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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
COMMUNICATIONS
- Q4 results tomorrow will be the last before new CEO Patrik Hofbauer starts in February.
- Telia updated FY23 guidance at Q3 - Adj-EBITDA growth in “low single digits” from “flat to low single digits” though Structural OCF guidance moved towards the lower half of the guided range to SEK ~7.5bn from SEK 7-9bn as adj-CapEx moved to SEK 13.5bn from SEK 13-14bn
- Consensus for tomorrow is for Q4 adj-EBITDA of SEK 7.45bn (+1% YoY) which would imply a 1.7% contraction for FY23. Q4 Structural Op FCF consensus is broadly in line with guidance of SEK 7.4bn.
- The market sees net debt at SEK 76.6bn, implying an expected leverage ratio of 2.6x against a management target of 2x-2.5x. We see a rolling ratio of 2.5x at Q3 from recent lows of 2x in 2022.
- Noting the announcement yesterday that Telia will book a non-cash impairment of SEK 4.1bn which will impact bottom line earnings but not credit metrics and the reported sale of TV4 for up to SEK 5bn but potentially a low as SEK 3-4bn (as flagged).
- Moody’s affirmed Telia at Baa1[S] in May, noting that the proceeds from their Danish exit in 2024 would see leverage fall towards the middle of the target range. They see a 0.2x reduction in their own leverage measure to 2.7x on closure of the deal against a rating threshold of 2.75x.
- The Telia curve (Baa1/BBB+) wider than the similarly rated Orange (Baa1/BBB+) curve from around 5yrs out. Recent leverage trajectories between the two have been quite different with Orange sticking closely to the management target of 2x.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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