Telenor ASA (TELNF) Q3 2024 Earnings Call Highlights: Navigating Growth in the Nordics Amidst ...

GuruFocus News
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In This Article:

  • Free Cash Flow: NOK2.8 billion in Q3; NOK8.3 billion year-to-date.

  • Nordics EBITDA Growth: Approximately 6% expected for the full year.

  • Group Service Revenue Growth: 2.1% in Q3.

  • Nordics Service Revenue Growth: 4% in Q3.

  • Asia Service Revenue Contraction: 1.2% in Q3.

  • Group EBITDA Growth: 1.8% in Q3.

  • EPS: NOK2.39 in Q3.

  • Net Interest-Bearing Debt: NOK83.5 billion.

  • Net Leverage Ratio: 2.3 times.

  • CapEx to Sales Ratio: 14% in Q3.

Release Date: October 30, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Telenor ASA (TELNF) reported a steady financial performance with a 5% growth in the Nordics.

  • The company generated a free cash flow of NOK2.8 billion in the third quarter, totaling NOK8.3 billion year-to-date.

  • Telenor ASA (TELNF) has tightened its 2024 financial outlook, indicating an EBITDA growth for the Nordics of around 6% for the full year.

  • The transformation program is progressing well, with expectations of lower OpEx going into the fourth quarter and further into 2025.

  • The company is seeing positive net subscriber additions in all four Nordic country operations, with close to 60,000 net subscribers in the quarter.

Negative Points

  • Telenor ASA (TELNF) faced challenges in Bangladesh due to social unrest, leading to a 10% drop in daily revenues below trends in the latter half of Q3.

  • The macro headwinds in Bangladesh have impacted the overall group growth, with a negative 3% topline growth in the region.

  • Asia service revenues contracted by 1.2% and EBITDA decreased by 3% in the third quarter, primarily due to the situation in Bangladesh.

  • The company anticipates a potential delay in the closing of the Pakistan divestment process into early next year.

  • There is uncertainty regarding the exact timing of CapEx payments, which could impact cash flow in Q4 or Q1 next year.

Q & A Highlights

Q: Can you elaborate on the impact of the Bangladesh situation on your 2025 guidance and the expected recovery timeline? A: We see early signs of economic recovery in Bangladesh, with October showing improvement over September. The recovery could take 2-3 quarters or up to a year. We aim to protect cash flow by managing OpEx and CapEx. Despite the challenges, we remain confident in our ability to meet our cash flow targets for dividends next year. (Sigve Brekke, CEO; Kasper Kaarbo, Acting CFO)

Q: How are you addressing the competitive dynamics in the fixed broadband space in Norway, especially with cable losses? A: We are focusing on areas with limited overbuild and exploring wholesale opportunities to access fiber customers. The upcoming regulatory changes will allow us to access more fixed-line customers and potentially acquire smaller players. We remain committed to maintaining our position in the fixed broadband market. (Sigve Brekke, CEO; Kasper Kaarbo, Acting CFO)

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