Telenor (TEL) Q2 2024 earnings summary

Executive summary

• Achieved 4.5% organic service revenue growth and 3.8% EBITDA growth year-over-year in Q2 2024, with free cash flow before M&A of NOK 2.2 billion, supporting the ongoing strategy.

• Nordic transformation initiatives are delivering operational efficiencies, with flat or reduced OpEx, workforce optimization, and tangible results in network, IT, and commercial areas.

• Asia operations, especially in Thailand and Malaysia, are realizing synergies ahead of plan, with strong integration progress and dividend contributions.

• Management transition in Nordics handled smoothly, with new leadership and continued focus on transformation.

• Net income attributable to equity holders was NOK 2.5 billion for Q2 and NOK 14.1 billion for H1, including a NOK 7.0 billion impairment reversal on True Corporation.

Financial highlights

• Group service revenues reached NOK 16.3 billion in Q2 2024, up 4.5% organically year-over-year.

• Group EBITDA before other items was NOK 8.8 billion, up 3.8% organically year-over-year.

• Free cash flow before M&A was NOK 2.2 billion in Q2 and NOK 5.5 billion year-to-date.

• Earnings per share (EPS) was NOK 1.83 in Q2, over three times higher than Q2 last year.

• Net interest-bearing debt at NOK 83.2 billion, with a net leverage ratio of 2.3x.

Outlook and guidance

• 2024 service revenue outlook raised to low- to mid-single-digit growth from low single digits.

• Mid-single-digit organic EBITDA growth for the group expected, with improved performance in Grameenphone in H2.

• Free cash flow target for 2024 reiterated at NOK 9–10 billion, despite NOK 1 billion minority leakage in Bangladesh.

• Capex/sales ratio for both Group and Nordics expected around 17%.

• Underlying tax rate for 2024 estimated at ~30%, effective tax rate at ~15%.