Telenor swings to profit but misses forecasts

Norwegian telecom provider Telenor A/S (TEL.OS) said Tuesday that it swung to a second-quarter net profit, but fell shy of forecasts, adding that it will continue to simplify its business and increase efficiency.

Telenor said net profit for the period totaled 2.65 billion Norwegian kroner ($326.9 million) from a loss of NOK167 million a year earlier. Earnings last year were weighed by a hefty loss on disposals.

Second-quarter revenue fell to NOK27.50 billion from NOK28.33 billion a year earlier, while the earnings before interest, taxes, depreciation and amortization margin was virtually flat at 41.1% compared with 41.0%.

Analysts polled by FactSet had expected net profit of NOK3.78 billion on revenue of NOK27.66 billion.

"Across our operations, we continue to execute on simplification and increasing efficiency, while maintaining market positions," said Chief Executive Sigve Brekke. "These efforts are still generating good results, with savings now of a more structural nature. Year to date, opex has been reduced by close to NOK1 billion."

The company said it saw robust operations in Scandinavia while in Malaysia it achieved revenue growth for a second consecutive quarter. In Pakistan and Bangladesh Telenor grew its subscriber bases.

Telenor, which is majority-owned by the Norwegian government, said it added 2 million new mobile subscribers to its networks, bringing total mobile subscriptions to 172 million.

The company still expects organic subscription and traffic revenue growth of between 1% and 2% in 2018, and organic Ebitda growth of 2% to 3%. Telenor’s capital expenditure target excluding licenses and spectrum is still seen at NOK17 billion to NOK18 billion.

Write to Dominic Chopping at [email protected]; @domchopping, @WSJNordics

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