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Telenor Q4 lags forecasts, sees flat to slightly higher 2022 earnings

Randy Mancini 31 Feb 2
FILE PHOTO: Telenor's logo is seen in central Belgrade
FILE PHOTO: Telenor's logo is seen in central Belgrade, Serbia, March 21, 2018. REUTERS/Marko Djurica

February 2, 2022

OSLO (Reuters) – Norway’s Telenor said on Wednesday it expects its earnings to be largely flat or slightly higher in 2022 compared to last year, as it posted quarterly profits below forecasts.

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) for October-December fell 6.5% year-on-year to 11.7 billion Norwegian crowns ($1.33 billion), while analysts in a poll on average had expected 12.2 billion.

The company’s overall revenue declined by 4.8% in 2021, reflecting the pending sale of its Myanmar operation, while adjusted for this it increased by 1.2%, it added.

“Entering 2022, we will maintain our focus on returning to growth,” Chief Executive Officer Sigve Brekke said in a statement.

Expansion will come from Telenor’s push into cloud and 5G technology, dubbed “beyond connectivity”, as well as from planned tie-ups in Thailand,and Malaysia, and continued development of its Nordic infrastructure, the CEO added.

Telenor proposed a dividend of 9.30 crowns per share, compared to 9.0 crowns a year earlier and in line with analysts’ median expectation in the company-provided earnings poll.

The COVID-19 pandemic continues to hamper the group’s revenue in Asia and the overall economic impact is most felt in Thailand, while subscription revenues in Malaysia has also taken a hit, the firm said.

The Telenor group, which has 172 million subscribers and gets about half its revenue from Asia and the rest from the Nordic region, expects “low single digit” growth in its organic service revenue in 2022, it added.

Capital expenditure is expected to amount to 16-17% of sales this year, it said.

Telenor last year decided to quit Myanmar following a military coup, booking a large write-off. A sale of the business is still pending final approval.

Telenor’s share price has risen 5.3% year-to-date, outperforming a 0.9% decline in Norway’s benchmark stock index.

($1 = 8.8256 Norwegian crowns)

(Reporting by Victoria Klesty, Editing by Terje Solsvik and Shailesh Kuber)