TELE2 INTERIM REPORT JANUARY-JUNE 2006
In Q2 2006 Tele2 increased revenues by 12% to SEK 13.5 billion with mobile revenues rising 29%
- Excellent performance in Russian mobile: customer intake, revenues and EBITDA all growing strongly
- Q2 2006 EBITDA amounted to MSEK 1,397 (1,689), including integration costs in Versatel of MSEK 57 and a capital gain of MSEK 52 from the sale of Tele2's Czech operations
- Operating revenue for the first six months of 2006 increased by 14% to MSEK 26,935 (23,622)
- Net profit for the first six months of 2006 amounted to MSEK 476 (1,159)
- Earnings per share, after dilution, for the first six months of 2006 amounted to SEK 1.25 (2.61)
- Acquisition announced of E.ON Bredband in Southern Sweden
We are experiencing a high demand for our broadband products but have been holding back in taking on new broadband customers during the quarter. This was partly due to a large backlog from Q1 2006, which we thought would disappear more rapidly, as well as the inability of the incumbents to process orders as fast as we would have liked. This caused a slow down in new broadband sales, in order to catch up, as well as an increase in churn. We anticipate this situation improving during the remainder of the year, due to improvements in our forecasting and in the incumbents provisioning process. Consequently, our broadband customer intake will accelerate from its current levels in the coming quarters.
Our fixed line businesses continued to experience a high level of churn. We lost 701,000 of our 16 million fixed line customers during the quarter, with a significant proportion of those coming from France where we are experiencing intense competition from the incumbent, as well as a highly competitive broadband market. However, it must be recognized that the traditional European fixed telephony market is now in structural decline.
We are always trying to improve our disclosure and transparency. This quarter we have taken another positive step by providing the split in our broadband base between direct access and broadband resale customers.
Looking to the remainder of this year, we will continue with the emphasis on mobile and broadband while at the same time seeking to reduce churn, minimize costs and improve efficiencies."
Lars-Johan Jarnheimer, Telephone: + 46 (0)8 562 640 00
President and CEO, Tele2 AB
Håkan Zadler, Telephone: + 46 (0)8 562 640 00
CFO, Tele2 AB
Dwayne Taylor, Telephone: + 44 (0)20 7321 5038
Lena Krauss, Telephone: + 46 (0)8 562 000 45
Visit us at our homepage: www.tele2.com
A conference call to discuss the results will be held at 16.00 (CET) / 15.00 (UK time) / 10.00 am (New York time), on August 1, 2006. The dial-in number is: +44 (0)20 7365 1828 or US: +1 718 354 1158. Please dial in 10 minutes prior to the start of the conference call to allow time for registration. A recording of the conference call will be available for 10 days after the call on: +44 (0)20 7806 1970 or US: +1 718 354 1112 with access code 4328493#. The conference call will be web-cast on Tele2's website www.tele2.com, along with the presentation material.