(Bloomberg) — Telenor ASA, Norway’s state owned carrier and biggest operator in the Nordic region, slid as much as 4.4% after its earnings dropped in the second quarter and it cut its full-year outlook amid increased competition in its key markets.
The company posted earnings before interest depreciation and amortization of 11.1 billion kroner ($1.3 billion), missing an estimate of 11.3 billion kroner. Revenue was in line with estimates at 28 billion kroner. Telenor shares dropped more than 4% in early trading in Oslo.
With slow growth in mature markets in the Nordic region and competition at its units across Asia, Oslo-based Telenor said it now sees subscription and traffic revenue “around the 2018 level” versus an earlier outlook for 2% growth. It also predicted “a low single digit” drop in Ebitda, compared to an earlier forecast of 1-3% growth. This takes into account the inclusion of Dtac, an “adjusted outlook from Digi” and a provision in Bangladesh.
Key Insights
In April, Telenor agreed to buy a majority stake in Finnish operator DNA Oyj, further challenging rival Telia’s position in the Nordic region. After chasing growth in Asia and eastern Europe, the company has shifted focus to markets closer to home.Telenor flagged in May that it was in discussions with Axiata to merge operations in Asia, combining their telecom and infrastructure assets to create a company with 300 million customers in nine countries. Capital spending is still expected to be 16-17 billion kroner
Management Comments
“Although organic subscription and traffic revenues declined by 1%, the EBITDA margin was 40% and we saw positive revenue development and effects from efficiency and modernization programs. Our underlying financial performance remains stable,” Chief Executive Officer Sigve Brekke said in a statement.
Know More
Net income in the second quarter was 3.1 billion kroner.Link to report
(Update with share reaction in first paragraph.)
To contact the reporter on this story: Sveinung Sleire in Oslo at [email protected]
To contact the editor responsible for this story: Jonas Bergman at [email protected]
For more articles like this, please visit us at bloomberg.com
©2019 Bloomberg L.P.