Telenor revises full year guidance, reports solid revenue growth in 3Q15

28 Oct 2015

Norway’s Telenor Group reported what it called ‘solid’ revenues for the three-month period ended 30 September 2015, though the withdrawal of plans for a merger of its Danish subsidiary with rival Telia Denmark saw it revise its full year guidance.

In the third quarter of 2015 Telenor Group generated a total turnover of NOK31.836 billion (USD3.88 billion), representing growth of 15% year-on-year in reported terms, while on an organic basis revenues were up by 4% against 3Q14, with this increase said to have been ‘entirely driven by growth in core mobile revenues’. EBITDA before other items totalled NOK11.848 billion in the period under review (3Q14: NOK10.263 billion), with the underlying EBITDA improvement said to have been mainly driven by operations in Myanmar and Pakistan. The group’s EBITDA margin meanwhile remained stable at 37.2%. In line with previous announcements by the company, Telenor Group recorded a NOK5.4 billion non-cash impairment charge in 3Q15 as a result of the planned sale of its stake in Vimpelcom. As a result, the group registered a net loss of NOK1.770 billion in this latest quarter, compared with a net profit of NOK2.586 billion a year earlier. Adjusted for the Vimpelcom impairment, however, Telenor Group noted that net income was NOK3.6 billion in 3Q15. Capital expenditures in the three months to 30 September 2015 meanwhile totalled NOK5.705 billion.

With regards to the company’s revised annual guidance, Telenor Group has said it now expects organic revenue growth of around 5%, compared with an earlier forecast of between 5% and 7%; year-to-date organic revenue growth was 5.7% at end-September 2015. Meanwhile, the group’s EBITDA margin is now expected to be between 34% and 35% (previously 34%-36%), though the CAPEX/sales ratio forecast has been maintained at between 17% and 19%.

In operational terms, at the end of September 2015 Telenor Group reported a total mobile subscriber base of 196.184 million, representing year-on-year growth of 9.6% against the 179.008 million accesses it had on its books a year earlier. Notable gains were made in India, where the group’s subsidiary added close to 6.5 million customers in the year to end-September 2015 to bring its total to 40.855 million, while in Myanmar, where services were launched just a year earlier, some 11.793 million customers had signed up by the end of the reporting period.

Commenting on the quarterly performance, Sigve Brekke, Telenor Group President and CEO, said: ‘We report solid third-quarter results with 4% organic revenue growth and 6% organic EBITDA growth. More than five million new customers connected to Telenor, and I am pleased to see that almost 200 million people are using our services. We witness strong growth in data consumption across our markets. Going forward, it is of utmost importance that we monetise this growth in order to secure healthy returns on our significant investments.’

Norway, Telenor Group