Telenor returned to growth in the second quarter. The growth was driven by strong performance in the Nordics combined with a growing subscriber base and increased data consumption in the Asian markets.
Subscription and traffic revenues increased by 2 percent. Combined with progress on the modernisation agenda this resulted in an EBITDA uplift of 4 percent.
In Norway, the decline in fixed legacy revenues are offset by growth in fibre and fixed wireless accesses and mobile service revenues. Improved subscription development in Sweden contributed positively towards stabilisation of the subscription and traffic revenues. Furthermore, Finland and Denmark continued its strong performance, delivering both revenue and EBITDA growth in the quarter.
In Asia, Telenor aims to strengthen the position in our markets and be better positioned for future growth. The merger agreement with Celcom in Malaysia was signed in Q2 and marks the next step towards creating a leading operator in the country. We have an ambition to serve the data revolution in the region and the demand for data contributes to the revenue development in Bangladesh and Pakistan. Domestic market performance in Thailand has stabilised the top-line despite impact from the third wave of the pandemic.
On July 8, Telenor Group announced an agreement to sell Telenor Myanmar. The situation in the country has over the past months deteriorated, posing challenges related to people security, the regulatory environment and compliance. It has not been an easy decision. The commitment to Telenor’s values and responsible business conduct is the reason why we believe this sale is the best possible solution in this situation.
“With the first half of 2021 behind us, and a strong set of numbers for the second quarter, we adjust our expectations for the full year 2021. We expect organic subscription and traffic revenues growth of 0-1 percent, organic EBITDA growth of 0-2 percent and a capex to sales ratio of 15 – 16 percent,” Sigve Brekke, President and CEO, Telenor Group, said.
Second quarter 2021
The Group’s mobile subscriber base grew by 1.7 million. The subscriber base was 170 million at the end of the quarter.
Subscription and traffic revenues increased by 2 percent on an organic basis. Total reported revenues were NOK 27.2 billion, a decrease of NOK 1.8 billion.
Currency adjusted opex decreased by NOK 0.1 billion, or 1 percent. Reported opex decreased by NOK 0.9 billion.
Organic EBITDA increased by 4 percent, as a result of increase in subscription and traffic revenues. Reported EBITDA before other items was NOK 12.4 billion and the EBITDA margin was 45 percent.
Capex excluding licences and spectrum was NOK 4.4 billion, yielding a capex to sales ratio of 16 percent.
Reported net income was NOK 2.2 billion.
Total free cash flow was NOK 2.1 billion.
Leverage increased to 2.0x at the end of the second quarter from 1.8x at the end of the previous quarter mainly due to Myanmar reclassification to discontinued operations and dividend pay-out in June.
Telenor Group announced an agreement to sell its operations in Myanmar.
