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Organic Q3 EBITDA grew strongly by 7% yoy, which was comfortably better than expected. In the Nordics the group now looks able to achieve c.6% EBITDA growth in the coming quarters. Furthermore, coupled with a capex decline, Telenor is entering a virtuous circle. Telenor has also received dividends from CelcomDigi showing that the merger in Malaysia is already dividend neutral. Telenor’s dividend yield stands above the average of its best-in-class peers (4.5/5%) at 8.2%. We maintain our Buy on
Companies: TELENOR (TEL:STO)Telenor ASA (TEL:OSL)
AlphaValue
Q2 revenues (+3% yoy) were in line with our expectations but the EBITDA (up by 4% yoy) is no longer lagging revenue growth – something which had been the case owing to the increase in energy costs. Telenor’s secure dividend yield still stands undeservedly well above the average of its best-in-class peers at 7.5%. We maintain our strong Buy on the stock.
Q1 revenues (+4% yoy) were in line with our expectations as was the EBITDA, (up by only 2% yoy and still lagging revenue growth due to the increase in energy costs). The main point regarding Telenor is that, with the completion of the mergers in Thailand and Malaysia, dtac and Digi are now de-consolidated. Telenor’s secure dividend yield still stands undeservedly above the average of its best-in-class peers at 7.5%. We maintain our Add on the stock.
The outlook for 2022 finally remains unchanged as the significant increase in energy prices weighing on the EBITDA (a 3% impact) was offset in Q3 by a positive one-time effect in Pakistan. We are not expecting a dividend increase for 2022 but neither should there be a dividend cut. So with a current dividend yield of 10.3% and a share buyback representing 2/2.5% of the market cap it is now clearly time to buy Telenor.
Telcos have had 2 difficult months in the stock market as, despite being considered defensive, their dividend yields have proven too… low in this period of rising rates. Telenor will neither increase (nor decrease) its dividend for 2022 but should proceed with a 2% share buyback. With a 9.5% dividend yield and this share buyback program it’s now time to take another look at telcos like Telenor which seem to be offering a very secure and high dividend yield.
The group still expects EBITDA growth to lag revenue growth for a few quarters while, in Asia, the outlook for 2022 remains uncertain. Short term, with zero EBITDA growth and with capex still at a high level, a dividend increase for 2022 should not be expected. We maintain our Buy opinion because things could improve greatly in future in Asia with the major deals announced over the past year.
Companies: Telenor ASA (0G8C:LON)Telenor ASA (TEL:OSL)
The Q1 was slightly disappointing with revenues up by only 0.5% yoy and lfl while the EBITDA was down by 2.5%. Although the group still remains affected by the drop in tourism in Asia and particularly in Thailand, 2022 could be better than the poor outlook suggests but above all 2023 should be a year of solid growth. And, given the solid expansion via the mergers expected in Asia over the coming years, we maintain our Buy on the stock.
Although Q4 revenues were in line with expectations, EBITDA was however disappointing. In 2022, EBITDA should be around the 2021 level or slightly higher: this guidance is more cautious than expected. Although the group still remains affected by the pandemic and the drop in tourism in Asia, 2022 could be better than the poor outlook suggests. And, given the solid expansion in Asia expected over the coming years, we believe that buying Telenor today offers a good risk reward.
Telenor has agreed with Charoen Pokphand Group to explore the combination of Telenor’s DTAC and True in Thailand. The new company could have c.55m mobile customers and revenues of c.€6bn. This deal should allow Telenor to strengthen its position in Thailand, a country where mobile activities should experience strong growth in 2022-23 if the recovery in tourism is there. However, Thailand is a three-player market and the deal could be stopped by the regulator. We maintain our opinion at Buy.
Quite a solid performance for the group in Q2 with revenues and EBITDA up respectively by 3.3% and 3.6% yoy and lfl. The stock has just recovered from its pre-COVID-19 level and we maintain our positive stance on Telenor. The group still remains affected by the pandemic and the drop in tourism in Asia but 2022 is taking a good shape (with also the sale of the Myanmar activities and a merger with Axiata in Malaysia).
Q1 performance was globally in line with expectations and quite similar to those of the two previous quarters excluding Myanmar whose overall situation remains difficult. The business continues, however, to be impacted by the COVID-19 pandemic, in particular in Asia and through the reduction in roaming revenues. We maintain our Buy on the stock.
Like in the previous quarters, the good news is that the revenue decline due to a continued roaming shortfall, in particular in Asia, was more than compensated by an opex reduction of 7%, resulting in a flat EBITDA. The stock is still down by 12.5% compared to its pre-COVID-19 level, while the dividend is rising by 3%. We maintain our opinion at Buy on the stock.
Companies: Telenor ASA
Launches a 5G version of FWA (broadband) – no impact on estimates M&A speculation in Europe: Vodaphone and Masmovil (once again) Recent EU ruling on 02/Hutchinson a catalyst for European consolidation?
Arctic Securities
The awaited Swedish spectrum auction today is delayed The authority is reviewing the validity of the Huawei restriction 1H/21 auctions in Scandinavia likely not material, Asia main uncertainty
Telia announces an unlimited subscription – following Telenor Norway Spectrum auctions in Sweden next week: do not expect it to be material 1H/21 auctions in Norway/Denmark likely not material, Asia uncertainty Capacity increased through both spectrum and increased efficiency on 5G
Research Tree provides access to ongoing research coverage, media content and regulatory news on Telenor ASA. We currently have 176 research reports from 5 professional analysts.
CyanConnode exceeded FY24 revenue expectations and has high visibility into FY25, supported by strong deliveries and a growing backlog respectively.
