Telenor's Robust Q3 Performance Amid Global Challenges
Telenor's Strong Third Quarter Performance
Telenor has recently reported a noteworthy performance for the third quarter, highlighting a resilient growth trajectory. The service revenues have seen a year-over-year rise of 2.7 percent, accompanied by an impressive 5.4 percent increase in adjusted EBITDA. Furthermore, the free cash flow before mergers and acquisitions has surged by 50 percent compared to the same period last year, prompting a more optimistic outlook for the upcoming year.
Key Highlights from the Third Quarter
During the third quarter, the company's achievements were substantial, with service revenues amounting to NOK 16.3 billion, while adjusted EBITDA reached NOK 9.5 billion. Moreover, free cash flow before mergers and acquisitions stood at NOK 4.2 billion. Over the year thus far, Telenor Group has successfully amassed an adjusted EBITDA totaling NOK 27.5 billion and a free cash flow of NOK 8.8 billion.
The Nordic Region: A Pillar of Growth
The Nordic sector has emerged as a vital growth engine for Telenor. The region reported 2.1 percent organic growth in service revenues, with an impressive 8.0 percent increase in adjusted EBITDA. Such growth is primarily driven by solid service revenue increases, heightened roaming revenues from Lyse Tele in Norway, and significant cost-cutting measures implemented across operations.
Addressing Challenges in Asia
While Telenor's growth in Asia has seen a 4.1 percent rise in adjusted EBITDA, the company is mindful of possible challenges posed by spectrum and data-related expenses, which could impact cash flows in the short to medium term. Despite facing persistent market difficulties, Grameenphone made a commendable return to growth this quarter. Similarly, Telenor Pakistan enjoyed strong service revenue growth, resulting in a notable 17 percent uptick in EBITDA. Additionally, the company has achieved a critical regulatory milestone with the approval for the sale of Telenor Pakistan, marking a pivotal step in its exit strategy from the market.
Technological and Security Challenges in the Nordics
The Nordic region is currently experiencing several challenges, including geopolitical tensions, extreme weather conditions, and an increasing frequency of sophisticated cyberattacks. A recent survey indicated that one in three Norwegians fears that a major digital attack could disrupt essential societal functions. Telenor's employees are at the forefront of combating these evolving digital threats, continuously investing in advanced security solutions to ensure customer protection.
In response to these challenges, Telenor's latest Nordic Security Report outlines various scenarios that could threaten company and societal resilience, including cyberattacks and organized online crime. The report emphasizes the necessity of digital preparedness in today's landscape.
Exciting Developments in Q3
In a significant development, Telenor has partnered with Vodafone to create a global strategic procurement alliance. This collaboration aims to leverage a combined annual expenditure exceeding EUR 26 billion, enhancing supply chain resilience and driving efficiency. Telenor's Finnish subsidiary, KNL, has also secured EUR 15 million in Nordic defense contracts to support secure communication for military operations.
The acquisition of GlobalConnect’s consumer operations in Norway for NOK 6 billion is set to bolster Telenor's market share from 22 percent to 29 percent, adding approximately 140,000 fiber customers. Additionally, a deal was finalized to sell its 50 percent share in Allente to Viaplay for SEK 1.1 billion, further streamlining Telenor's portfolio.
According to CEO Benedicte Schilbred Fasmer, these initiatives are critical in fortifying core infrastructure and maximizing growth opportunities through strategic partnerships and advanced technology.
Looking Ahead: Financial Forecast
The financial outlook for Telenor in the coming year appears promising. The company is forecasting 2-3 percent organic growth in Nordic service revenues, adjusting its projection from a previous estimate of low single digits. The adjusted EBITDA in the Nordics is anticipated to rise by 8-9 percent while maintaining a consistent capex ratio at around 14 percent of revenues. For the entire group, adjusted EBITDA is expected to grow by 5-6 percent, and the free cash flow before mergers and acquisitions is projected to remain unchanged at approximately NOK 13 billion.
Contact Information for Media Inquiries
For further assistance, please reach out to the following contacts:
David Fidjeland, Director Media Relations, mobile +47 93 46 72 24
Frank Maaø, SVP Capital Markets and Investor Relations, mobile +47 91 67 40 45
Frequently Asked Questions
What are Telenor's Q3 financial highlights?
Telenor's third-quarter highlights include service revenues of NOK 16.3 billion and adjusted EBITDA of NOK 9.5 billion.
How is Telenor performing in the Nordic region?
The Nordic region has shown strength with 2.1% organic growth in service revenues and an 8.0% increase in adjusted EBITDA.
What challenges is Telenor facing in Asia?
In Asia, Telenor is encountering headwinds from spectrum and data-related expenses that could impact cash flows.
What initiatives is Telenor taking to address cybersecurity?
Telenor is investing in advanced security solutions and has published a Nordic Security Report addressing key vulnerabilities.
What are Telenor's growth projections for 2025?
Telenor forecasts 2-3% organic growth in Nordic service revenues and 5-6% for the group, with free cash flow expected around NOK 13 billion.
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