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Results lead to disappointment at Telia

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13:03 CET+01:00
Swedish-Finnish telecom group TeliaSonera, the largest in northern Europe, reported a fall in fourth quarter underlying earnings Friday that it attributed to weakness in its Swedish fixed-line

business and Finnish mobile operations.

The company said earnings before consideration of interest, taxes, depreciation and amortization came to 7.098 billion kronor in the final three months of 2005 from 7.457 billion in

the same period of 2004.

Average market forecasts had been for earnings to reach 7.559 billion kronor in the fourth quarter.

The news depressed TeliaSonera shares, which were down 5.67 percent in mid-morning trade at 41.60 kronor on a slightly weaker Stockholm market.

Sales increased 7.6 percent in the quarter to 22.876 billion kronor and chief executive Anders Igel said he expected improved results in 2006.

"This year I believe we will show continued sales growth, improved profits and strong cash flow," he predicted.

In its home Nordic markets, TeliaSonera foresaw movement from fixed voice to mobile and Internet protocol-based services continuing in 2006, although it added that "competition in all product areas will remain strong in the home markets."

At TeliaSonera's Swedish business, fourth quarter sales fell 4.7 percent to 9.804 billion kronor and underlying earnings slipped 12 percent to 3.644 billion kronor.

The company said the reduced sales and increased costs of 400 million kronor from storm damage weakened its margin despite the positive effect of a restructuring program, which is going according to plan and is expected to reduce annual costs by four to five billion kronor by 2008.

In Finland, sales fell 12.2 percent to four billion kronor, with underlying earnings plunging 45 percent to 758 million kronor, affected by lower price levels and declining sales at the wholesale level.

AFP

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