Key Takeaways:
Telenor reported Q2 adjusted EBITDA of NOK 7.99 billion, missing the NOK 8.30 billion consensus by 3.7 percent.
The miss reflected slower-than-expected revenue growth in Norway and Finland, higher Nordic operating expenses and a challenging macroeconomic environment in Bangladesh, the company said.
Adjusted EBITDA fell 9 percent from a year earlier to NOK 7.99 billion, or $826.48 million at current exchange rates. The Oslo-based telecom operator had warned in April that the second quarter would be challenging against strong year-earlier comparables, at that time cutting its 2026 adjusted EBITDA growth forecast to flat-to-low single digits from low-to-mid single digits.
Telenor now expects flat to slightly negative organic growth in adjusted EBITDA for the full year, a further downgrade from its April forecast. It also lowered its free cash flow guidance to around NOK 10 billion, from a prior range of NOK 10 billion to NOK 11 billion. The Norwegian crown traded at 9.6675 per US dollar.
The weaker performance was concentrated in Telenor's Nordic operations, where revenue growth in Norway and Finland fell short of internal forecasts, and in Bangladesh, where macroeconomic pressures weighed on the local business. The company also cited the timing of commercial initiatives and transformation costs as factors in the quarter. Telenor's Bangladesh unit, Grameenphone, has faced currency depreciation against the US dollar and rising inflation, which have pressured consumer spending and operating costs.
Telenor, Norway's largest telecom operator by market share, competes with Telia Company and Ice Group in the Nordic region. Across the European telecom sector, operators have faced margin pressure from rising energy costs and network investment requirements for 5G rollout, though Telenor's challenges are compounded by its emerging-market exposure. The company's shares traded lower in Oslo following the earnings release.
The guidance downgrade shows that management expects the headwinds in the Nordic region and Bangladesh to persist through the remainder of the year. Investors will watch Telenor's third-quarter results for signs of stabilization in its Norwegian and Finnish operations and any update on its Bangladesh exposure.
This article is for informational purposes only and does not constitute investment advice.
