Telenor ASA (ADR) ((TELNY)) has held its Q3 earnings call. Read on for the main highlights of the call.
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The recent earnings call for Telenor ASA (ADR) conveyed a generally positive sentiment, highlighting strong performance in the Nordics and strategic initiatives such as the Vodafone partnership. Despite these positive notes, the company faces challenges in Asia, particularly with data costs and the financial situation of CelcomDigi. Telenor is addressing these challenges while continuing to focus on growth and efficiency.
Nordics Performance
The Nordics region demonstrated robust performance with an 8% increase in EBITDA and a 2.1% rise in service revenues. Norway emerged as a standout performer, achieving a 9.2% growth in EBITDA, underscoring the region’s strong contribution to Telenor’s overall financial health.
Free Cash Flow Growth
Telenor reported a significant increase in free cash flow before mergers and acquisitions, reaching NOK 4.2 billion. This represents a 50% year-on-year growth, showcasing the company’s effective cash management and operational efficiency.
Strategic Procurement Partnership
A new partnership with Vodafone was announced, aimed at creating significant value by combining an annual spend of NOK 300 billion. This strategic move is expected to enhance Telenor’s competitiveness and cost efficiency.
Operational Progress in Asia
In Asia, Telenor Pakistan achieved a 17% year-over-year growth in EBITDA, and Grameenphone returned to growth in both service revenues and EBITDA, indicating positive operational progress in these markets.
Mixed Results in Asia
Despite some successes, Telenor faces challenges in Asia due to macroeconomic conditions and competitive data pricing, particularly in Bangladesh. These factors continue to impact the company’s performance in the region.
CelcomDigi Adjustment
An accounting adjustment of NOK 0.5 billion was made concerning CelcomDigi’s associated 5G network company, reflecting the financial profile adjustments necessary in this partnership.
Competitive Market in Sweden
In Sweden, top line growth remained flat due to ongoing fixed transformation initiatives, and the enterprise segment faced challenges, highlighting the competitive market conditions.
Spectrum Auction Concerns
Upcoming spectrum renewals in Bangladesh pose potential cost challenges, with historically high spectrum pricing being a significant concern for Telenor.
Forward-Looking Guidance
Looking ahead, Telenor has tightened its guidance ranges for 2025, projecting an adjusted EBITDA growth of 5% to 6%. The company maintains its free cash flow outlook at approximately NOK 13 billion, driven by strong performance in the Nordics and strategic partnerships.
In summary, Telenor ASA (ADR) presented a positive outlook during its earnings call, with strong performance in the Nordics and strategic initiatives like the Vodafone partnership. However, challenges in Asia, particularly regarding data costs and the financial situation of CelcomDigi, remain significant. The company is managing these risks while maintaining a focus on growth and efficiency.