Telia Has Little Margin of Error on the Dividend Front; No Surprises in Q4 Results

Higher energy costs continued to be the main trend during Telia’s fourth-quarter results, causing a 2.0% organic decline in EBITDA despite a 0.7% organic growth in service revenue. Mobile service revenue performed well across all geographies mainly due to price increases, with Norway and Finland leading the way at a 3.5% and 3.8% mobile growth, respectively. In the Baltics (10% of total revenue) sales grew at 5% to 7% organically due to Telia’s strategy of annual price increases in these geographies, with sales growth flowing to the bottom line due to operating leverage and cost control. Denmark’s EBITDA in the fourth quarter jumped 21.4% thanks to significant cost reductions. We are maintaining our SEK 35 fair value estimate for Telia.