Telenor cuts 2026 outlook after Q2 earnings miss
Telenor's Second Quarter Results and 2026 Outlook Revision
By Agnieszka Olenska
July 16 (Reuters) - Norway's leading telecom operator Telenor cut its 2026 outlook on Thursday after reporting weaker-than-expected second-quarter earnings, citing slower revenue growth in Norway and Finland, higher operating expenses and macroeconomic challenges in Bangladesh, sending its shares down 12% and putting them on track for their worst day since October 2008.
Q2 Earnings Performance
Telenor's adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) fell 9% to 7.99 billion Norwegian crowns ($826.48 million) in the quarter. Analysts polled by Telenor had expected 8.30 billion crowns on average.
Telenor said results were hurt by slower-than-expected revenue growth in Norway and Finland, as well as a provision related to a VAT dispute involving Norwegian TV news channels.
Updated Financial Guidance
It now expects flat to slightly negative organic growth in adjusted EBITDA, down from flat to low-single-digit growth, and free cash flow of around NOK 10 billion, compared with NOK 10 billion to NOK 11 billion previously.
Factors Behind the Guidance Cut
The guidance cut reflected a mix of weaker market trends and technical factors, including a slower-than-expected recovery in Finland after intense competition late last year and continued pressure in its fixed-line market, CFO Torbjørn Wist told Reuters.
He added that the revised outlook also factored in the loss of revenue from True Corporation terminating a procurement contract, higher costs tied to M&A and restructuring projects at headquarters, and the deconsolidation of Telenor's IoT unit Connexion from the third quarter.
Previous Warnings and Market Reaction
In April, Telenor warned of a challenging second quarter against a strong year-earlier comparison and cut its 2026 adjusted EBITDA growth forecast to flat-to-low single digits from low-to-mid single digits.
Berenberg said Telenor's comments on the third quarter appeared relatively downbeat, with the company expecting operating costs to be above normal seasonality before efficiency measures begin to support performance from the fourth quarter.
Management's Response
Wist said management was not planning further guidance cuts and had incorporated current market conditions into its revised outlook.
Additional Information
($1 = 9.6675 Norwegian crowns)
(Reporting by Agnieszka Olenska; Editing by Matt Scuffham and Bartosz Dabrowski)
