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STOCKHOLM, Jan 20 (Reuters) - Telia Co AB said on Wednesday its operational cash flow was stronger than expected in 2020 and confirmed a 2 crowns per share dividend for the year, sending shares in the Nordic telecom operator up more than 4%.
Under Allison Kirkby, who took over as CEO last year, the company reinstated its 2019 full dividend in October after announcing a deal to sell its international carrier business for 9.45 billion crowns.
“The operational free cash flow reached SEK 12.1 billion for the year, above the outlook of ‘reaching the upper end of SEK 9.5-10.5 billion’,” Telia said in a statement, adding the outperformance was mainly linked to working capital.
It said its board of directors regarded 2 crowns per share as a sustainable minimum dividend level for the coming years.
Analysts at Citi said: “The market is likely to react positively given the confirmation of min. dividend floor at SEK2/share.”
Telia also said its October-December results would be hit by a 7.8 billion crowns ($936 million) impairment charge related to business in Finland.
The impairment charge in Finland was due to the pandemic, a slightly weaker underlying performance, and increased network investments, the company said.
Telia said it had generated adjusted fourth-quarter earnings before interest taxes depreciation and amortisation (EBITDA) broadly in line with its stated outlook of around 30.5 billion crowns for the full year.
Analysts had expected EBITDA in 2020 at 30.15 billion crowns, according to Refinitiv data.
On Tuesday, Telia won licences in Sweden’s 5G spectrum auctions. They had been delayed by a court battle with China’s Huawei, which was banned from the country’s next-generation networks.
Telia shares were up 4.2% at 0826 GMT. The company is due to report full-year results on Jan. 29.
$1 = 8.3321 Swedish crowns Reporting by Helena Soderpalm and Johannes Hellstrom, Editing by Sherry Jacob-Phillips and Jane Merriman
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