Telenor Pakistan Profits Grow 10.7% in Q3 2022

Telenor Pakistan, the country’s second-largest mobile operator, reported solid performance for the quarter that ended on September 30, 2022.

According to Telenor Group’s financial results, Telenor Pakistan reported a total of NOK 1.32 billion (~Rs. 29.53 billion) in revenues during the quarter, up by 10.7 percent in terms of PKR as compared to the same period last year.

Telenor Pakistan’s service revenues were strong despite the flooding situation. For the operator, high energy prices in Pakistan continue to be a headwind. With regard to the outlook for the year, Telenor maintains the expectation of low single-digit growth in service revenues.

Telenor Group’s mobile subscription base in Pakistan was impacted by flooding and network outages.

Pertinently, the total revenue is actually down in Norwegian currency rates at NOK 1.32 billion which is a decrease of NOK 105 million compared to NOK 1.42 billion in the same period last year when the PKR was trading well below 180 against the US Dollar. Total service revenue decreased from NOK 1.187 billion (Rs. 24.9 billion) to NOK 1.095 billion (Rs. 22.97 billion).

Reported operating expenses (Opex) increased by NOK 0.4 billion (Rs. 8.39 billion). Organic operating expenses increased by NOK 0.5 billion (Rs. 10.5 billion). Reported EBITDA before other items was NOK 13.1 billion which is an increase of 1.6 percent. Organic EBITDA increased by 2.5 percent.

Average Revenue Per User during the quarter remained unchanged — when compared to the same period last year — at NOK 9 per user per month.

The subscriber base declined by 756,000. At the end of the quarter, the subscriber base stood at 48.8 million, which is the same level as the same period last year.

Operating expenses increased by 32 percent, mainly due to higher energy prices. Underlying EBITDA declined by 22 percent, driven by the increase in operational costs. Reported EBITDA increased by 70 percent, positively impacted by the reversal of the sim tax provision.

An increase in energy cost of NOK 0.4 billion impacted EBITDA development negatively by 3 percentage points which was more than offset by a one-time effect related to the reversal of the sim tax provision in Pakistan of NOK 0.6 billion (Rs. 12.58 billion) following a High Court decision in favor of Telenor Pakistan.

Pakistan was affected by unprecedented flooding this quarter, affecting around 33 million people, which amounts to around 15 percent of Pakistan’s population. The situation impacted the spending power of consumers and also caused network outages along with increasing costs.