Telenor ASA Earnings Call: Strong Nordic Growth Amid Global Challenges

Telenor ASA (ADR) ((TELNY)) has held its Q1 earnings call. Read on for the main highlights of the call.

Telenor ASA’s recent earnings call painted a picture of robust financial health, with significant growth in the Nordics and accolades for its network performance. However, the company faces hurdles in Bangladesh and Malaysia, alongside regulatory delays in Pakistan.

EBITDA Growth in the Nordics

Telenor’s EBITDA growth in the Nordics reached an impressive 5.8%, propelled by a 3.9% rise in mobile service revenue and a 1% reduction in operating expenses due to transformational efforts. This growth underscores the company’s strong operational efficiency and market position in the region.

Strong Financial Performance

The company reported a free cash flow before mergers and acquisitions of NOK 3 billion in the first quarter, reaffirming its financial outlook for the year. This solid financial performance highlights Telenor’s resilience and strategic financial management.

Recognition of Network Excellence

Telenor’s Nordic mobile networks received top honors from OpenSignal, being named best in all six categories. Additionally, Ookla recognized Telenor as the fastest mobile and 5G network in Norway, cementing its reputation for network excellence.

Positive Development in Pakistan

Despite regulatory challenges, Telenor Pakistan reported a strong performance with a 14% increase in revenue and a 19% growth in EBITDA. This demonstrates the company’s ability to navigate complex regulatory landscapes while maintaining growth.

Challenges in Bangladesh

The macroeconomic environment in Bangladesh remains difficult, with high inflation contributing to an 8% increase in operating expenses and an 8% decline in EBITDA. These challenges highlight the economic pressures faced by Telenor in the region.

Soft Performance in Malaysia

CelcomDigi, Telenor’s Malaysian operation, experienced a soft quarter due to intense competition, impacting the overall performance. This reflects the competitive dynamics in the Malaysian telecommunications market.

Regulatory Delays in Pakistan Divestment

Telenor is experiencing delays in obtaining regulatory approvals for its divestment in Pakistan, pushing the expected transaction closure to the second half of 2025. This delay underscores the complexities involved in international regulatory processes.

Impact of VAT Case in Norway

A VAT case in Norway affected service revenue growth, which would have been 3.1% without the provision related to the case. This highlights the impact of legal and regulatory issues on financial performance.

Forward-Looking Guidance

Telenor maintained its financial outlook for fiscal year 2025, emphasizing key performance metrics. The Nordics achieved notable EBITDA growth, and the group’s service revenues rose by 2.1% year-on-year. In Asia, contributions from Pakistan and Thailand were positive, despite ongoing challenges in Bangladesh. The company also highlighted its strategic focus on digital infrastructure, emerging customer needs, and potential in the defense and AI sectors.

In summary, Telenor ASA’s earnings call highlighted a strong financial performance, particularly in the Nordics, and recognition for its network excellence. However, challenges in Bangladesh and Malaysia, along with regulatory delays in Pakistan, present hurdles. The company’s forward-looking guidance remains optimistic, focusing on strategic growth areas and emerging technologies.