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Telia Lietuva results for the nine months of 2017

(October 19, 2017)

The Board of Telia Lietuva, AB (hereinafter “Telia Lietuva” or “the Company”) approved unaudited Telia Lietuva, AB Consolidated Interim Financial Statements, prepared according to International Financial Reporting Standards as adopted by the European Union, for the nine months’ period ended 30 September 2017. 

Third quarter of 2017:
- Total revenue amounted to EUR 90.2 million, up by 3.9% over the revenue of EUR 86.8 million in Q3 2016.
- EBITDA, excluding non-recurring items, was EUR 32.8 million, an increase of 8.2% over the EBITDA, excluding non-recurring items, of EUR 30.3 in Q3 2016. 

First nine months of 2017:
- Total revenue amounted to EUR 270.1 million, up by 6.6% over the revenue of EUR 253.5 million for 9 months of 2016.
- EBITDA, excluding non-recurring items, was EUR 91.2 million, an increase of 2.9% over EBITDA, excluding non-recurring items, of EUR 88.6 for 9 months of 2016.
- Free cash flow amounted to EUR 31.3 million (EUR 36.9 million a year ago).

Management comment:
The merger of mobile and fixed broadband operations into single entity and rebranding is bearing fruit: customers are offered offers that are unique in the market and that combine various technologies, and the Company records growth in term of both revenue and profitability. Our top line shows further potential, especially in data monetization and further positive market share improvement. Growing demand for high quality video content, modern TV services, has contributed to growth in fixed broadband business. And after the legal merger and successful rebranding, we can now focus on further operational and structural improvements in the cost base; this is reflected in the EBITDA improvement in Q3 2017.



In spring, we offered a unique hybrid-type Internet service that integrates xDSL connection with fast 4G mobile internet, and in the autumn, we are ready to launch a converged offer “Telia One” that gives more value – higher speed, more data and more TV channels – to those who have both fixed and mobile services. It is convenient and worth it. Customers can get fixed and mobile home offer by visiting one portal, one retail outlet, or calling one customer care number.

We also observe the changing behaviour of our customers – especially their growing appetite for mobile data abroad. It started last year when we launched the “roam like at home” offer for customers travelling in the Nordic and Baltic countries, and accelerated after 15 June 2017 when roaming charges were eliminated in the European Union. Mobile data usage abroad rocketed by 2.4 times, while total mobile data usage increased by 1.8 times over the year. 

To ensure customer connectivity we continued our investments in 4G and fiber-optic network. During the first nine months of 2017, total investments amounted to EUR 42.1 million, an increase of 15 per cent over the year. More than 300 base stations were added to the largest and the fastest 4G/LTE network in the country owned by Telia Lietuva. 

Despite decline in customer numbers in the Lithuanian market, we have managed to increase our customer numbers over the year:
- The number of IPTV users over the year increased by 11.1 per cent up to 204 thousand,
- The number of FTTH Internet customers grew by 7.4 per cent up to 259 thousand,
- The number of post-paid service users rose by 5.4 per cent up to 1,058 thousand. 

The intake of new customers in combination with higher mobile data usage and ongoing demand for smart phones and tablets, had a positive effect on total revenue growth whereof:
- Revenue from equipment sales went up by 17.1 per cent,
- Revenue from TV services increased by 11 per cent,
- Revenue from billed mobile services was up by 7.1 per cent. 

During Q3 2017, our costs were under control and in combination with revenue growth, we had the highest EBITDA, excluding non-recurrent items, margin of 36.4 per cent since the beginning of joint operations in January 2016. 

Exploring possibilities close to the core business, Telia Lietuva together with other two Lithuanian operators – Tele2 and Bit? – are planning to enter the instant payment market. The European Commission’s permit for the creation of a common platform for provision of instant payments was received in July 2017. The next step will be investment into a jointly owned entity that will create, operate and supervise the platform required for the provision of instant payments. 

In August, the Company signed an agreement for the acquisition of UAB Duomen? Logistikos Centras, a provider of data transfer and data centre services. Completion of the acquisition is subject to receiving a concentration permit from the Competition Council. 

 

ENCL.:
- Telia Lietuva, AB Consolidated Interim Financial Statements for the nine months’ period ended 30 September 2017.
- Presentation of Telia Lietuva AB Group results for the nine months of 2017.

 

         Darius Džiaugys,
         Head of Investor Relations,
         tel. +370 5 236 7878,
         e-mail: [email protected]


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