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Telenor Group reports ‘solid’ first quarter, says starting to see impact of COVID-19 pandemic

28 Apr 2020

Norway’s Telenor Group has published its financial results for the three months ended 31 March 2020, reporting what it called a ‘solid first quarter financial performance’, though it did note that it is beginning to see the impact of the COVID-19 pandemic.

For the three-month period under review Telenor generated a total turnover of NOK30.953 billion (USD2.93 billion), up 16% year-on-year from NOK26.588 billion, with the company pointing to the consolidation of DNA in Finland as one of the core factors for this increase. On an organic basis, the group said that total revenue had increased by 1.5% in 1Q20. Meanwhile, subscription and traffic revenues amounted to NOK23.867 billion in January-March 2020, up from NOK20.387 billion previously. EBTIDA stood at NOK13.796 billion in the fiscal first quarter, compared to NOK12.175 billion in the corresponding period a year earlier; continued double digit revenue growth in Myanmar and ‘solid revenue and cost performance’ in Norway were said to have been the main drivers to the group’s increase in profitability. Meanwhile, Telenor recorded a net income of NOK698 million in 1Q20, down significantly from the NOK3.822 billion it reported in 1Q19, noting that increased EBITDA had been ‘more than offset by negative net financial items of NOK4.3 billion, driven by mostly unrealised net currency losses of NOK 2.7 billion’, while depreciations increased by NOK1.5 billion primarily as a result of the consolidation of DNA.

Looking ahead, with the impact of the COVID-19 pandemic on its performance beginning to bite from ‘the latter part of March’, it said the global health crisis was affecting roaming revenues and Asian pre-paid markets in particular. With the company saying such effects were continuing into the second quarter, it noted that – while its first quarter results were in line with the external guidance for 2020 it had previously issued – the COVID-19 pandemic has led to increased uncertainty for the remainder of the year. To that end, Telenor said that it now expects lower subscription and traffic revenues and EBITDA growth in FY 2020 than it had previously indicated.

In operational terms, Telenor Group reported a total mobile subscriber base of 185.635 million as at 31 March 2020, up from 176.007 million a year earlier, bolstered by the inclusion of DNA’s customer base and notable subscriber gains in Myanmar (up 4.888 million to 23.283 million at end-March 2020) and Pakistan (up 2.220 million to 46.478 million).

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