Stable earnings despite revenue pressure

TDC's earnings remain stable due partly to its positive performance in the mobile market and reduced operating expenses. On this basis, TDC is affirming its net income outlook for 2013 though the Group's revenue was lower than expected, as described in the Q3 Interim Report.

“Our domestic mobile business is generating such excellent trends that in the third quarter we saw the best development in earnings for the past two years in that sector. That and the further reductions in operating expenses are important reasons for both cash flows and profit margins developing reasonably well,” says Carsten Dilling, President and CEO of TDC A/S.

In Q3, TDC Group revenue totalled DKK 6.1bn, a decline of 4.4% on Q3 2012. Compared with Q1 and Q2 2013, this is an improvement; however TDC had expected higher revenue than the level actually achieved as sales of mobile phones were not as high as anticipated and the Nordic market is not performing on par with expectations.

“We expect this trend to continue in Q4, due primarily to developments in Nordic and some uncertainty concerning deliveries of the most popular mobile phones. However, our earnings capacity is so stable that this will not affect our 2013 net income outlook. We expect 2013 to end at the income we stated in the outlook initially published," says Carsten Dilling.

TDC's revenue reached approximately DKK 18.5bn in the first nine months, a decline of approximately DKK 1.1bn compared with Q1 - Q3 2012. Half of the decrease reflected legislation requiring the telecommunications companies to reduce their prices for e.g. mobile telephony.

TDC is currently expecting full-year revenue of approximately DKK 24.5bn - DKK 25.0bn. The Group’s 2013 capital expenses outlook remains at approximately DKK 3.7bn. TDC is also affirming its EBITDA outlook of DKK 10.0bn - DKK 10.2bn and dividend per share of DKK 3.70.