Telenor ASA (TELNY Quick QuoteTELNY – Free Report) ended the first half of 2024 with impressive financial results across key markets in the Nordics and Asia. The company’s strategic focus on technology investments and cybersecurity efforts has laid a strong foundation for future growth.
In the second quarter, Telenor achieved service revenues of NOK 16.3 billion ($1.51 billion), up from NOK 15.83 billion in the same period last year. The organic increase of 4.5% was driven by strong growth in Telenor Nordix (4%) and Telenor Asia (6%).
EBITDA before other items organically amounted to NOK 8.8 billion. Organic growth of 3.8% was supported by improved service revenue in the Nordics and Asia, partially offset by higher operating expenses, mainly in Asia.
In the first half of 2024, Telenor’s EBITDA was NOK 17.3 billion. EBITDA excluding other items increased 5.3% organically and 2.7% as reported. Growth was driven by strong service revenue in the Nordics and focused cost management, partially offset by higher operating expenses in Asia.
In addition to its financial achievements, Telenor has also made great strides in cybersecurity: the company thwarted more than 1 billion digital crime attempts against its Norwegian customers this year, including blocking fraudulent websites, phishing scams, malware downloads and fraudulent communications by phone and SMS.
The formation of Telenor Cyberdefense and the acquisition of CombiTec AS this month mark another important step forward for Telenor in strengthening its cyber defense services as it seeks to strengthen its position in the cybersecurity sector. The company generated free cash flow before M&A of NOK 2.2 billion and had a strong cash flow of NOK 5.5 billion in the first half of the year.
Technology remains a cornerstone of Telenor’s strategy, enabling improved customer experience and operational efficiency. Earlier this year, Telenor formed a strategic partnership with NVIDIA Corporation to advance its artificial intelligence capabilities. Telenor’s investment in data center company Skygard and expanded partnership with Amazon Web Services further underscore Telenor’s commitment to advancing sovereign cloud solutions.
Telenor expects Nordic service revenue to grow at a low to mid single-digit organic rate in 2024. Management expects free cash flow before M&A to be NOK 9-10 billion in 2024, based on end-2023 exchange rates. The company further expects Nordic EBITDA before other items to grow at a mid single-digit organic rate in 2024, with a Nordic capex-to-sales ratio of approximately 17%.
Telenor shares have risen 11% in the past year compared with the industry’s decline of 3.6%.
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Zacks Rank and Top Stocks
Telenor currently carries a Zacks Rank #3 (Hold).
Some of the top-ranked stocks across industries are discussed below.
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The average earnings surprise over the past four quarters has been 8.90%. In the most recent quarter, Ooma delivered an earnings surprise of 27.27%.
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In its most recently reported quarterly report, TDS delivered an earnings surprise of 145.45%.
Motorola Solutions, Inc. (MSI Quick QuoteMSI – Free Report) provides services and solutions to government departments and public safety programs, large enterprises and wireless infrastructure services.Currently, Motorola holds a Zacks Rank #2 (Buy).
The company’s average earnings surprise over the past four quarters is 7.54%, while its long-term growth expectations are 9.47%. In the most recent quarter, Motorola delivered an earnings surprise of 11.51%.
Note: NOK1 = $0.0929675 (average for the period from April 1, 2024 to June 30, 2024)
