Telia Earnings: Service Revenue Growth Drives EBITDA Beat

Telia's second-quarter revenue grew by 2.3% with service revenue growing ahead of company-compiled consensus estimates at 3.3%. Similarly, EBITDA was ahead with 6.4% growth, boosted by ongoing cost restructuring and, more surprisingly, on the back of TV and media returning to growth and positive EBITDA. However, we caution investors not to extrapolate any trends in the TV business as its performance has been lumpy for many years. Overall, these are a good set of results and shares were up over 4% in early trading. Management made no changes to guidance and we continue to believe Telia is on track to meet its outlook for low- to mid-single-digit growth in EBITDA and low-single-digit growth in revenue. We maintain our SEK 29 fair value estimate.