Companies: CyanConnode Holdings plc
Zeus Capital
Artificial intelligence (AI) is a double-edged sword in cybersecurity. Whilst new AI models, architectures, and innovations are emerging to protect the security posture of organisations, attackers are also benefiting from deepfakes, sophisticated phishing, and automation of malicious codes. To ensure the impact of AI on cybersecurity to be a net-positive, we need to pit good AI against bad AI. Point solutions enhanced with machine learning: Global cybersecurity has been built with point soluti
Companies: EPIC DARK TIDE IGP IOM NCC CHRT CNS CLCO TERN SWG CCS SYS BVC
Hybridan
Companies: BATM Advanced Communications Ltd.
Shore Capital
FY23 revenues and EBITDA were in line with expectations. The major news was that BT plans to shed more than 40% of staff. At the end of the decade the EBITDA could reach £11bn with the massive restructuring announced and capex could return to €3.5bn per year. EBITDA less capex could be multiplied by 2.5 and therefore also the dividend. This could value BT at 385 pence at that time. We maintain our opinion at Add on the stock.
Companies: BT Group plc
A decent Q1 performance despite the expected headwinds from cost-of-living pressure and cost inflation. The group is clearly a fairly safe long-term buy and hold. BT plans to shed more than 40% of staff by the end of the decade. In parallel it is further accelerating its FTTP deployment with high capex. But at the end of this phase EBITDA-capex could be multiplied by 2.5. Speculation could also again reignite as Drahi’s empire (owning 24.5% of BT) is being shaken by corruption cases.
Calnex has released a pre-close trading update for the year to March 2024, indicating that revenue would be £16.3m, c£0.7m below our forecast, partly due to the timing of orders at the end of the period. Group trading has been impacted by the well-documented, continuing challenges in the Telecoms sector which have seen delayed project timings leading to corresponding delays in customer spending. Administrative costs are being controlled and are focussed on maintaining R&D. Calnex remains confide
Companies: Calnex Solutions Plc
Cavendish
Q4 revenues were only up by 1.3% yoy (excluding the inclusion of EE for two months). A better performance than might be thought at first sight given the 8% decline recorded by the wholesale division (due to the benefit of ladder pricing revenue recognised last year). BT’s Fixed consumer revenues, 25% of BT’s business (excluding EE and Openreach) corresponding to BT’s own retail business, were up by 8% yoy with a 20% increase in broadband and TV revenue. Openreach revenue (28% of BT’s revenue not
Q1 16 revenues declined by 2.6% yoy (excluding the contact centre business SNT Deutschland which was sold in Q1). Once again growing Consumer revenues were offset by the impact of the ongoing decline in size of the business market and lower revenues at iBasis. The EBITDA decreased by 4.5% yoy but this is due to temporarily higher IT-related costs in network and operations in the run-up to IT rationalisation. Note also an impairment charge related to iBasis for €45m. KPN intends to pay a regul
Companies: Royal KPN NV
Q4 2015 revenues declined by 5.9% yoy (adjusted with a tax settlement benefit of €44m in Q4 2014). Growing Consumer revenues were offset by the impact of the ongoing decline of the business market size and lower revenues at iBasis. The EBITDA decreased however by only 0.7% yoy in Q4 2015 (without the tax settlement benefit in Q4 2014). These results are quite disappointing compared to the previous Q3 where revenues were down by only 2.6% yoy (vs -3.5% in H1) thanks to 3.7% growth on the co
Q3 revenues and EBITDA were up by 3% yoy. Quite a good set of results for the new telco king of England (following the completion of EE’s acquisition). BT Fixed consumer revenues (25% of BT’s business not including Openreach sales corresponding to BT’s own retail business) were up by 11% yoy with a 23% increase in broadband and TV revenue. Openreach revenue (28% of BT’s revenue not including EE) was up by 3% yoy with record net fibre broadband additions of 494k, 32% higher than last year. There
Although Q1 revenues had decreased by 2.6% yoy while the EBITDA had declined slightly more by 4.5%, it was the opposite in Q2 with revenues down more than expected by 4.3% yoy but a better EBITDA down by only 1.7%. Once again, growing Consumer revenues were offset by the impact of the ongoing decline in the size of the business market. So, as in the two previous quarters, a mixed release.
BT group has released its Q1 numbers. But note, in parallel, another key point: two days ago Ofcom announced a half-step towards a separation between BT and Openreach (BT’s division which operates the fibre network). Q1 revenues were only up by 0.4% yoy (excluding EE). Like in the previous quarter, it is a better performance than might be thought at first sight given the 6% decline recorded by the wholesale division (due to the benefit of ladder pricing revenue recognised last year). BT’s Fixed
Quite a good Q3 for KPN: even if revenues, down by 3% yoy, are still suffering from the decline in the business market size (consumer revenues grew by 1.5% yoy), the EBITDA was good (growing by 3.4% yoy as it was down by 4.5% in Q1 and by 1.7% in Q2) driven by customer base growth and the positive impact of cost savings.
Q2 revenues were up by 1.1% yoy excluding EE (vs +0.4% in Q1). Like in the previous quarter, this is a better performance than might be thought at first sight given the 5% decline recorded by the wholesale division (due to Partial Private Circuits customers continuing to migrate to newer Internet Protocol-based technologies). BT’s Fixed consumer revenues, 20% of BT’s business corresponding to BT’s own retail business, were up by 11% yoy with a 17% increase in broadband and TV revenue. Openreach’
BT previously announced on 27 October 2016 that an initial internal investigation of accounting practices in its Italian business had identified certain historical accounting errors and areas of management judgement requiring reassessment. At that time, they announced the write-down of items on the balance sheet by £145m, being the then best estimate of the financial impact of these issues. Since then, BT has progressed with the investigation, which has included an independent review by KPMG of
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