Telecom operator Telia ups 2020 forecast after third quarter beat

STOCKHOLM (Reuters) - Nordic telecom operator Telia Company on Wednesday reported quarterly core earnings ahead of market expectations aided by cost savings, and upped its forecasts for the full year.

Investors are hoping that Telia’s new chief executive, Allison Kirkby, a former CEO at rival Tele2, can revive fortunes at the partially state-owned operator, and developments in the third quarter will likely boost those expectations.

Under Kirkby, who took over in May, the company reinstated its full dividend in October after announcing a surprise deal to sell its international carrier business for 9.45 billion crowns.

Third-quarter adjusted EBITDA (earnings before interest, tax, depreciation and amortisation) was 8.21 billion crowns ($941.89 million) compared with 8.23 billion crowns a year earlier, and ahead of the 7.81 crown billion mean analyst forecast in a Refinitiv poll.

“On the back of a solid report this morning for our third quarter where we despite COVID-impacts have over-delivered versus our own expecations, we have raised both our EBITDA and our operational free cash flow outlook for the year,” Kirkby said.

Telia said it expected its operational free cash flow for 2020 to land in the upper end of the previously announced 9.5-10.5 billion crowns range, while adjusted EBITDA was now seen at 30.5 billion, an upgrade of about 500 million crowns.

“Since our last interim report, we have made good progress on the strategic priorities identified upon my arrival at Telia just over five months ago,” Kirkby said.

Telia’s stock, which has underperformed rival Tele2 for many years, is up 13% since Kirkby took over as CEO, while Tele2 is down 9%.

($1 = 8.7165 Swedish crowns)

Reporting by Johannes Hellstrom; editing by Niklas Pollard and Louise Heavens