Telenor Third-Quarter Ebitda Rises on Norway, Sweden

Telenor ASA (TEL), the Nordic region’s largest phone operator by revenue, reported earnings that beat analyst estimates, helped by improving sales in its home market. The shares rose the most in almost four months.

Third-quarter earnings before interest, taxes, depreciation and amortization rose 2.5 percent to 8.53 billion kroner ($1.49 billion), boosted by higher mobile revenue and increasing subscriptions in Norway and Sweden, Telenor said today in a statement. That beat the 8.43 billion-kroner average estimate of 19 analysts surveyed by Bloomberg.

Chief Executive Officer Jon Fredrik Baksaas is expanding the Fornebu, Norway-based company’s wireless network in its home markets to fend off competitors and boost revenue. Telenor said last month it plans to find savings of 5 billion kroner over four years. Telenor is rolling out a faster 4G wireless network in Norway to cover 90 percent of the population in 2015.

“The beat in the Nordics is particularly positive,” Markus Bjerke, an analyst at Arctic Securities ASA in Oslo, said in an e-mail. He upgraded his recommendation on the shares to buy from hold.

Telenor shares rose as much as 4.7 percent, the biggest intraday jump since June 27. The stock was up 4.6 percent at 109.1 kroner as of 9:53 a.m. in Oslo, bringing the advance to 11 percent this year.

Malaysia Growth

Revenue advanced 2.5 percent to 25.3 billion kroner, compared with an average estimate of 25.4 billion kroner.

Telenor’s Malaysian division DiGi yesterday reported third- quarter sales rose 8.4 percent, while DTAC in Thailand boosted revenue 12 percent. Sales at Grameenphone, Telenor’s Bangladesh business, slipped 1 percent, while the unit added 1.66 million new subscribers in the quarter.

Telenor said full-year sales will increase about 4 percent, compared with a previous forecast for growth of more than 4 percent. It reiterated a forecast for adjusted full-year earnings excluding interest, taxes, depreciation and amortization of 35 percent to 36 percent of sales.

The adjusted Ebitda margin in Norway increased to 46.2 percent from 42.9 percent a year earlier, while the margin in Sweden climbed to 29.6 percent from 27.3 percent. Mobile subscriptions increased by 63,000 in the two countries.

Net income rose to 3.65 billion kroner from 2.59 billion kroner a year earlier. Analysts had estimated 3.4 billion, in a Bloomberg survey.

Last week, Telenor submitted an application for pre- qualification in an auction of wireless frequencies in India. Telenor reached a deal with its partner Unitech Ltd. (UT) that allows it to move the business of its Indian joint venture to a new company so it could participate in the auction. India will sell about $7 billion in airwaves starting Nov. 12 and Telenor must bid to remain active in the world’s second-largest mobile market.

Swedish competitor TeliaSonera AB (TLSN) said on Oct. 17 it plans to cut 2,000 jobs, equivalent to 7 percent of the workforce, to improve profitability.

To contact the reporter on this story: Adam Ewing in Stockholm at aewing5@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

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