Telenor posted strong quarterly revenue growth on Wednesday, but its earnings came in behind analysts’ expectations, despite getting a boost from the telco’s buoyant Myanmar operation.
The Norwegian incumbent posted revenues of 30.18 billion kroner (€3.4 billion) in the three months to the end of June, up 17.5% year-on-year. It attributed the growth to positive currency effects of NOK5.8 billion, a good contribution from Myanmar, and a solid performance in Norway, amongst other things.
EBITDA grew by 11.3% to NOK10.57 billion (€1.2 billion), just shy of the NOK10.77 billion predicted by analysts, according to a Reuters poll.
Telenor said its underlying EBITDA improvement was mainly driven by its operations in Myanmar and in India.
Telenor launched mobile services in Myanmar in September. The unit contributed NOK1.14 billion (€128 million) to group revenues in Q2 and generated positive EBITDA of NOK479 million.
"In Myanmar, performance continues to exceed our expectations," said Telenor CEO Jon Fredrik Baksaas, noting that the business passed 10 million subscribers earlier this month.
"Customers’ strong demand for voice and data services keeps driving revenues and profitability," he said.
Telenor’s domestic market accounted for 21.9% of its overall revenues in Q2, growing by 1.6% to NOK6.61 billion. EBITDA declined by 2.2% to NOK2.72 billion.
"In Norway…customers more than doubled their data usage in the period, which resulted in mobile service revenue growth of 6%," Baksaas said.
The CEO also talked up Telenor’s Thai business DTAC, which faces intense competitive pressure and is working through a turnaround process. DTAC is Telenor’s second-largest revenue-generator, increasing turnover by 26.9% to NOK5.11 billion in Q2.
And he highlighted a "solid performance in Pakistan during an eventful quarter."
"Traffic revenues in Pakistan are fairly stable despite the mandatory biometric verification of the subscriber base that ended in May, resulting in a customer base of 31.6 million at the end of the quarter," Baksaas said. "Sales and market activities have picked up significantly during the second quarter, and consumption trends are encouraging," he added.
Telenor grew revenues in Pakistan by 25% during the quarter to NOK1.95 billion, but EBITDA contracted by just over 3% to NOK639 million.
And in neighbouring India its revenues increased by 33.4% to NOK1.36 billion, and it turned in positive EBITDA of NOK24 million, compared with a NOK106 million loss in the year-ago quarter.
Baksaas confirmed that Telenor will stick by its guidance for the full year. It expects to generate organic revenue growth of 5%-7% and an EBITDA margin, before other income and expenses, of 34%-36%.
