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Stockholm (pte029/26.04.2005/12:15) - Nordic telecoms giant TeliaSonera http://www.telia.com has reported a fall in first quarter profits and warned that intense competition will hit margins during the rest of the year. As the company reports today in a press release on its website, net income totalled 3.56 billion Swedish Krone (389.3 million euros), a slight fall from the 3.65 billion Krone (399.2 million euros) from the same period a year earlier. Earnings per share also dropped from 0.73 Krone (0.08 euros) in the first quarter of 2004 to 0.68 Krone (0.07 euros) in the first quarter of this year. Net sales increased 5 per cent to 20.8 billion Swedish Krone (2.28 billion euros). There was also an agreement on expanded ownership in Turkcell.
"The good development in most operations did not compensate for the price reductions and costs for maintaining the market position in Finland, hence group margin declined," said Anders Igel, TeliaSonera's president and CEO. "Market realities in Sweden and Finland emphasise the need for the restructuring programs already initiated. An increased holding in Turkcell means opportunities for enhanced shareholder value and a more growth-oriented profile for the group," he added.
According to the company, strong price pressure within mobile communications and lower sales volumes within fixed voice substantially decreased sales in Finland. Sweden also reported a drop in sales due to lower demand in fixed voice. "The competitive environment in Sweden and Finland is intensifying faster than expected. This will continue to have a negative impact on EBITDA margins and operating income excluding non-recurring items for the rest of the year," the company said in the press release. The customer base also continued to grow in the first quarter. There was a year-on-year growth of 1.3 million new customers in the Nordic and Baltic operations and 1.5 million new customers in Eurasia, with 12.5 million new customers in the associated companies in Turkey and Russia.
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