Telenor Earnings Exceed Estimates on Nordic Wireless Demandby
Wireless customers spending more on video, music streaming
Biggest Nordic phone carrier also seeks growth beyond Norway
Telenor ASA, the Nordic region’s largest phone company, reported first-quarter earnings topping analysts’ estimates as demand for wireless data access in its home market helped offset declining sales in Thailand and Malaysia.
Adjusted earnings before interest, taxes, depreciation and amortization rose 8.2 percent to 11.7 billion kroner ($1.4 billion), the Norwegian government-controlled carrier said in a statement Wednesday. Analysts predicted 11.1 billion kroner on average.
Telenor is depending on demand for wireless Web access in its home country, which makes up about a fifth of revenue, to offset stalling sales in Thailand and Malaysia and its Danish business, which it failed to merge with Telia Company AB’s local arm. Phone bills in Norway increased as customers opted for subscriptions with larger data volumes -- and Chief Executive Officer Sigve Brekke said there’s room for growth.
“Norwegian customers are using only 600 megabytes a month on data whereas our customers in Sweden are using 1.3 gigabytes -- that tells me there is an up-sale opportunity here,” Brekke said in an interview.
Shares of Telenor rose 0.4 percent to 136.2 kroner at 1:45 p.m. in Oslo, valuing the carrier at 204 billion kroner. The stock has fallen 8.2 percent this year.
The Norwegian carrier is in talks with possible bidders to sell its percent stake in VimpelCom Ltd., the wireless carrier that agreed to pay a near-record $795 million to settle U.S. and Dutch claims it bribed officials to win business in Uzbekistan.
The scandal led Norway’s government, which owns 54 percent of Telenor, to fire the carrier’s then chairman, and a former chief executive officer who was advising the board left because of the investigation. Chief Financial Officer Richard Olav Aa and General Counsel Pal Wien Espen were also relieved of their duties until there’s greater clarity on the corruption probe, Telenor said Nov. 12.
Sales rose 5 percent to 33 billion kroner, compared with the average analyst estimate of 33.1 billion kroner. Revenue in Thailand slipped 3.4 percent to 5.26 billion kroner, while sales in Malaysia fell 11 percent in the first three months. Total revenue in Norway fell 4.4 percent over the year to 6.3 billion kroner, hurt by the landline business, while sales in Sweden increased 4.6 percent.
Ebitda rose 24 percent in Bangladesh, while earnings in Myanmar more than quadrupled to 718 million kroner as the carrier added 1.8 million new mobile subscribers.
Telenor reiterated it expects an adjusted Ebitda margin of 33 percent to 34 percent and organic sales growth of 2 percent to 4 percent this year, excluding acquisitions, asset sales and currency fluctuations.