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TELIA - Telia AB News Story

SEK36.66 0.0  0.1%

Last Trade - 12:55pm

Sector
Telecoms
Size
Large Cap
Market Cap £12.76bn
Enterprise Value £21.14bn
Revenue £7.54bn
Position in Universe 55th / 1832

UPDATE 1-Tele2 shares slump as 2020 guidance and extra payout put on hold

Tue 21st April, 2020 9:18am
* Withdraws 2020 guidance due to COVID-19 pandemic
    * Tele2 says unlikely to grow revenues this year
    * CEO says now focused on defending earnings
    * Q1 core profit SEK 2.24 bln vs mean forecast 2.32 bln
    * Shares fall 7% 

 (Adds CEO and analyst comment, share, detail)
    STOCKHOLM, April 21 (Reuters) - Telecom operator Tele2
 TEL2b.ST  on Tuesday withdrew its financial guidance for 2020
and put plans for a special dividend payout to shareholders on
hold due to the global coronavirus pandemic, sending its shares
down 7%. 
    The Swedish company, which had previously targeted low
single-digit growth of end-user service revenue and
mid-single-digit growth of its underlying core profit said its
focus for the year had now shifted to cost control. 
    "We don't think the preconditions are there to grow our
revenues this year," CEO Anders Nilsson told Reuters.
    "And due to that we have changed focus to now focus at
defending our earnings from last year."
    First-quarter underlying earnings before interest, tax,
depreciation and amortization, including costs for leased assets
were 2.24 billion Swedish crowns ($223 million), in line with
2.25 billion crowns in the year-earlier quarter. 
    That was below the 2.32 billion mean analyst estimate,
according to a consensus forecast compiled by the company.
    "The withdrawal of guidance in our view is somewhat
disappointing, given that telcos are meant to the bastion of
stability and visibility of earnings," JP Morgan analysts said
in a research note.
    Tele2 also said its board had decided to suspend a proposed
extraordinary dividend payment of 3.5 crowns per share set for
May, saying it was "prudent to maintain a financial buffer"
given the lack of clarity of the virus outbreak effects.
    Nilsson said that move was purely a precautionary measure. 
    The proposal for an ordinary dividend of 5.50 crowns per
share to be put to the annual general meeting in May remained
unchanged, the rival of Sweden's Telia  TELIA.ST  said.

($1 = 10.0532 Swedish crowns)

 (Reporting by Johannes Hellstrom; Editing by Simon Johnson and
Niklas Pollard)
 ((johannes.hellstrom@thomsonreuters.com; +46850242388; Reuters
Messaging: johannes.hellstrom.reuters.com@reuters.net))
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