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By Jesus Calero and Elviira Luoma
(Reuters) - Norwegian telecom operator Telenor raised its full-year outlook after it reported third-quarter earnings slightly ahead of market expectations on Wednesday, sending its shares more than 6% higher.
The company said its earnings before interest, tax, depreciation and amortisation (EBITDA), and before other items, fell to 9.21 billion Norwegian crowns ($840 million) in the July to September quarter, from 9.25 billion a year earlier.
That was slightly above analysts' expectations in a consensus poll provided by the company.
Telenor expects organic growth of 3% to 4% in Nordic service revenues, versus low-to-mid single digits previously, and Nordic EBITDA growth of around 6%, up from mid-single digits earlier. It also sees free cash flow of 9.5-10 billion crowns, against 9-10 billion previously.
The company said the outlook reflected its confidence in Nordic growth, driven by upselling strategies and enhanced services, despite macroeconomic setbacks in Bangladesh.
"Following social unrest that led to the toppling of the (Bangladesh) government, we were forced to close our mobile data network," Telenor CEO Sigve Brekke said in the statement.
While the network reopened after the new government took over, key economic sectors remain partially closed and recovery in Bangladesh will take time, he added.
"We see more and more stability," Brekke told Reuters. "We also see that the technocrat government that has been put in place is now following the laws and regulations, so I think that we are moving into a more predictable machine."
Telenor's Bangladesh operations, under the Grameenphone brand, made up nearly 18% of its total revenues in the third quarter.
The Nordics business area saw robust organic service revenue growth, fuelled by its "more-for-more" pricing strategy that justified higher prices and enhanced service offerings.
Telenor plans to sustain its dividends by cutting Nordic capital expenditures and boosting EBITDA through 2025, acting finance chief Kasper Wold Kaarboe told Reuters.
J.P.Morgan analysts said in a note that the guidance hikes to Nordic EBITDA and group cash flow signalled potential upward revisions to market estimates.
($1 = 10.9469 Norwegian crowns)
(By Jesus Calero and Elviira Luoma in Gdansk; Editing by Mrigank Dhaniwala and Milla Nissi)