“We are seeing positive trends for mobile service revenues in the Nordic region, with growth of 4% in the third quarter,” said Sigve Brekke, President and CEO of Telenor Group.
For the Group, high energy prices, particularly in Norway, Denmark and Pakistan, remain a headwind. However, the negative effects are, this quarter, countered by a cancellation of the sim tax provision in Pakistan, resulting in EBITDA growth of 2.5%. Free cash flow was NOK 5 billion, implying cash generation so far this year of NOK 10 billion.
In September, Telenor organized a capital markets day where the strategy and ambitions for the next three years were presented. The Group’s operations and value creation will be concentrated around four business segments: Telenor Nordics, Telenor Asia, Telenor Infrastructure and Telenor Amp. The sale of a 30% stake in the newly created fiber infrastructure company in Norway, which is expected to be completed in early 2023, confirms the company’s execution of this strategy.
“In the Nordics, the growth of value-added services is contributing to mobile revenue growth. We see a continued trend of strong customer demand for secure connectivity in a rapidly increasing digital risk environment,” says Brekke.
Increased data usage was the primary driver of Grameenphone’s services revenue growth of 7% this quarter, which also translated into strong EBITDA growth. In Malaysia, the proposed merger of Digi and Celcom has received authorization from the Securities Commission and should be finalized before the end of the year, after approval by the shareholders’ meetings of the companies.
Regarding the outlook for the year, Telenor maintains the expectation of low single-digit growth in services revenues. Although a significant increase in energy prices is weighing on EBITDA, a positive one-off effect in Pakistan this quarter helps maintain the outlook for organic EBITDA around last year’s level. The capex/sales ratio should be within the previously indicated range of 16-17%.
| Key figures Telenor Group | Third quarter | The first three quarters | Year | ||
| NOK in millions | 2022 | 2021 | 2022 | 2021 | 2021 |
| Revenue | 28,428 | 27,411 | 83,473 | 82,087 | 110,241 |
| Organic revenue growth (%) | 4.5 | 0.3 | 2.4 | 1.0 | 1.2 |
| Service revenue | 21,914 | 21,496 | 64,460 | 63,764 | 84,828 |
| Services revenue organic growth (%) | 2.5 | 0.5 | 1.4 | -0.3 | -0.1 |
| EBITDA before other income and other expenses | 13,059 | 12,856 | 37,221 | 37,418 | 49,162 |
| Organic EBITDA growth (%) | 2.5 | -2.2 | 0.2 | 0.1 | -0.2 |
| EBITDA before other income and other expenses/Revenue (%) | 45.9 | 46.9 | 44.6 | 45.6 | 44.6 |
| Net income attributable to shareholders of Telenor ASA | 1,549 | 2,642 | 7,006 | 942 | 1,528 |
| Capex HT licenses and spectrum | 4,088 | 4,014 | 13,013 | 12,077 | 17,942 |
| Total investments | 4,267 | 4,025 | 15,948 | 14,323 | 22,345 |
| Free cash flow before M&A | 3,955 | 6,169 | 7,319 | 11,286 | 11,015 |
| Total free cash flow | 5,211 | 7,182 | 9,657 | 13,138 | 12,668 |
| Mobile subscriptions – Evolution of the quarter/Total (mill.) | -2.6 | 1.8 | 172.4 | 172.1 | 172.2 |
Third Quarter Summary*
- Total reported revenue was NOK 28.4 billion, an increase of NOK 1.0 billion compared to the same period last year. Services revenue increased 2.5% on an organic basis.
- Reported operating expenses increased by NOK 0.4 billion. Organic opex increased by NOK 0.5 billion.
- Reported EBITDA before other items amounted to NOK 13.1 billion, an increase of 1.6%. Organic EBITDA increased by 2.5%.
- Energy cost increase of NOK 0.4 billion negatively impacted EBITDA development by 3 percentage points, which was more than offset by a one-time effect related to the cancellation Pakistan SIM tax provision of NOK 0.6 billion following a High Court ruling in favor of Telenor Pakistan.
- Capital expenditure excluding licenses and spectrum fees amounted to NOK 4.1 billion, representing a capital expenditure to sales ratio of 14%.
- Net profit attributable to shareholders of Telenor ASA amounted to NOK 1.5 billion for the quarter. The net result was impacted by foreign exchange losses of NOK 2.4 billion, mainly due to the strengthening of the USD against the NOK.
- Total free cash flow was NOK 5.2 billion for the quarter, including NOK 4.0 billion before mergers and acquisitions.
- The leverage ratio decreased to 2.1x from 2.2x at the end of the prior quarter, mainly as free cash flow more than offset negative currency effects.
* Please refer to page 29 in the quarterly report for Ddefinitions and descriptions of aalternative pperformance mmeasures.
Press contacts:
David Fidjeland, Director of Media Relations, Telenor Group
+47 934 67 224 | david.fidjeland@telenor.com
