Telenor Reports Q3
"I'm very happy to present a strong operational and financial quarter. We have achieved excellent results with continued high growth in subscriptions and revenues, combined with a record high EBITDA margin. Most of our operations improved their margins compared to the same quarter last year," said President and CEO of Telenor, Jon Fredrik Baksaas.
Telenor celebrated the 100 million subscriptions milestone in September, and at the end of the third quarter Telenor's mobile operations served 105 million subscriptions, on a 100 per cent basis. This includes 2.3 million subscriptions from Telenor Serbia, which was consolidated from 1 September.
All three mobile operations in Scandinavia show solid growth in revenues and margins. Kyivstar in the Ukraine posted a revenue growth in local currency of 48 per cent with EBITDA margin of 60 per cent.
"We are especially satisfied with the performance of our Nordic mobile operations, where we are seeing good improvement. At the same time Kyivstar in Ukraine and GrameenPhone in Bangladesh continue to impress, delivering solid performances. We have expanded our footprint in the Balkans and are pleased to now include Telenor Serbia in the Group. We are looking forward to developing the company together with our other operations in this region," said Jon Fredrik Baksaas.
In Fixed Norway, the underlying revenue decline was 6.5 per cent. The increased decline in revenues is mainly due to migration of voice traffic to mobile networks and price reductions. More than 50 per cent of households in Norway have a broadband connection and almost 20 per cent do not have a traditional fixed line telephony service. During the quarter, the number of xDSL subscriptions in Norway increased by 15,000 to 542,000. Telenor is the market leader within broadband in Scandinavia, with a total of 1.1 million retail subscriptions at the end of the third quarter of 2006.
The Nordic Broadcast business increased revenues by 13 per cent and the EBITDA reached a record level of NOK 485 million. The number of direct-to-home (DTH) pay TV subscribers increased by 8,000 in the third quarter of 2006, reaching 929,000. The number of cable TV subscribers increased by 4,000, reaching 691,000 subscribers.
Increased expectations for 2006
Based upon the strong results and positive development in the third quarter of 2006, the outlook for the full year has been adjusted compared to the report for the previous quarter. For 2006, Telenor expects a revenue growth of around 35 per cent with an EBITDA margin before other income and expenses of around 36 per cent. Capital expenditure, as a proportion of revenues, is expected to be around 20 per cent.
Telenor Group (Nasdaq: TELN)