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Tele2 Q1 core profit just below forecast, 2020 guidance suspended

STOCKHOLM, April 21 (Reuters) - Swedish telecoms operator Tele2 reported quarterly core earnings slightly below market forecasts on Tuesday and suspended its financial guidance for 2020, citing uncertainty related to the COVID-19 pandemic.

First-quarter adjusted earnings before interest, tax, depreciation and amortization (EBITDAal) were 2.24 billion Swedish crowns ($223 million), in line with 2.25 billion crowns in the year-earlier quarter, but just below the 2.32 billion mean analyst forecast, according to an analyst consensus compiled by the firm.

“While our view on the mid-term remains unchanged, the pandemic creates a degree of uncertainty in our near-term forecasts,” Tele2 CEO Anders Nilsson said in a statement.

“We are therefore forced to suspend our guidance for 2020 until we gain more clarity on the longevity and impact of the outbreak.”

The company’s mid-term targets included single-digit growth of end-user service revenue and mid-single-digit growth of its underlying core profit (EBITDAal).

Tele2 also said its board had decided to suspend a proposed extraordinary dividend payment set for May, saying it was “prudent to maintain a financial buffer” given the lack of clarity of the virus outbreak effects.

The proposal of an ordinary dividend of 5.50 crowns per share to be put to the annual general meeting in May remains unchanged. ($1 = 10.0532 Swedish crowns) (Reporting by Johannes Hellstrom; Editing by Simon Johnson)

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