OSLO (Reuters) - Norway’s Telenor (TEL.OL) on Tuesday warned that 2020 revenue and earnings will fall short of its outlook as the coronavirus pandemic wreaks havoc, while posting first-quarter operating profit slightly ahead of forecasts.
The telecoms operator, which has 186 million customers in nine countries across Europe and Asia, said it would cut its planned capital expenditure in 2020 to 13% of its sales from a previous plan of 15%.
January-March earnings before interest, tax, depreciation and amortisation (adjusted EBITDA) rose 13.7% year-on-year to 14.1 billion Norwegian crowns ($1.34 billion), while analysts in a Refinitiv poll on average had expected a profit of 13.81 billion crowns.
“From the latter part of March, we have started to see impact from the global spread of COVID-19 on our performance, as we are experiencing lockdown situations in many of our markets,” Chief Executive Officer Sigve Brekke said in a statement.
“This is in particular affecting roaming revenues and Asian prepaid markets,” Brekke said, adding that this might continue into the second quarter.
Telenor had previously predicted its annual underlying earnings would grow by 2%-4% after last year’s decline and that organic revenue was set to expand by up to 2%, more than the 0.4% growth in 2019.
While organic revenue growth, excluding acquisitions, grew by 2.4% year-on-year in the first two months of the year, the rate in March was just 0.5% amid a gradual introduction of lockdowns, the company said.
The lower growth rate in March had a negative impact on profits of 150 million crowns, it added.
Telenor said it will strengthen its focus on cash flow management, costs and investment levels. It did not provide much details on its outlook for new sales or profit but said its mid-term prospects remained unchanged despite the pandemic.
Reporting by Victoria Klesty and Terje Solsvik; Editing by Clarence Fernandez, Sherry Jacob-Phillips and Subhranshu Sahu