TeliaSonera First-Quarter Revenue, Profit Decline

  By Sven Grundberg 
 

STOCKHOLM--TeliaSonera AB's (TLSN.SK) first-quarter revenue and profit fell on a continued slowing of the telecom operator's main mobile unit.

A 3.5% sales drop for the unit resulted in revenue of 23.97 billion Swedish kronor ($3.64 billion) from 25.54 billion kronor a year ago. Net profit fell to 3.95 billion kronor from 4.11 billion kronor while earnings before interest, taxes, depreciation and amortization fell 1.6% to 8.25 billion kronor.

"Our markets continue to be characterized by a changing customer behavior and an evolving convergence trend," Chief Executive Johan Dennelind said in a statement.

TeliaSonera's growth is affected by difficult economic conditions and shifts from voice services to wireless data.

To counter stagnating growth in its mature markets the Stockholm, Sweden-based operator has expanded in central and east Asia over the past decade with operations Kazakhstan, Tajikistan, Azerbaijan, Nepal and elsewhere.

But, competition in these markets is heating up. Sales for TeliaSonera's Eurasia unit declined 1.3%. Revenue growth was positive in local currencies but was negatively affected by unfavorable foreign-exchange movements--notably a recent devaluation of the Kazakhstan tenge, the company said.

The crisis in Ukraine contributed to price declines for several of its listed holdings including Russia's MegaFon OAO (MFON.MZ), Kazakhstan's Kcell (KCEL.KX) and Turkcell Iletisim Hizmetleri AS (TCELL.IS).

The forecast for full-year 2014 is unchanged and sales in local currencies will be on par with 2013, it said. Margin on earnings before interest, taxes, depreciation and amortization is expected to remain at 35% this year--the same as last year.

The Swedish government owns 37% of TeliaSonera.

Write to Sven Grundberg at [e-mail]; Twitter: @svengrundberg

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