Telenor president and CEO Jon Fredrik Baksaas raised the company's full-year earnings forecasts after the Norway-based operator generated record high revenues in the opening quarter of 2015.
Baksaas said the operator now expects full-year organic revenue growth of between 5 per cent and 7 per cent compared to its previous prediction of mid single-digit growth, and an EBITDA margin of between 34 per cent and 36 per cent compared to a range of between 33 per cent and 35 per cent previously.
Management's confidence was boosted after the company generated record high revenues of NOK30.2 billion (€3.5 billion/$4 billion) in the recent quarter compared to NOK25.3 billion in Q1 2014. Baksaas said Telenor's Q115 performance represents a "promising start to the year."
Telenor translated its sales growth into higher profit. Post-tax profit hit NOK4.05 billion in the recent quarter, up from NOK3.67 billion in Q1 2014. EBITDA increased from NOK9.07 billion in the opening quarter of 2014 to NOK10.5 billion in the recent quarter.
Baksaas said the company turned in a solid performance in Norway during the opening quarter of 2015, with growing mobile data consumption fuelling a 6 per cent year-on-year rise in revenues. The company's dtac operation in Thailand began to show "some early signs of improvement" due to a turnaround plan, while the company's operation in Myanmar continues "to face strong demand" and turned EBITDA positive "only a few months after service launch."
Analysts at Jefferies International echoed Baksaas' enthusiasm, noting that Telenor's Q1 2015 revenues were 3 per cent higher than the investment bank predicted. Jefferies pointed to Myanmar as the main driver of Telenor's earnings growth, noting the division "turned EBITDA-positive in its second quarter of operation."
Jefferies analysts were also buoyed by Telenor's performance in India during the opening three months of 2015, noting that the business there turned "EBITDA-positive in March after an MTR cut". The analysts also noted that Telenor showed "solid momentum in Norway, and strong margin in Pakistan" during the quarter.
- see Telenor's earnings statement [PDF]
- view Jefferies International's comments [PDF]
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