Telenor warned uncertainty surrounding the Covid-19 (coronavirus) situation would likely hit its financials throughout 2020, even though the operator managed to bypass the effects of the pandemic in the short-term to perform in line with expectations in Q1.
In a statement, CEO Sigve Brekke said the company started to see the impact from the global spread of the crisis on its performance from the latter part of March, as it experienced lockdown situations in many markets.
“This is in particular affecting roaming revenues and Asian prepaid markets. These effects are continuing into the second quarter,” said Brekke.
The company said while its Q1 results were in line with external guidance, provided in the prior quarter, it was facing an uncertain outlook for the remainder of the year.
Telenor expects lower subscription, traffic revenue and EBITDA growth than previously indicated, while capex-to-sales ratio, excluding licences and spectrum, is expected to be around 13 per cent.
It maintained a mid-term outlook issued in March [1], but Brekke noted “in this extraordinary situation, we will continue to monitor the business closely and take measures ensuring operational performance and flexibility”.
Q1 numbers
Revenue for the period increased from from NOK26.6 billion ($2.6 billion) in Q1 2019 to NOK31 billion, NOK2.4 billion of which was related to the consolidation of DNA [2] in Finland.
Net income attributable to shareholders, however, slipped to NOK698 million, a decrease of NOK3.1 billion, mostly due to currency losses and depreciations.
Telenor explained the Norwegian Krone “depreciated significantly” against many other currencies, leading to unrealised net currency losses due to the revaluation of debt denominated in foreign currency and increased debt in Krone.
Mobile subscriptions reached 185.6 million, up from 176 million, driven by customer growth of more than a million in Myanmar and Pakistan, and increases in Denmark.
This was offset by losses in Norway, Sweden, Malaysia, Bangladesh and Thailand.
[1] https://www.mobileworldlive.com/featured-content/top-three/telenor-modernisation-push-to-impact-jobs/
[2] https://www.mobileworldlive.com/featured-content/top-three/telenor-seals-e1-5b-dna-deal/
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