By Dominic Chopping
STOCKHOLM--Tele2 AB (TEL2-B.SK) on Wednesday posted a forecast-beating first-quarter net profit and backed its full-year guidance.
The Sweden-based telecoms company posted a net profit for the quarter ended March 31 of 968 million Swedish kronor ($103.6 million) compared with SEK343 million in the same period last year. Analysts polled by FactSet had expected SEK701 million.
Adjusted earnings before interest, taxes, depreciation and amortization--the company's preferred measure which strips out exceptional and other one-off items--rose to SEK2.66 billion compared with SEK1.46 billion for the first quarter of 2017.
Revenue rose to SEK7.22 billion from SEK5.43 billion.
The company has recently completed its merger of TV provider Com Hem and said that cost transformation work is on track.
In the quarter it realized SEK50 million in cost synergies, and reached an annualized run-rate of SEK300 million at the end of the period, out of its target SEK900 million after three years. The lower costs were mainly related to headcount reduction in common functions and the Sweden Consumer segment.
Tele2 said it incurred SEK155 million of integration costs in the quarter, and has so far incurred SEK365 million of the SEK1 billion it expects to book in restructuring costs.
For 2019, the telecom still expects end-user service revenue to remain essentially flat from 2018, as revenue-growth-enhancing initiatives are rolled out. It targets mid-single-digit growth in adjusted Ebitda, and capital expenditure of between SEK2.9 billion and SEK3.2 billion, excluding spectrum.
Midterm ambitions include low-single-digit growth of end-user service revenue, mid-single-digit growth in adjusted Ebitda and capital expenditure of SEK3.0 billion to SEK3.5 billion.
Write to Dominic Chopping at email@example.com; @domchopping @WSJNordics