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Telenor attributed the economic impact of the COVID-19 pandemic primarily to the decline in tourism and business travels.
Telenor ASA (OSE: TEL) has announced that it expects its Asian operations to make a recovery from the COVID-19 pandemic in the second half of 2021 and have revealed their expectations for revenues and profits, which is to remain unchanged this year, compared to 2020. The February 1 announcement also revealed the Telenor Q4 net income attributable to equity holders rose to 7.69 billion Norwegian kroner ($893,662,590) from last year’s 1.77 billion kroner ($205,658,070).
Telenor also announced a profit of 2.1 billion kroner ($244,001,100) from the sale of software startup Tapad Inc as well as a 1.2 billion kroner ($139,329,120) from the sale and partial leaseback of the firm’s headquarter office building in Norway.
Telenor revealed that its adjusted Q4 earnings before interest, tax, depreciation and amortisation (EBITDA) for October-December saw a 0.9% rise year-on-year to 13.5 billion Norwegian crowns ($1.6 billion), a little short of the 13.8 billion crowns analysts had predicted. Organic EBITDA saw a drop of 0.2 percent while adjusted EBITDA margin was 43.7% up from 42.2% in 2020.
The board of directors of Telenor has since proposed a dividend of 9 kroner per share in line with dividend policy, based on their 2020 performance. Sigve Brekke, President and CEO of the Norwegian company speaking after the announcement stated that the Telenor will channel their focus on their strategic priorities which includes growth modernization and responsible business in 2021.
“In the coming months, all our markets and especially our Asian subsidiaries will still be impacted by the spread of COVID-19 and government responsive measures. For the full year 2021, we expect organic subscription and traffic revenues and Ebitda to remain around 2020 level. We foresee a capex to sales ratio of 15-16% percent,” Chief Executive Brekke said. He added that they expect lockdowns and border closures to continue into this year and that Telenor “expects a gradual recovery in the Asian markets during the second half of the year.”
Telenor attributed the economic impact from the COVID-19 pandemic in Norden primarily to the decline in tourism and business travels as a result of government lockdowns, stating that it deprived the firm of the “roaming” revenue generated when customers of other operators use its network.
Telenor shares saw a 2% rise in early trade on February 2 but are still down 13% in the last 12 months. In a bid to curb the negative impact of the Covid-19 pandemic, the company cut operating costs by 7% year-on-year in the final quarter of 2020. This however excluded their acquisition of DNA, a Finnish telecom firm that provides data and TV services. The company’s fourth-quarter revenues took a hit, falling from 31.7 billion crowns to 30.9 billion a year ago, against analyst expectations of 31.5 billion.
Telenor serves 182 million customers in nine countries across Europe and Asia and recently selected Zyxel Communications’ “5G NR Fixed Wireless Access outdoor router –NR 7101” for its 5G deployment as the company looks to modernize its existing network infrastructure in a bid to offer nationwide 5G access in Scandinavia by 2024.
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