Telenor Group’s revenues rise on DNA consolidation, currency effects

16 Jul 2020

Norwegian telecoms giant Telenor Group has published its financial results for the second quarter of 2020, and while it recorded a 15% increase in reported revenues for the period – driven by currency effects of NOK2.8 billion (USD300 million) and the consolidation of DNA in Finland – turnover was down by 4.2% on an organic basis.

For the three months ended 30 June 2020 the group’s reported revenues stood at NOK30.903 billion, up from NOK26.917 billion in the corresponding period a year earlier. Second quarter subscription and traffic revenues, meanwhile, totalled NOK23.753 billion, up from NOK20.480 billion in 2Q19, but representing an organic decline of 3.6% year-on-year, attributable it said to the loss of pre-paid revenues in Asia, as well as roaming revenues.

In 2Q20 Telenor Group’s EBITDA before other items increased by 1% y-o-y in organic terms to NOK14.331 billion, with ‘substantial opex reductions’ said to have mitigated revenue losses. Net income of NOK4.428 billion was reported for the quarter under review, up notably from the NOK2.856 billion in 2Q19, as a result of ‘improved net financial items due to net currency gains of NOK1.5 billion in the quarter, as well as increased profits from discontinued operations given the gain on the disposal of Canal Digital of NOK 1.7 billion’. Group CAPEX (excluding licences, spectrum and leases) was NOK3.8 billion in April-June 2020, down marginally from NOK4.1 billion a year earlier. For FY 2020, Telenor expects a low, single-digit percent decline in subscription and traffic revenues, stable organic EBITDA compared to 2019 and around 13% CAPEX to sales.

In operational terms, Telenor Group reported a consolidated mobile subscriber base of 182.4 million as at the end of June 2020, up from 178.288 million a year earlier but down from 185.6 million three months earlier. Telenor Group said the drop in accesses was ‘entirely explained by substantial customer losses in Asia, almost solely pre-paid customers’.

Commenting on the group’s quarterly performance, Telenor Group President and CEO, Sigve Brekke, said: ‘Our operating model has given us flexibility to manage operations, cost and investments, contributing to an EBITDA growth of 1% and free cash flow of NOK4 billion in the quarter. As expected, lockdowns have affected pre-paid markets in Asia and global roaming revenues negatively. Combined with a reduction in new sales, this led to a decline in organic subscription and traffic revenues of 4%, which was offset by an opex reduction of 12%. The financial results this quarter are positively impacted by the strong performance in our operations in Norway and Finland, while Bangladesh and Pakistan, as expected, remain the most challenged pre-paid markets.’

Norway, Telenor Group