By Victoria Klesty
OSLO – Telenor’s fourth-quarter earnings slightly beat expectations on Thursday as the Norwegian telecoms operator forecast continued growth in 2023 in service revenue and core profit in its Nordic business.
Chief Executive Sigve Brekke said Telenor and the rest of the telecoms sector would likely be resilient in case of a global recession as consumers cut their mobile phone spending after other costs because they consider it “crucial”.
“You cut on other consumption long before you cut on your mobile, be it in Norway (or) Bangladesh,” Brekke told Reuters.
Telenor’s adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) for October-December was flat year-on-year at 10.1 billion crowns ($1.02 billion), while analysts on average had expected 9.9 billion crowns.
Shares in Telenor rose 7% to 111.35 crowns, recovering from a ten-year low of 87.60 set on Dec. 20 and reaching their highest level since Aug. 25 last year.
Telenor proposed a dividend for 2022 of 9.40 crowns per share, up from 9.30 crowns for 2021.
The operator announced in September a potential listing of its Asian unit and a restructuring of its Nordic business that would likely lead to closer integration of Telenor’s Danish, Norwegian, Swedish and Finnish units.
Although Telenor said it expects its Nordic business to show low to mid-single digit growth for both service revenue and EBITDA this year, Brekke said its mobile service revenues rose by 5% in the quarter, a sign of the region’s growth potential.
“Consensus is also sitting on the low end of the service revenue guidance range which could be an element of upside,” Credit Suisse said in a note to clients.
Operating expenses rose 8% in the fourth quarter because of higher energy costs and a provision related to value added tax on 2G licence payments in Bangladesh, the company said.
“We have not adjusted the prices even close to inflation as the price adjustment has been quite marginal,” Brekke said.
The operator, which has about 158 million customers across the Nordic region and Asia, last year completed a $15 billion merger to form a telecoms leader in Malaysia and its Malaysian unit is now listed as discontinued operations.
Its $8.6 billion deal in Thailand is also moving towards completion, it said.
($1 = 9.8785 Norwegian crowns)