Telenor has raised its dividend again and forecast further growth in 2018 after meeting its targets for 2017 results. The Norwegian operator posted annual organic sales growth of 0.7 percent, with a 2.2 percent increase in subscription and traffic revenues, and said it expects the latter to grow 1-2 percent again in 2018.
Total revenues were still down slightly in 2017, while EBITDA improved thanks to cost reductions. In the fourth quarter, Telenor saw negative organic growth of 0.5 percent, which the company blamed on lower handset and international carrier revenues. The company said it was otherwise growing still in Bangladesh, doing well in Hungary and Pakistan and seeing improvement in the Nordic fixed markets.
Subscription and traffic revenues improved 3 percent in Q4, helped by a one-time negative item in Sweden last year, and total revenues increased to NOK 32.093 billion from NOK 31.727 billion a year ago. EBITDA rose to NOK 11.835 billion from NOK 10.649 billion, thanks to another NOK 0.6 billion in cost reductions. The margin was at 36.9 percent versus 33.6 a year earlier. Telenor forecast 1-3 percent organic EBITDA growth in 2018.
Net profit for the year was up sharply thanks to the sale of part of the company's stake in Veon and exit from the Indian market. In Q4, the amount dipped slightly to NOK 2.226 billion from NOK 2.286 billion, after an impairment of NOK 1.7 billion on the marketing unit Tapad and reversal of an impairment of NOK 1.2 billion in Denmark.
Telenor reduced capital expenditure last year by NOK 4.1 billion to NOK 21.3 billion, and during the year, NOK 3.1 billion was invested in spectrum and licences. As a percentage of revenues, capex dropped to 14.6 percent excluding spectrum and licences, from 17.4 percent in 2016. For 2018, the company forecast a further reduction to NOK 18-19 billion excluding spectrum and licences.
Free cash flow more than doubled, both in Q4 and the full year, to respectively NOK 3.327 billion and NOK 24.867 billion. As a result, Telenor raised its dividend to NOK 8.10 from NOK 7.80 last year. The dividend will be split into two tranches of NOK 4.20 and NOK 3.90 per share, to be paid in May and November, respectively. Telenor also plans to renew its share buyback programme at its AGM.
