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On Tuesday morning, Telenor released accounting figures for the fourth quarter. In the last three months of the year, the company had a turnover of NOK 30.9 billion and achieved an EBITDA before other items of NOK 13.5 billion. Profit before tax ended at DKK 10.2 billion.
In advance, analysts expected a turnover of NOK 31.4 billion in the quarter and an ebitda before other items of NOK 13.8 billion. Shows figures obtained from Infront, according to TDN Direkt. Both sales and EBITDA were therefore weaker than expected in advance.
In the same period of 2019, the revenue ended at NOK 31.7 billion, that is, around NOK 800 million more than in the fourth quarter of 2020.
– At the group level, subscription and traffic revenue fell 3 percent, but good cost and investment control resulted in stable EBITDA and improved cash flow, CEO Sigve Brekke says in a press release.
Telenor expects the pandemic to continue to affect 2021, especially in Asia.
– For 2021, we expect subscription and traffic revenue and EBITDA at roughly the same level as in 2020. Operating investments are expected to account for 15–16 percent of operating revenue, says Brekke.
Telenor proposes a dividend of NOK 9 per share for 2020. This corresponds to a total of NOK 12.6 billion to be distributed to shareholders. The dividend will be distributed in two installments, NOK 5 per share in June and NOK 4 per share in October.
Top line fault
On Tuesday, CEO Sigve Brekke presented the figures and outlook for 2021. It comes a day after the military coup in Myanmar, where Telenor is among the largest mobile operators in the country. Telenor’s mobile network in the country was suddenly partially closed.
Telenor entered Myanmar in 2014.
– We have been part of the democratization process in Myanmar. Sad to see a setback. I hope this has a peaceful solution. We do everything we can to keep our employees safe, says Brekke.
Telenor is also noticing the corona pandemic, even though the semi-state telecommunications group has not been greatly affected.
It is especially the loss of tourists that Telenor is struggling with. Fewer people from other countries visit Telenor’s mobile network where the group has operations. This applies, for example, in countries like Thailand, where tourist traffic has almost been disrupted as a result of the pandemic. Which in turn leads to lower operating income for Telenor’s mobile companies in the country.
– The biggest uncertainty is the duration of the crown crisis. Unfortunately, we are now seeing the second wave in Asia and it will be a while before the market returns, says Brekke.
Challenges in Asia
For Telenor’s subsidiary in Thailand, Dtac, local currency traffic and subscription revenue fell 9 percent in the fourth quarter despite an increase of 173,000 new customers. The subsidiary achieved operating income of NOK 6.044 million in the fourth quarter compared to NOK 6.429 million in the same period last year.
Dtac achieved an operating profit in the fourth quarter of NOK 255 million in the period, compared to NOK 524 million in the fourth quarter of 2019.
Sales are also falling at Telenor’s Malaysian subsidiary Digi. Traffic and subscription revenues were down four percent in local currency in the fourth quarter compared to the same period last year.
Digi had operating income of NOK 3.429 million in the fourth quarter of 2020, compared to NOK 3.663 million in 2019, and achieved a somewhat weaker operating profit before depreciation of NOK 1694 million against 1784 million the previous year.
– Strong competition and the ripple effects of the pandemic have put pressure on revenues in Asia, especially Thailand and Malaysia, Telenor writes on developments in the countries.
Income is also being reduced in Telenor’s “dairy cow”, Grameenphone in Bangladesh. The company’s traffic and subscription revenue fell three percent in local currency and the EBITDA result fell by four percent. At the same time, the company increased the number of clients by 1,445 million to 79,037 million clients during the quarter.
But the company is still making a lot of money. Of the operating income of NOK 3,693 million, the company made an operating profit before depreciation of NOK 2,341 million. This gives an EBITDA margin of 63.4 percent.(Terms)Copyright Dagens Næringsliv AS and / or our suppliers. We would like you to share our cases via a link, which leads directly to our pages. Copying or other use of all or part of the content may only be done with written permission or as permitted by law. For more terms, see here.
