Telenor Swung to 1Q Profit, Backs Fiscal Year 2022 Guidance Despite Headwinds -- Update

By Dominic Chopping

Norwegian telecommunications provider Telenor ASA on Tuesday cautioned that high costs and competition in Asia will remain into the second quarter, though full-year earnings are still seen flat to slightly higher.

The company posted a first-quarter net profit of 6.57 billion Norwegian kroner ($695.8 million), compared with a net loss of NOK3.89 billion a year earlier. Earnings last year were weighed by the NOK6.5 billion impairment of its Myanmar business, and this year were boosted by the NOK1.7 billion disposal of Swedish-noncore assets and a NOK2.5 billion reversal of tax.

Earnings before interest, tax, depreciation and amortization--the company's preferred measure--rose to NOK13.21 billion from NOK12.06 billion, as revenue fell 1.8% to NOK27.72 billion, the company said.

Analysts polled by FactSet had expected Ebitda of NOK12.09 billion and revenue of NOK27.11 billion.

Telenor said the first quarter was weighed on by the transformation of its fixed-line business in Norway, high energy prices and tough competition in Thailand, as well as high project costs. These factors are expected to continue into the next quarter, it said.

"Actions taken are expected to mitigate negative elements, particularly in the second half of the year. We expect a gradual recovery of the Thai market but acknowledge the increased global uncertainty," the company said.

The mobile subscription base grew by a further 800,000 in the first quarter, to 173.0 million.

For 2022 and excluding its Digi unit in Malaysia, Telenor said it still expects low-single-digit growth in service revenue, as well as earnings before interest, tax, depreciation and amortization around the 2021 level or slightly higher, and a capex-to-sales ratio of 16% to 17%.

Telenor expects Ebitda growth to lag revenue development for a few quarters.

Write to Dominic Chopping at [e-mail]

(END) Dow Jones Newswires

May 03, 2022 03:07 ET (07:07 GMT)

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