February 13, 2019 / 7:08 AM / 10 days ago

UPDATE 1-Tele2 sees higher synergies from Com Hem merger, Q4 profit matches forecast

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STOCKHOLM, Feb 13 (Reuters) - Swedish telecom operator Tele2 raised on Wednesday its synergy estimate from the merger with cable TV company Com Hem and posted a core profit in line with expectations.

The company said it now expects annual synergies from the merger with Com Hem of 1.35 billion Swedish crowns ($145.98 million), versus its previous guidance of 900 million crowns, after identifying additional cost savings.

Tele2 also gave a mid-term outlook for low-single digit growth in end-user service revenue and mid-single digit growth of adjusted EBITDA.

The company proposed a dividend of 4.40 crowns per share, up from 4 crowns in 2017.

Tele2 said it aims to distribute the proceeds from the transactions in the Netherlands, where the merger of Tele2 Netherlands and T-Mobile Netherlands closed last month, and Kazakhstan, where Tele2 aims to sell its business.

Tele2 reported fourth-quarter adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of 1.96 billion crowns, up from 1.32 billion crowns a year earlier and roughly matching the 1.95 billion crown mean forecast in a Reuters poll.

It is Tele2’s first earnings report since closing a $3.2 billion deal to buy Com Hem in November, creating a bigger rival to market leader Telia. ($1 = 9.2481 Swedish crowns) (Reporting by Helena Soderpalm, editing by Johannes Hellstrom and Darren Schuettler)

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