Telenor (TEL) Q3 2024 earnings summary

Executive summary

• Group service revenues grew 2.1% organically in Q3 2024, with EBITDA up 1.8%, driven by strong Nordic performance and positive mobile net additions, while Asia was impacted by macro and political headwinds in Bangladesh, partially offset by growth in Pakistan.

• Free cash flow before M&A reached NOK 2.8 billion for Q3, with robust year-to-date generation and improved 2024 outlook.

• Transformation and cost reduction programs progressed, resulting in OPEX reductions and improved operating leverage, especially in the Nordics.

• Net income attributable to equity holders was NOK 3.3 billion, with EPS at NOK 2.39, supported by a NOK 615 million fair value adjustment from True Corp.

• CEO Sigve Brekke announced his last quarterly call, with Benedicte Fasmer to succeed.

Financial highlights

• Q3 2024 service revenues: NOK 16.2 billion (+2.3% YoY); EBITDA before other items: NOK 9.2 billion (+1.8% organic).

• Nordics delivered 3.2% service revenue growth and 4.6% EBITDA growth, with DNA Finland leading at 6–7% growth.

• Asia service revenues contracted 1.2% and EBITDA declined, mainly due to Bangladesh, while Pakistan posted 8% organic service revenue growth.

• CapEx to sales ratio at 14–14.1% for Q3, slightly below expectations.

• Net income for Q3: NOK 3.3–3.65 billion; EPS: NOK 2.39.

Outlook and guidance

• 2024 Nordic service revenue growth outlook narrowed to 3–4%, with organic EBITDA growth expected around 6%.

• Group organic EBITDA growth for 2024 guided at 3–4%, revised from mid-single digits due to Bangladesh headwinds.

• Free cash flow before M&A for 2024 guided at NOK 9.5–10.0 billion, at the upper end of the previous range.

• CapEx to sales expected slightly below 17% for 2024.

• OPEX reductions and transformation effects expected to accelerate in Q4 and into 2025.