(Fornebu, 21 October 2020) «Telenor’s third quarter results highlight the strength of our operating model, which provides flexibility in managing operations of critical services during uncertain times. The overall performance was positively impacted by organisational modernisation and accelerated digitalisation programmes.

In the quarter, Telenor reported a 2 percent decline in subscription and traffic revenues due to a continued roaming shortfall and lower sales in Asia. However, this development was more than compensated by an opex reduction of 8 percent, resulting in an EBITDA growth of 4 percent and free cash flow of NOK 4 billion.

The results from the Nordic operations were strong this quarter. Telenor Norway delivers a unique combination of innovation and modernisation to their customers and see strong intake on their new speed based price plans. I am pleased to see increasing subscriber bases in Finland, Denmark and Sweden.

In Asia, Pakistan and Bangladesh show strong subscriber growth this quarter. Also this quarter we saw some impact from the COVID-19 pandemic on our business, primarily in Thailand and Malaysia. In Thailand, we experience continued effects from shortfall in tourism revenues while competition has increased in Malaysia. In Myanmar, SIM re-registrations affect the subscriber base.

Our strategy of growth, modernisation and responsible business has provided us with the ability to manoeuvre during these demanding times. We now experience a stronger EBITDA development and adjust our full year 2020 outlook to low single digit organic EBITDA growth whereas we maintain the low single digit percent decline in subscription and traffic revenue and capex to sales around 13 percent.»

Sigve Brekke, President and CEO, Telenor Group

Third quarter 2020 summary[1]

• The subscriber growth in most markets, amounting to more than 4 million, was offset by the loss of 6.3 million subscribers due to the SIM re-registration in Myanmar. Grameenphone ended the third quarter with an all time high subscriber base of 77.6 million. The Group’s mobile subscription base was 180 million at the end of third quarter.
• Subscription and traffic revenues decreased by 2% on an organic basis, mainly driven by the continued decline of prepaid in dtac, as well as the shortfall of roaming revenues in the Nordics. Total reported revenues were NOK 30 billion. This is an increase of NOK 1.6 billion or 6%, driven by currency effects of NOK 0.8 billion as well as the consolidation of DNA.
• Currency adjusted opex excluding DNA decreased by NOK 0.7 billion or 8%, as a result of opex reductions across most business units as well as Corporate Functions. Reported opex was stable, as underlying cost reductions offset the increases related to the consolidation of DNA and currency development.
• EBITDA before other items grew by 4% or NOK 0.5 billion on an organic basis, as the substantial opex reductions were able to mitigate the revenue loss. Reported EBITDA before other items was NOK 14.6 billion and the EBITDA margin was 49%.
• Free cash flow before M&A was NOK 3.9 billion. Total free cash flow was NOK 4.4 billion. Capex excluding licences and spectrum was NOK 3.7 billion, yielding a capex to sales ratio of 12%.