Norwegian telecoms group Telenor said emerging market growth helped core third-quarter earnings beat forecasts in the face of a choppy global economy and raised its revenue outlook on Wednesday. The company said earnings before interest, taxes, depreciation and amortisation (EBITDA) were 8.32 billion Norwegian crowns ($1.5 billion), 5.8 percent above the average forecast by analysts in a Reuters poll and 7.4 percent ahead of last year's third quarter.
Like Telenor, other Nordic telecom operators such as Tele2 and TeliaSonera also reported strong third-quarter results earlier this month. Telecoms were late to see the effect of the last downturn and are widely seen as safe havens in times of economic turmoil. Emerging markets have also yet to be hit by debt problems in Europe and the sluggish US economy.
"It looks fantastic," said Handelsbanken analyst Thomas Heath, singling out the company's performance in Pakistan, where EBITDA beat expectations by 6 percent, as emblematic of the strong quarter. "We also take comfort in the fact that Norway seems to be doing quite well," he said. "There has previously been a lot of concern over competition there."
Pareto analyst Thomas Nielsen said the results were through-and-through impressive. "The margin was better and the cash flow was exceptionally strong," he said. "The raised guidance, both on top line and EBITDA, was positive. And in general most countries (where Telenor is present) did better than we anticipated." Telenor reported operating cash flow of 5.5 billion crowns and "organic revenue growth sustained at 7 percent".
Jon Fredrik Baksaas, Telenor's chief executive, said the company had been able to grow in both developed and rising economies "in a world of slowing growth and rising risks". "The third quarter of 2011 showed that Telenor's geographical footprint enables us to grow our business in a manner which yields solid return from mature markets at the same time as we are growing in emerging markets," he said in a statement.
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