Telenor reported a return to organic revenue and EBITDA growth in the second quarter, following its decision to exit the Myanmar market. The company said a strong performance in the Nordics combined with a growing subscriber base and increased data consumption in the Asian markets led to a 2.1 percent increase in organic subscription and traffic revenues and 3.6 percent organic EBITDA growth.
As a result, the company upgraded its full-year outlook slightly. It now expects 0-1 percent organic growth in subscription and traffic revenues and a 0-2 percent increase in underlying EBITDA. Telenor said that it expects a gradual recovery in Asian markets in the second half of the year.
Telenor added 1.7 million new mobile subscribers during the quarter, led by an increase of 1.3 million at Grameenphone in Bangladesh. Almost all the countries reported positive growth, apart from small declines in Malaysia and Norway.
Underlying subscription and traffic revenues rose the most in Pakistan (+11%), followed by Bangladesh with 8 percent year-on-year growth, Finland and Demark up 3 percent, and Malaysia growing 2 percent. Dtac in Thailand remained under pressure from the pandemic effects and fell 2 percent, while Telenor Norway and Sweden's revenues were flat.
The higher sales and marketing costs associated with top-line growth were offset by reductions in operations and maintenance costs. This led to a NOK 0.9 percent reduction in operating costs, equal to NOK 0.1 billion less excluding currency effects. In the year to date, Telenor has reduced adjusted opex by NOK 0.7 billion, contributing to the improvement in EBITDA.
Reported revenues were still down by around NOK 1.8 billion year-on-year to NOK 27.2 billion due to negative forex effects, and adjusted EBITDA dropped to NOK 12.4 billion from NOK 13.2 billion a year ago. Net income roughly halved to NOK 2.2 billion, as higher financial costs offset a drop in taxes and the company booked a gain of NOK 1.7 billion a year earlier on the sale of Canal Digital.
Capex exclusing spectrum and licences rose to NOK 4.4 billion, or 16 percent of revenues, from NOK 3.7 billion a year ago. This is in line with the outlook for a capex to sales ratio of 15-16 percent over the full year. Telenor said investment went to 5G roll-out in Norway and Finland, fibre investments in Norway, network capacity and coverage expansion in Thailand, as well as 4G expansion in Bangladesh.
