Thursday, 27 July 2017

Telenor ups guidance after strong Q2

By Nick Wood, Total Telecom
Monday 17 July 17

Operator swings to loss on Veon sell-off as CEO Sigve Brekke hails progress of simplification plan.

Telenor on Monday raised its full-year guidance after reporting strong earnings growth during the second quarter. The Norwegian incumbent attributed the performance to a reduction in costs resulting from its simplification programme and revenue growth driven by its Bangladeshi unit…

Telenor on Monday raised its full-year guidance after reporting strong earnings growth during the second quarter.

The Norwegian incumbent attributed the performance to a reduction in costs resulting from its simplification programme and revenue growth driven by its Bangladeshi unit, Grameenphone.

"At the capital markets day in February, we shared our strategic ambitions towards 2020, highlighting continued growth, improved efficiency and simplification as key drivers for value creation," said Telenor CEO Sigve Brekke. "I am pleased to see that we have taken several steps during the first six months of the year to execute on this strategy."

Revenue for the three months to 30 June rose to 31.47 billion kroner (€3.36 billion) from NOK30.93 billion in Q2 2016. Grameenphone was the standout performer, growing revenues to NOK3.43 billion from NOK2.97 billion.

An uptick in revenue, coupled with a NOK600 million of savings, helped to drive EBITDA up 11.76% to NOK12.72 billion. Telenor's EBITDA margin expanded to 40.4% from 36.8% in the corresponding quarter last year.

"As a result of the achievements in the first half of the year, we are stepping up our efficiency ambitions and raise the EBITDA margin guidance for 2017," said Brekke.

Telenor now expects its EBITDA margin for 2017 to come in at 38%-39%, compared to its earlier forecast of 37%.

The sheen was taken off Telenor's results, however, by impairments stemming from the sale of its shares in Veon, the telco formerly known as VimpelCom. That led to Telenor swinging to a group net loss of NOK167 million, compared to a year-earlier profit of NOK1.11 billion.

As a result of the sell-off, Telenor no longer recognises Veon as an associated company.

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