Telenor Earnings Beat Estimates as Norway, Sweden Sales RiseAdam Ewing
Telenor ASA, the Nordic region’s largest phone company, reported earnings exceeding analysts’ estimates after gains in cable-TV and Internet users in Norway and Sweden boosted revenue.
First-quarter adjusted earnings before interest, taxes, depreciation and amortization rose 10 percent to 9.3 billion kroner ($1.57 billion), the Fornebu, Norway-based carrier said today. Analysts predicted 9.09 billion kroner, the average of estimates compiled by Bloomberg. Sales also beat projections.
Chief Executive Officer Jon Fredrik Baksaas has expanded Telenor’s Nordic TV and Internet businesses as competition from Sweden’s TeliaSonera AB and Denmark’s TDC A/S weighs on mobile prices. Telenor is also adding users in countries such as Bulgaria and Myanmar as demand for wireless services rises in emerging markets.
“It’s a very good performance, with the key points being the improvements delivered in Norwegian mobile performance and the solid developments in Sweden,” said Barry Zeitoune, an analyst at Berenberg Bank in London. It’s now more probable that Telenor will raise its full-year earnings forecast, he said.
Sales climbed 7.3 percent to 26.5 billion kroner, compared with the 26.4 billion-krone average estimate. Net income rose 2 percent to to 3.68 billion kroner.
Telenor shares rose 0.5 percent to 140.8 kroner at 9:06 a.m. in Oslo. They have lost 2.6 percent in 2014, after tripling over the previous five years.
Revenue in Norway increased 1.8 percent as Telenor added wireless subscribers and they spent more, and TV and Internet sales rose. Sales in Sweden rose 14 percent as Telenor gained 237,000 TV customers after buying Tele2 AB’s Internet and cable business. Mobile revenue also increased in both countries.
Sales also climbed in markets including Malaysia, Bangladesh, Pakistan and India.
Telenor had a one-time gain related to the sale of its video-distribution business Conax to Switzerland’s Kudelski SA for about 1.4 billion kroner. The carrier had a one-time cost of about 2 billion kronor related to affiliate VimpelCom Ltd.’s settlement of a dispute in Algeria.
Ebitda as a percentage of sales, excluding some items, will be “stable” this year compared with the 34.5 percent reported for 2013, Telenor reiterated.