Telia hit by exposure to TV market

Nordic telco Telia’s exposure to the TV and media business through its ownership of TV4 Group had a sharp negative impact on its Q1 EBITDA, which fell 5.1% on a like-for-like basis to SEK7.277 billion (€665 million).

Christian Luiga

Overall revenues fell by 2.2% to SEK22.427 billion, with service revenues bolstered to some extent by the relative strength of the telecom business.

Revenues in the TV business, on the other hand, dropped by 8% in the quarter, despite the fact that the coronavirus crisis had yet to make its full impact felt at the end of the quarter. The company is also handicapped to some extent by an ongoing dispute with Tele2-owned cable operator Com Hem that has seen a restricted set of services delivered over the Com Hem platform.

Telia has already said that it expects TV and media unit EBITDA to be between zero and SEK0.5 billion this year.

Outgoing acting CEO Christian Luiga said that the company had “identified several mitigating activities that will partially compensate for the decline within our TV and Media unit”.

Luiga said that Telia’s top line service revenues had provide to be relatively robust “despite having been burdened by TV and media and legacy services”.

The company has updated its operating cash flow target for the year. It now expects this to be between SEK9.5-10.5 billion, compared wot SEK12.6 billion last year.

Telia, unlike most other telcos, is exposed to the vicissitudes of the TV advertising market, with about two thirds of its TV revenues coming from free-to-air advertising.

Nordic rival Tele2 this week withdrew its own financial guidance for the year and postponed a planned share dividend after admitting that it would be unlikely to achieve revenue growth.