Telenor increased its annual dividend to NOK 9.0 per share from NOK 8.7 in 2020, after a strong improvement in profits, supported by cost-cutting and divestment proceeds. The company said it aims for stable organic revenues and adjusted EBITDA in 2021, with expected continued pressure on results in Asia due to the weak economic conditions following the pandemic.
In the fourth quarter, revenues fell 2 percent to NOK 30.9 billion, as continued strong performance in Nordic markets was offset by weakness in Thailand and Malaysia. Subscription and traffic revenues were down 3.4 percent on an organic basis to NOK 22.9 billion in Q4 and fell 1.9 percent over the full year.
Telenor said it reduced operating costs, adjusted for currencies and the DNA acquisition, by 7 percent year-on-year. This limited the drop in adjusted EBITDA to 0.2 percent in Q4, for a total of NOK 13.5 billion. Over the full year, the company met its outlook for a small organic increase in adjusted EBITDA, of 1.7 percent to NOK 56.5 billion. The margin rose to 46.0 percent from 44.6 percent in 2019.
Net profit jumped to NOK 7.7 billion in Q4 from NOK 1.8 billion a year earlier. In addition to the cost savings, the company benefited from a one-time gain of NOK 2.1 billion on the sale of its subsidiary Tapad and another gain of NOK 1.2 billion on the sale-leaseback of its headquarters building. Over the full year, net profit more than doubled to NOK 17.3 billion.
Capex accelerated in Q4 to 19 percent of sales, driven by 5G expansion in Norway and Finland and capacity investments in Thailand. For the full year, capex excluding licences and spectrum totaled NOK 16.4 billion, equal to 13 percent of sales, with spending down especially in Asia. Annual free cash flow was a positive NOK 20.9 billion, compared to a negative NOK 19.0 billion in 2019, thanks largely to the capital gains and acquisition of DNA.
Telenor ended the year with a total 181.8 million mobile subscribers, after an increase of 1.5 million in the fourth quarter. This was led by growth in Bangladesh and Pakistan, as well as net additions in Sweden and Denmark, while Myanmar, DNA and Norway lost customers on a quarterly basis.
For the new year, Telenor said it expects economic pressure from the pandemic to continue, affecting results in Asia due to reduced tourism and roaming revenues across the group. With the hope of improvement in the second half of the year, the company is targeting stable adjusted EBITDA and subscription and traffic revenues this year on an organic basis, with capex at 15-16 percent of sales.
