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Telenor : Norway's Telenor lifts 2020 earnings view after third-quarter beat

10/21/2020 | 05:26am EDT
FILE PHOTO: Telenor's logo is seen in central Belgrade

OSLO (Reuters) - Norway's Telenor raised its full-year earnings guidance after beating third-quarter expectations on Wednesday as cost cuts offset lower subscriber and roaming revenue.

Shares in the telecoms provider, which late on Tuesday sold its headquarters to free up capital, were 3% higher at 0805 GMT, outperforming a 0.2% decline in Oslo's benchmark index.

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) for the July-September quarter rose 4% to 14.6 billion Norwegian crowns ($1.58 billion), topping the 14.1 billion expected by analysts, Refinitiv Eikon data showed.

Telenor, active in nine countries across Europe and Asia, said it expected underlying core earnings (EBITDA) to rise by a low single digit percentage this year, compared with its previous forecast of a flat year-on-year outcome.

The company's operations in Pakistan and Bangladesh saw strong subscriber growth in the quarter, a turnaround from the decline seen in the preceding three months when COVID-19 lockdowns prevented many from topping up pre-paid subscriptions.

"Telenor's third quarter results highlight the strength of our operating model," Chief Executive Officer Sigve Brekke said.

The company cut operating costs by 8% in the quarter, helping to cushion a 2% fall in its underlying subscriber and roaming revenue.

"The very strong cost performance once again from Telenor is driving the good quarter," JP Morgan wrote in a note to clients.

Overall revenue, including from acquired businesses, rose to 30.0 billion crowns from 28.4 billion a year ago, just missing analyst expectations of 30.3 billion.

Telenor maintained a prediction for a low single-digit percentage decline in annual subscription and traffic revenue, as well as a forecast that capital expenditure would amount to around 13% of sales for the full year.

The company's operations in Thailand took a hit from the continued shortfall in tourism revenues, while increased competition in Malaysia and a regulatory re-registration of SIM cards for mobile phones in Myanmar impacted its overall subscriber base.

($1=9.2290 Norwegian crowns)

(Reporting by Terje Solsvik; Editing by Aditya Soni and Mark Potter)

By Terje Solsvik

ę Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
NORWAY OSLO BORS BENCHMARK(TRG) -1.24% 1106.74 Real-time Quote.15.50%
TELENOR ASA -0.62% 143.8 Real-time Quote.-0.82%
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Sales 2021 117 B 13 507 M 13 507 M
Net income 2021 8 846 M 1 020 M 1 020 M
Net Debt 2021 107 B 12 371 M 12 371 M
P/E ratio 2021 25,7x
Yield 2021 6,39%
Capitalization 201 B 23 137 M 23 213 M
EV / Sales 2021 2,63x
EV / Sales 2022 2,55x
Nbr of Employees 18 000
Free-Float 46,0%
Duration : Period :
Telenor ASA Technical Analysis Chart | TEL | NO0010063308 | MarketScreener
Technical analysis trends TELENOR ASA
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus OUTPERFORM
Number of Analysts 21
Average target price 163,00 NOK
Last Close Price 144,70 NOK
Spread / Highest target 34,8%
Spread / Average Target 12,6%
Spread / Lowest Target -4,63%
EPS Revisions
Managers and Directors
Sigve Brekke President & Chief Executive Officer
Tone Hegland Bachke Chief Financial Officer
Gunn WŠrsted Chairman
Ruza Sabanovic Executive VP, Head-Technologies & Services
Jon Erik Reinhardsen Director
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