Telenor Group ( TELNY.PK) Q3 2011 Earnings Call October 26, 2011 3:00 AM ET Executives Scott Engebrigtsen – Communications Manager Jon Fredrik Baksaas – President and CEO Richard Olav – EVP and CFO Analysts Espen Torgersen – Carnegie Christer Roth – D&B Laurie Fitzjohn – Sykes Andrew Lee – Goldman Sachs Barry Zeitoune – Berenberg Jakob Bluestone – Credit Suisse Stefan Gauffin – Nordea Will Milner – Arete Research Maurice Patrick – Barclays Capital James Britton – Nomura Presentation Scott Engebrigtsen
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And to present the figures today, we have our CEO, Mr. Jon Fredrik Baksaas; and our CFO, Mr. Richard Olav.And first, I leave the floor to you, Mr. Baksaas. Jon Fredrik Baksaas Thank you, Scott and good morning to everyone. And I’m of course, very happy to stand here today with this quarter results. They come forward very strong, they are solid. They build upon what we have achieved over the last couple of quarters, I have to say. And once again, I think, under quite difficult circumstances in many areas of the world, the economic area for the time being, we are coming through with some strong results. And we can be proud that our systems, our people and our company basically have found their way through this quarter, where competition is tough and where there are growth in some areas of the world and where the growth is being searched for in other areas of the world. At the same time, we have to think of those countries that have their practical problems for the time being. Primarily thinking of Thailand, in this respect, where the water problem, the flooding is so severe. And it’s assumed that it will take weeks before the effects of this has come to its full visibility and that society starts to work again. In the midst of this, we are delivering a quarter which is characterized by very strong operational performance across the group, really. The organic growth rate continues at 7%, which was in line with the first half of 2011. We have connected 5 1/2 million new subscribers in this quarter, primarily in Asia. But also in some European countries, we have come back into building new customer base. Along with this, we have been able also to improve the EBITDA margin and as a consequence also, the operating cash flow. And so, you’re getting to the figures here as I forgot to push the button. Sorry for that.
But with the solid EBITDA margin that we have been able to build through this quarter, we can now see a NOK5.5 billion operating cash flow in third quarter alone and that is all-time high. And it counts NOK15.3 billion of operating cash flow for the nine months of this year’s operation.Based upon this strong performance throughout this quarter, we have also adjusted our guidance for the year and Richard will come back to this more in detail. Let me then continue to the operating units and I want to start with Norway. Here we have in this quarter managed to get back into the marketplace and build the market position by adding 31,000 new customers in this quarter. That means that the negative trend that they had for the two previous quarters have turned and we’ve – based upon the revised service offerings that we came to the market within the second quarter, we now see a positive development in this third quarter. And as of the end of September, we had roughly 380,000 subscribers on these new price plans. And these new price plans, we believe, is important to relate between the bundles between data and SMS and voice in this new setup. The mobile ARPU figure in Norway is stable when we exclude the effect of the reduced termination rate that we embark upon beginning of this year. And really the growth in data both traffic and volumes are all setting the price erosion that we can see on voice and SMS at this stage. The revenue decline now close to NOK300 million compared to third quarter last year, is explained by reduced revenues from fixed voice roughly 100 million interconnect around 90 million and non-mobile revenues related to handsets et cetera, are also roughly NOK90 million. So, that explained the reduction from third quarter last year to third quarter this year. Read the rest of this transcript for free on seekingalpha.com