July 20, 2017 / 6:15 AM / a year ago

Nordic telco Telia to cut costs as core Q2 earnings miss forecast

STOCKHOLM, July 20 (Reuters) - Nordic telecom operator Telia Company said on Thursday it planned to cut costs by 5 percent in Sweden this year, and by at least 3 percent for the group next year, as it reported second-quarter core earnings just below forecast.

Telia said it planned to reduce its personnel and external consultants by 850 people, reducing costs in Sweden by 5 percent in the second half of 2017 year-on-year.

The company, which has 21,000 employees, also planned to reduce costs for the group by at least 3 percent in 2018.

“This is vital for a competitive Telia Company as we still see pressure on our legacy revenues and, as anticipated, falling one-off revenues from fibre,” CEO Johan Dennelind said in a statement.

The firm’s earnings before interest, tax, depreciation and amortisation (EBITDA) were 6.1 billion Swedish crowns ($734 million) excluding non-recurring items, down from 6.4 billion crowns a year ago and just below a mean forecast of 6.2 billion crowns in a Reuters poll.

Net sales fell 6.3 percent to 19.8 billion crowns versus a mean forecast of 19.7 billion crowns in the poll.

Telia raised its 2017 forecast for free cash flow to above 7.5 billion crowns from the previous guidance of above 7 billion crowns.

It repeated its forecast for an operating profit (EBITDA) and dividends around the level of 2016.

Reporting by Helena Soderpalm and Olof Swahnberg; Editing by Edmund Blair

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