My apologies to the viewers due to lack of flow on the blog. I was away 2 weeks with business trips. Now I am back to my daily routines.
Lets look into some recent 2023 year end reports; How does it look for Tele2 and JM?
Tele2
The report from Tele2 was perhaps not a newsstand overturner. But at the same time, were we expecting big surprises? Telecom companies can be the most boring thing to own, but many offer nice dividends.
Many key figures landed in line with analysts’ expectations. The dividend is proposed at SEK 6.90/share, which is an increase from SEK 6.80 last year, expectations were SEK 6.82.
Something noteworthy is that Tele2 is launching a savings program with the goal of reducing annual costs by SEK 600 million.
“We will work actively to realize these savings as an effect of changed go-to-market and driven through an internal program that we call the Strategy Execution Program,” writes CEO Kjell Johnsen.
What will be interesting to see now in 2024 is what the investment company Kinnevik chooses to do with its shares. Kinnevik is still the largest owner with 19.77% of the capital. Such a scenario would of course not benefit Tele2.
We must not forget that Tele2 has bond-like properties. The dividend and dividend yield are clearly the main attraction. When interest rates have gone up, this has become a little less attractive, relatively speaking.
The advantage is that concerns about electricity and energy costs now seem to have been blown away. The telecommunications companies have had difficulty dealing with this in the past.
The direct return is a whopping 8% today.
JM
Perhaps it is no surprise that JM came up with a weak report. Reality is starting to catch up with the company very quickly.
The dividend is reduced to SEK 3 per share. However, there is a thought here to call an extra general meeting during the fourth quarter of 2024 to decide on an additional dividend of SEK 3. Last year, JM distributed SEK 14/share.
Unlike last year, when JM came out with a report that surprised the market positively, now the opposite scenario prevails.
“The whole of 2023 has been characterized by a rare weak market. We have to go back to the early 1990s to find comparable challenges,” writes JM’s outgoing CEO Johan Skoglund in the report.
CEO of JM, Johan Skoglund
What was somewhat positive was that JM sold 773 homes during the fourth quarter. That’s up from 462 the year before and above analysts’ expectations of 424.
Here we have to see the situation as a whole. JM as a company is not really a problem. Similar crises have been tackled before. The problem is that it is currently useless to build new in Sweden, even though there is a need.
JM writes that they are currently working for good liquidity in order to be ready when the market turns. The sad thing is that Johan has been CEO now for 20 years and is resigning. Must feel sad to leave in this situation.
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