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Investing.com -- Telia Company AB (ST:TELIA) shares rose more than 4% on Thursday after the Swedish telecommunications group reported third-quarter results in line with expectations and raised its 2025 free cash flow guidance, driven by lower capital expenditures.
Service revenues grew 1% year over year, the same pace as the previous quarter, while adjusted EBITDA rose 4.4%.
Morgan Stanley said the overall quarter was “steady,” with “service revenues were as expected, whilst EBITDA was also in line with consensus.”
Other operations offset shortfalls in Sweden and Norway, where performance continued to lag.
In Sweden, mobile service revenue declined 1.2% year over year, following a 0.5% drop in the second quarter, while fixed service revenue increased 3.9%, supported by broadband and TV growth. EBITDA in Sweden rose 7.6%.
In Norway, service revenues fell 3.5% and EBITDA declined 8.2%. Morgan Stanley noted that “Norway continued to struggle this quarter,” citing weaker wholesale revenue and pressure on TV and broadband.
Group-level revenues totaled SEK 19.86 billion, flat compared with forecasts and down 0.7% from a year earlier. Adjusted EBITDA reached SEK 8.46 billion, a 2.5% increase from the same period in 2024 and 1% above Morgan Stanley’s estimate.
Net income was SEK 2.35 billion, up 1.2% year over year. Capital expenditures excluding spectrum were SEK 2.79 billion, about 10% below expectations.
The brokerage said the cash flow performance “beat expectations due to higher working capital, lower interest paid and restructuring.”
Telia slightly upgraded its 2025 outlook, now guiding for service revenue growth of about 2%, adjusted EBITDA growth of at least 5%, and capital expenditures of roughly SEK 13 billion, down from a prior estimate of up to SEK 14 billion.
Free cash flow guidance was lifted to around SEK 8 billion from SEK 7.5 billion. The report said, “2025 guidance [was] slightly upgraded, with the company expecting lower capex and higher FCF.”
In the Baltic markets, results were mixed. Lithuania’s revenues increased 0.3% and EBITDA grew 6.2%. Estonia reported a 2.1% revenue rise and a 3% EBITDA gain. Finland’s revenues slipped 1.6% from a year earlier but came in slightly above estimates, while EBITDA rose 4.9%.
Telia’s adjusted EBITDA margin reached 42.6%, up from 41.2% a year earlier. Operating income rose 4.2% to SEK 4.01 billion, while income after financial items was SEK 3.28 billion, an 8% improvement from 2024.