Tele2 Croatia's results better than expected - 8% increase

Third largest domestic telecommunications operator in Croatia Tele2 achieved 4 percent sales growth to 354 million Swedish crowns in the first quarter of 2017, according to the latest business results published in the business results for the first quarter of this year of Tele2 AB, Sweden's owner of the company in Croatia.

The profit before interest, tax, amortization and depreciation (EBITDA) increased by as much as 73 percent from 11 million Swedish crowns in the first quarter of 2016 to 19 million Swedish crowns in the first quarter of this year.

Profit before interest and tax (EBIT) continues to be negative and amounts to 2 million Swedish crowns, which is a decrease of the negative EBIT compared to 6 million as recorded in the same period last year.

The number of users of Tele2 Croatia increased by 10 thousand at the end of the first quarter of this year to 788 thousand, while in the first quarter the number of users decreased by 13 thousand, according to business results.

When revenues are viewed by segments, revenue from customers grew by 12 million Swedish crowns to 214 million, while wholesale revenue remained stable at 46 million Swedish crowns. Revenue from services grew to 260 million Swedish crowns. Tele2 Croatia's strong growth in revenue reached 94 million Swedish crowns in the device sales segment, which is a big increase from 68 million in the first quarter of last year, i.e. as much as 38.24 percent.

In the first quarter of this year, after having invested heavily during 2015 and early 2016, capital investments of Tele2 Croatia were strongly reduced. So, in the first quarter of this year, only 7 million Swedish crowns were invested compared to the first quarter of last year when the investments amounted to 53 million Swedish crowns.

According to business results, it is apparent that Tele2 Croatia also reported potential liabilities of 123 million Swedish crowns reported in business results as contingent liabilities and assets, while such liabilities were not outstanding at the end of the first quarter of 2016. As explained in Tele2 AB, such a situation is the result of problems in Agrokor and its company Tisak. However, Tele2 say they expect Tisak to solve the problems and that Tele2 will not be forced to pay this debt to banks.