Pre Q2 2019 estimates

Before entering the silent period, Telenor Investor Relations reminds analysts about relevant items for the quarter. All listed items should already be publicly know, e.g. through company press releases or local regulators’ announcements.

Dear analyst,

We will be entering a silent period from 4 July and until the Q2 results are released on 16 July.

We kindly ask you to fill in your estimates for Q2 2019 and the years 2019-2022 and forward to us in the attached template. In return we will as usual send you the consensus estimates. Please reply to this email or return your estimates to IR@telenor.com.

We would be happy to receive your contribution as soon as possible and latest by Wednesday 3 July at 3 pm CET.

 

Things to be aware of in connection with the pre Q2 2019 estimates:

The below mentioned issues are in principle publicly known, e.g. from our own reporting and announcements or based on announcements from local regulators or authorities.

 Norway

  • MTR reduction from 1 January, see table below.
  • In June, Telenor acquired 2×10 MHz of spectrum in the 700 MHz frequency band for NOK 180m to be booked in Q4 2019.

 Denmark

  • MTR reduction from 1 January, see table below.

 Thailand

  • On 23 April 2018, dtac and TOT signed a partnership on TOT’s 2.3 GHz spectrum. The agreement has both revenue and cost elements, resulting in a net annual effect on EBITDA of THB 4.5 bn (NOK 1.2 bn). Revenue elements are booked as non-mobile revenues.
  • On 19 June dtac was allocated 2×10 of 700 MHz spectrum for THB 17.6 bn. The payment will be made over 10 years from the day the spectrum is ready for use, preliminary Q4 2020. As a result of buying 700 MHz, the payment profile for the previously acquired 900 MHz spectrum has been extended. The new payment profile for 900 MHz will be THB 7.4 bn in 2020 and THB 3.8 bn per year from 2021 to 2027.
  • Dtac CMD – outlook for 2019. Low single digit service revenue decline (excl. interconnect). EBITDA of THB 24-25 bn. Capex ex. Licences of THB 13-15 bn.

Malaysia

  • MTR reduction from 1 January, see table below.

Pakistan

  • According to statistics published by the regulator PTA, Telenor Pakistan gained 282k  subscribers in April, and lost 268k in May.
  • Telecom taxes was removed with effect from 14 June 2018 – and reinstated on 24 April 2019.
  • MTR reduction from 1 January, see table below.

Bangladesh

  • According to statistics published by the regulator BTRC, Grameenphone added 420k subscribers in April and 207k in May.
  • A uniform voice tariff was introduced by the regulator with effect from mid-August 2018, removing the previous difference between on-net and off-net tariffs. The uniform call rates has a positive impact of approximately 3-4pp on subscription and traffic revenues.

Net financials

  • The majority of Telenor’s net debt is in EUR and USD. Deprecation of NOK will increase financial cost, while appreciation will decrease financial costs.

FX

  • Looking at the year to date FX rates used for Telenor Group’s reporting, the Norwegian krone has weakened compared to most currencies in the portfolio. For YTD rates end of May, the THB and USD has appreciated by 9% vs NOK when comparing to Q2 YTD FX rates last year. The BDT has in the same period appreciated 8% vs NOK. MMK has depreciated 5% compared to NOK and 14% compared to USD.
  • The PKR is down 17% vs NOK and 23% vs the USD when looking at the closing rates end of May 2018 compared to May 2019.


Net debt and cash flow

  • First tranche of the ordinary dividend of NOK 4.40 per share totalling NOK 6.4 bn was paid out in May.
  • In May, the buyback programme for 2019/2020 was initiated. As of June 25, 4.4 million shares has been repurchased.
  • On 22 April 2019, the Board of Directors of Digi declared the first interim dividend for 2019 of MYR 0.043 per share, which corresponds to approximately NOK 0.3 billion for Telenor’s ownership share.

 

MTR development

Norway 

NOK      Jan 17 – Feb 18 Mar 18 – Dec 18 Jan 19 – Dec 19 Jan 20 –
  0.065 0.054 0.043 0.032

Sweden

SEK Jul 15 – Sep 16 Oct 15 – Jun 17 Jul 17 – Jun 18 Jul 18 –
0.0757 0.0689 0.0643 0.0584

Denmark

DKK Jan – Dec 2016 Jan 2017- Jan 2018- Jan 2019-
0.0541 0.0473 0.0447 0.0385

 Thailand

THB Jul 13 – Jun 15 Jul 15 – Dec 16 Jan – Dec 17 Jan – Dec 18
0.45 0.34 0.27 0.19

Malaysia 

MYR 2015-2017 2018 2019 2020
0.0365 0.0292 0.0196 0.0099

 Pakistan 

MYR 2018 2019 2020
0.90 0.80 0.70

 

Other things…

  •  Digi will report their Q2 results on 12 July and Grameenphone on 15 July.
  • As previously communicated, Telenor Group’s guidance will include dtac from Q2 onwards

Best regards,
Marianne and Håkon
Telenor Investor Relations
IR@telenor.com