EBITDA), excluding non-recurring items, were 9.0 billion Swedish crowns versus the average forecast of 9.1 billion in a Reuters poll and last year’s 9.3 billion.

Telia is also is the target of a preliminary investigation by Swedish prosecutors into allegations of corruption related to the purchase of a 3G license in Uzbekistan.

The company has denied it did anything wrong in buying the license from an offshore company based in Gibraltar and has appointed external investigators to look at the 2.3 billion crown transaction.

Telia’s CEO has staked his job on the outcome of the independent report, which will be made public on Feb. 1. (Reporting by Simon Johnson, editing by Patrick Lannin)

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