Telenor ASA (ADR) ((TELNY)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Telenor ASA’s recent earnings call showcased a strong performance, particularly in the Nordic region, with significant EBITDA growth. The sentiment was largely positive, driven by strategic initiatives and operational efficiencies, although challenges in Asia and increased CapEx expectations were noted. Overall, the positive highlights, especially in the Nordics, suggest a robust strategic position and a promising outlook for the company.
Strong EBITDA Growth in the Nordics
Telenor reported an impressive 12.5% EBITDA growth in the Nordics, with Norway leading the charge with a 16.1% increase. This growth, the highest in over a decade, was attributed to strategic initiatives and operational efficiencies, underscoring the company’s strong foothold in the region.
Increased EPS
The company saw a 33% increase in adjusted EPS for the quarter. This growth reflects the strong EBITDA performance and the positive contributions from associates and joint ventures, highlighting Telenor’s effective financial strategies.
Positive Developments in Asia
Despite facing a challenging environment, Telenor’s operations in Asia showed resilience. True Corp in Thailand reported a positive net profit, and Grameenphone in Bangladesh executed well, contributing positively to the overall results.
Acquisition of GlobalConnect’s Consumer Fiber Business
Telenor announced the acquisition of GlobalConnect’s consumer fiber business in Norway for NOK 6 billion. This strategic move increases their fiber market share from 22% to 29%, strengthening their position in the fiber market.
Raised EBITDA Guidance
Due to strong performance in the first half of the year, Telenor raised its EBITDA growth outlook for the Nordics to high single digits and for the group to mid-single digits, reflecting confidence in continued growth.
Challenges in Asian Markets
In Malaysia, CelcomDigi faces intense competition and pressure from the country’s 5G approach, which is affecting top-line growth. This presents a significant challenge for Telenor in maintaining its market position.
Regulatory Delays in Pakistan
Regulatory clearance for the sale of Telenor Pakistan to PTCL has been delayed, posing risks to 5G investments and digital development in the country, which could impact future growth prospects.
Negative Cash Flow in Asia
Telenor experienced a negative cash flow of NOK 0.2 billion in Asia, primarily due to dividends to non-controlling interests in Grameenphone and a disputed tax case collection in Pakistan, highlighting financial challenges in the region.
Higher CapEx Expectations
The company anticipates higher CapEx due to fiber investments in Finland and resilience investments in Norway. While these are strategic moves, they could potentially impact free cash flow, necessitating careful financial planning.
Forward-Looking Guidance
Looking ahead, Telenor maintains a positive outlook with strong results expected in the second quarter of 2025. The company has raised its EBITDA guidance for the Nordics and the group, while maintaining its top line, CapEx, and free cash flow outlook for the year. Strategic expansions, including significant fiber investments, are expected to drive future growth.
In conclusion, Telenor ASA’s earnings call highlighted a strong performance, particularly in the Nordics, with significant EBITDA growth and strategic acquisitions. While challenges in Asia and increased CapEx expectations present some concerns, the company’s robust strategic position and positive outlook suggest promising future prospects.
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