Telenor Group: Promising start to the year as digital transformation drive continues

“Entering 2018, I am pleased to see that we continue to grow and renew ourselves. We added close to two million customers in the first quarter; subscription and traffic revenues increased by 1% and EBITDA grew by 10%. Our digital transformation and focused efforts on efficiency improvements continue to deliver significant results. Our performance in Scandinavia was robust, and we continue to see improving trends in developed Asia. After a soft start to the year in Bangladesh and Pakistan, growth picked up during the quarter and we expect revenue growth in those markets to improve going forward.

During the first quarter, we took two important steps in developing Telenor. We announced the disposal of our mobile operations in Central and Eastern Europe, which enables us to focus on developing our businesses in Scandinavia and Asia. We also strengthened digital positions by entering a strategic partnership to develop our financial services business in Pakistan. In Thailand, an important milestone was reached yesterday with the signing of the 2.3 GHz spectrum agreement.

In summary, another solid quarter and we continue our consistent execution of the strategy,” said Telenor Group Chief Executive Officer Sigve Brekke.

Key Figures

Discontinued operations: Telenor India, Hungary, Montenegro & Serbia and Bulgaria, Telenor Common Operation, Telenor Microfinance Bank and Telenor Banka. 

First quarter 2018 summary

• Total reported revenues fell by 2% to NOK 27.1 billion. On an organic basis, subscription and traffic revenues grew 1%.
• Organic EBITDA growth of 10%.
• Reported opex decreased by NOK 0.8 billion. Adjusted for currency effects, the reduction was NOK 0.7 billion or 7%.
• EBITDA before other items was NOK 11.3 billion, corresponding to an EBITDA margin of 41.7%, an increase of 4 percentage points from last year.
• Net income attributable to equity holders of Telenor ASA was NOK 5.0 billion, or NOK 3.35 earnings per share.
• Capex excluding spectrum and licences was NOK 3.1 billion, resulting in a capex to sales ratio of 11%.
• Free cash flow for the quarter was NOK 2.6 billion.

Outlook

• For 2018, we expect an organic subscription and traffic revenue growth of 1-2%, and an organic EBITDA growth of 2-3%. Capex excluding licences and spectrum has been adjusted for the discontinuation of the Central and Eastern European operations, and is now expected to be NOK 17-18 billion.