Telenor reports strong cash flow in 2021
February 2, 2022
Telenor has reported that several years of modernisation and digitalisation initiatives enabled it to deliver solid operational results for 2021, despite impact from the ongoing pandemic.
For the full year the multinational telco delivers stable subscription and traffic revenues and EBITDA. The strong free cash flow of NOK 13 billion (€1.31bn) supports the proposed dividend of NOK 9.30 per share resulting in a yield of around 6 per cent.
“During the year, Telenor has focused on safeguarding employees and providing services to customers as the demand for connectivity, digitalisation and data has increased during the year, all while ensuring the robustness of the critical infrastructure we provide. Modernising our operations remain a top priority, and structural initiatives have resulted in NOK 1.2 billion in savings during the year. More importantly, these efforts have enabled us to provide great customer experience and a position to partner with Google and AWS to explore new services beyond connectivity”, said Sigve Brekke, President and CEO of Telenor Group.
In the Nordics, the company delivers yet another good quarter. In Norway the strategy of providing value to customers with services on top of a world class network is yielding results, with a mobile ARPU growth of 3 per cent. With the copper decommissioning reaching its peak, the growth in non-legacy services were not able to fully compensate for the legacy decline. The demand for services and increased data speed drove the ARPU growth of 3 per cent in Finland and 6 per cent in Denmark. In Sweden, the revitalised go-to market strategy resulted in stable subscription and traffic revenues and strong mobile subscriber growth in the quarter.
In Asia, pressure on the top line remains due to intense competition and impact from the pandemic, in particular in Thailand. Through 2021, Telenor has progressed on the strategy to build strong positions across markets. In the fourth quarter, the company announced yet another merger in Asia. With this transaction, Telenor aims to combine dtac and True in Thailand and create the leading telecom operator in the country.
Based on the solid financial position, strong free cash flow generation and a leverage ratio of 2.05x, the Board of Directors propose a dividend of NOK 9.30 per share, in line with the dividend policy. The dividend represents a 3 per cent increase from last year.
“Entering 2022, will maintain focus on returning to growth, the opportunities we see from also going beyond connectivity, creating leading operators through partnerships in Asia and further developing our infrastructure position in the Nordics. For the full year 2022 and excluding Digi in Malaysia, we expect low single digit growth in service revenues, EBITDA around 2021 level or slightly higher and capex to sales ratio of 16-17 per cent.”, added Brekke.