Telenor has increased its dividend by 4 percent to NOK 8.7 per share, despite a drop in net profit over the past year due to divestments and provisions. Cash flow also turned negative after the acquisition of DNA in Finland. Underlying EBITDA fell 2.6 percent, in line with its outlook, and Telenor said it aims to return the figure to growth of 2-4 percent in the new year. Organic revenue growth is estimated flat to 2 percent higher this year, after a 1.2 percent rise in 2019.
For the fourth quarter of 2019, Telenor reported organic revenues up a stronger 2.9 percent and underlying EBITDA rose 4.6 percent. This was driven by growth in fibre and mobile in Norway, higher subscription and traffic revenues in Myanmar and a return to subscriber growth at Dtac in Thailand for the first time since early 2016. Grameenphone in Bangladesh also continued to grow, and Malaysia's Digi managed a small increase in revenue. Pakistan weighed on results due to lower revenues and higher network costs, and Sweden posted lower revenues again on price pressure, especially in the business segment.
Revenue up, operating costs down
Positive currency effects and the takeover of DNA helped Telenor's total revenues for the quarter increase 17.5 percent to NOK 31.8 billion, and adjusted EBITDA rose 17.4 percent to NOK 11.9 billion. Adjusted for currencies and DNA, Telenor said operating expenses were down 6 percent year-on-year, as it reduced personnel, sales and marketing costs. Over the full year adjusted costs fell 1 percent, mainly due to job cuts in Scandinavia and reductions in Corporate Functions. The new licence operating model in Thailand also helped results, offset by higher network and energy costs at other Asian operations.
Telenor's net profit improved to NOK 1.9 billion in Q4 from NOK 1.2 billion a year ago, when it booked extraordinary costs for the changes in Thailand. This year it took a provision of NOK 0.5 billion for potential bad loans at its microfinance bank in Pakistan and NOK 1.7 billion for liabilities under the court ruling in India on new calculations of regulatory fees. Over the full year, net profit fell to NOK 8.5 billion from NOK 14.7 billion, after the sale of the Eastern European and Indian operations and additional tax charges in Q3 for India.
Negative free cash flow
Free cash flow for the year was a negative NOK 18.8 billion versus a positive NOK 32.0 billion in 2018 due to the takeover of DNA. Capex excluding licences and spectrum rose slightly to NOK 17.4 billion due to the addition of DNA, and Telenor said it expects to spend around 15 percent of revenue this year.
Telenor ended the year with a total of 186 million mobile subscribers, after an increase of 2.6 million in Q4. The operation in Pakistan gained 1.0 million new customers, while Grameenphone and the operation in Myanmar added 0.7 million subscribers each. In addition, Dtac saw customer growth for the first time in almost three years, adding 0.2 million subscriptions.
