TeliaSonera posts bumper interim profit

Swedish-Finnish telecom firm TeliaSonera has posted a pre-tax profit of 5.5 billion kronor ($830 million) for the second quarter of 2013, indicating that business-wise the firm has emerged relatively unscathed from the Uzbekistan bribes scandal.

TeliaSonera posts bumper interim profit

“I think we have coped quite well given the media pressure we’ve had on the company, said TeliaSonera CEO Per-Arne Blomquist in a statement.

Sales remained stable in the quarter and continued cost-cutting enabled the firm to improve on analyst profit forecasts, while dipping below the 6 billion posted in the corresponding period of last year.

“In the second quarter, organic revenue growth turned positive and margins improved further,” Blomquist said.

Turnover amounted to 25.274 billion kronor, compared to 26.294 billion kronor in the corresponding period of 2012. EBITDA, excluding non-recurring items, amounted to 8.928 billion kronor, compared with 9.034 billion kronor a year earlier.

Sales for mobile services in Europe declined in most countries, although austerity-hit Spain reported a 20 percent improvement. The firm reported an increase in demand for fibre broadband, a reaction to the shift to online streaming television services.

“Network quality and capacity are crucial to meeting the exploding demand for data; therefore we will further invest in 4G and mobile coverage, expand within fibre and selectively target acquisitions of existing fibre networks in our home markets,” Per-Arne Blomquist said.

The firm reported no change in its forecasts for the remainder of 2013.

The stock market responded positively to the report in early trading on Wednesday, with TeliaSonera stock climbing 1.6 percent.

TT/The Local/pvs

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‘Rotten’ business claims at Nordic TeliaSonera

Swedish-Finnish telecom operator TeliaSonera has been accused of “rotten” business dealings in Azerbaijan, following a separate bribery scandal in Uzbekistan.

'Rotten’ business claims at Nordic TeliaSonera
A TeliaSonera conference in Stockholm last year. Photo: TT

Folksam, which is one of the largest insurance companies in Sweden, has accused the firm of “systematic cheating”, after it emerged that TeliaSonera’s subsidiary in Azerbaijan had ties with the family of Ilham Aliyev, the Arab nation’s leader.

It has been claimed that the dictator’s daughters were shareholders of TeliaSonera's subsidiary Azertel, via a connected company based in Panama.

“It is distressing that in a large Swedish company…people thought that cheating would pay off in the long run,” Carina Lundberg Markow, one of Folksam’s managers told the TT news agency on Wednesday.

She criticized TeliaSonera for failing to act “in an honest and open way” when entering new markets.

“Instead, they choose to pay for success,” she added.

TeliaSonera is one of the biggest telecom operators in the Nordic and Baltic countries and also operates in several emerging markets in Eurasia including Russia and Turkey, as well as Spain. The Swedish state owns 37.3 percent of the company.

Swedish prosecutor Gunnar Stetler is already investigating claims of unethical business practices in Uzbekistan and told TT he had also been given new information concerning potential bribery in Azerbaijan.

The company has voluntarily cooperated with the investigation, handing over what Stetler describes as “extensive information” about “the terms and conditions in Eurasian countries”.

Stetler said he was unable to discuss how he had responded to the information. But calls are growing for TeliaSonera to release a public report about its business dealings.

“Now it is extremely important to create transparency,” said Lundberg Markow.

“This shows the importance of having a set of values when doing business in complex markets or countries,” she added.

TeliaSonera and Norwegian rival Telenor recently merged their operations in Denmark, while the telecoms giant last year purchased rival Tele2's Norwegian division for 5.1 kronor.