Telenor trims FY sales outlook as Q3 growth slows

News General Scandinavia 24 OKT 2018
Telenor trims FY sales outlook as Q3 growth slows

Telenor has trimmed its forecast for organic revenue growth in the full year, after a further slowdown in Q3. However, the company expects stronger growth in annual EBITDA, thanks to cost-cutting efforts. 

On both an organic and reported basis, subscription and traffic revenues increased by 0.2 percent in the third quarter. Telenor said it saw continued signs of improvement in Bangladesh and Pakistan, offset by a decline in Myanmar following the entrance of a fourth operator, continued decline in fixed legacy revenues in Norway and fewer subscribers at Dtac in Thailand. Total revenues increased by 0.6 percent to NOK 27.6 billion.

After a 3 percent fall in operating expenses, EBITDA rose 5.6 percent on an organic basis to NOK 12.4 billion in the quarter. The increase was driven by continued opex reductions and reversal of provisions. The EBITDA margin improved by 2 percentage points from last year, closing the quarter at 44.8 percent. 

In the year to date, organic subscription and traffic revenues grew by 0.5 percent and EBITDA was up 5 percent. For the full year, Telenor now expects the revenues flat to 1 percent higher and EBITDA up 3-4 percent. That compares to a previous forecast for organic growth of 1-2 percent in subscription and traffic revenues and 2-3 percent in EBITDA. 

The net profit for Q3 was little changed year-on-year at NOK 5.8 billion. Excluding the gain from selling the operations in Central and Eastern Europe in October, net profit fell to NOK 4.1 billion, after high currency gains in the third quarter last year as well as increased depreciation this quarter. 

Capex excluding licences and spectrum fell to NOK 4.3 billion from NOK 4.7 billion a year ago. Telenor expects to finish the year at around NOK 16-17 billion, excluding spectrum and licence fees. 

Free cash flow for totaled NOK 26.5 billion in Q3 following the divestment in Central and Eastern Europe. Telenor paid a special dividend of NOK 4.40 per share in October with the proceeds from the sale. In addition, Telenor bought back 7.7 million shares during the quarter and is on track to finalise the market purchases of the 2 percent buyback programme before year end. 

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