Telenor Group is reporting solid financial performance for the second quarter with profitable growth. The results show close to four million new customers, continued revenue growth, a strong EBITDA margin of 36% and an operating cash flow of more than NOK 5.6 billion. Telenor Group reported revenues of NOK 26.8 billion in the quarter, representing an organic revenue growth of 1.6%.
“The strong results in Norway reflect the rapid rise in customer demand for mobile data and our ability to provide relevant services supported by superior network quality and coverage. Our customers almost doubled their data usage from the second quarter last year. The extensive network expansion and increase in 4G enabled phones are the key drivers of this positive development resulting in an ARPU increase of 4% and underlying mobile revenue improvement of 6%. While the results are strong, the high investments in modern infrastructure and changes in customer expectations demand continued efficiency improvements, as well as strong efforts for building capabilities for the future,” said Jon Fredrik Baksaas, President and CEO of Telenor Group.
“In Thailand, our ability to successfully migrate customers to the new 3G network and complete the transition to a licensing regime is key to delivering high quality services as well as improving profitability. A combination of intense competition, a lower interconnect rate and weaker macro-economic development have material effect on sales this quarter. Dtac has managed to further reduce regulatory costs, and has also taken measures to increase efficiency and enhance capabilities to manage evolving market conditions and to meet customer expectations,” said Baksaas.
“I am pleased to note strong performance by our operations in Sweden and Malaysia as well as growth in Pakistan, Bangladesh and India. However, the Danish telecom market remains challenging. The operational performance this quarter underscores the benefits of a well-diversified Group,” said Baksaas.
“On the back of strong performance so far this year and our estimates for the remainder of 2014, we now expect an EBITDA margin above last year while our revenue outlook remains at low single digit organic growth. Following the shift of the satellite-related capex to next year, we adjust this year’s capex to sales ratio downwards to be in the range of 14-15%,’’ said Baksaas.