Norway's Telenor raises annual outlook as Asian markets expand

July 23, 2021: Telenor raised its full-year revenue outlook on Tuesday as the Norwegian telecom operator expects Asian markets to gradually recover from the effects of the pandemic in the second half of the year, sending its shares up 4%.

The company also saw growth in subscribers in countries such as Bangladesh and Pakistan as more people turned to mobile devices during the pandemic. However, currency headwinds led to the company posting weaker-than-expected quarterly earnings.

Telenor added 1.3 million customers in Bangladesh and 300,000 users in Pakistan, dwarfing 37,000 new additions in Sweden, Finland and Denmark.

"A lot of these customers are coming to data use for the first time and in markets like Pakistan and Bangladesh still only 50% of the customers are using data," CEO Sigve Brekke said in an interview.

"In our Asian markets our data revenue has increased 20% over that the last one and half years and this is because people now are really starting to use data," he said.

The company, which plans to sell its Myanmar telecom assets, now expects organic subscription and traffic revenue growth of 0-1% and organic EBITDA growth of 0-2%, up from a previous forecast of maintaining the 2020 level. Telenor kept its forecast for the capex-to-sales ratio unchanged at 15-16%.

Telenor, which serves 170 million customers in nine countries across Europe and Asia, wrote off the value of its Myanmar operations earlier this year following a military coup, and the business is now excluded from its reporting.

Citing difficulties of operating under the military junta, Telenor in July agreed to sell its business there to Lebanese investment firm M1 Group for $105 million.

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) for April-June slumped to 12.35 billion Norwegian crowns ($1.38 billion), from 13.18 billion crowns a year earlier. Analysts in a company-compiled poll, on average, had expected 12.7 billion crowns.

Telenor said negative currency effects, however, offset an underlying improvement by decreasing its EBITDA by 1.6 billion crowns.

Reuters