Tele2 Reports Higher-Than-Expected Q2 Net Profit and Raises Revenue Growth Targets

Strong Financial Performance

Tele2's net profit for the quarter reached 887 million kronor ($86.5 million), surpassing last year's figure of SEK847 million. Analysts polled by FactSet had projected SEK849 million.

The company's preferred metric, underlying earnings before interest, taxes, depreciation, amortization and the cost of leased assets (Ebitdaal), rose by 2% to SEK2.51 billion.

Revenue Growth

Tele2 reported a 4.9% increase in revenue, amounting to SEK7.15 billion. This exceeded the FactSet estimate of SEK7.1 billion.

Future Outlook

Despite inflationary pressures, Tele2 remains optimistic about future prospects. According to Chief Executive Kjell Johnsen, the company's leverage range puts them in a favorable position to make investments that will strengthen Tele2 in the long run while continuing to pay dividends.

Revised Targets

The telecom company has revised its targets for end-user service revenue growth. It now aims for low-to-mid single-digit growth in 2023 and the midterm, as opposed to the previous target of low-single-digit growth.

Additionally, Tele2 plans to reduce capital expenditure to sales below 14% in 2023, compared to the previous range of SEK2.8 billion-SEK3.3 billion. The midterm target for capital expenditure to sales is set at 10% to 14%, down from SEK2.8 billion-SEK3.3 billion previously.

Unchanged Growth Targets

Despite the revisions, Tele2's underlying Ebitdaal growth targets remain unchanged.