Telenor stock slides after small earnings miss, tightened guidance

Telenor reported third-quarter adjusted EBITDA of 9.54 billion crowns, slightly missing analyst expectations, and disclosed a 500 million Norwegian crown hit from higher 5G operational costs in Malaysia, leading to a more than 4% decline in its shares. While Nordic markets demonstrated steady growth, weaker trends in Asia, particularly the Malaysian 5G expenses, pressured results and prompted the company to narrow its 2025 guidance, reducing growth expectations across Nordic service revenues, Nordic adjusted EBITDA, and group-wide adjusted EBITDA.

Analysis

Telenor reported third-quarter adjusted EBITDA of 9.54 billion crowns, marginally missing analyst expectations of 9.60 billion, which prompted a more than 4% decline in its shares. A significant factor was a 500 million Norwegian crown negative adjustment stemming from elevated 5G operational costs within its Malaysian joint venture, CelcomDigi, as confirmed by CEO Schilbred Fasmer.

While Nordic markets demonstrated robust performance with 5.4% organic EBITDA growth, this was insufficient to fully offset the weaker trends and cost pressures in Asia. The company explicitly warned that future spectrum and data-related expenses in the Asian region could further constrain regional cash flows in the near term.

Consequently, Telenor has narrowed its 2025 guidance, signaling a more cautious outlook. Group-wide organic adjusted EBITDA growth is now projected at 5–6%, a reduction from its prior mid-single-digit forecast and below the consensus expectation of approximately 7%. This revised guidance also includes trimmed targets for Nordic service revenue and adjusted EBITDA growth.

Key Decisions for Investors

• Investors should closely monitor Telenor's ability to achieve its revised 2025 guidance, particularly the group-wide organic adjusted EBITDA growth target, and assess the ongoing impact of operational costs in its Asian segment.
• Evaluate the long-term implications of the 500 million Norwegian crown charge from Malaysian 5G operations, considering it as a potential recurring risk that could affect future cash flows and profitability in the region.
• Consider the balance between the steady growth in Nordic markets and the persistent cost pressures and potential cash flow challenges identified in the Asian operations when assessing Telenor's overall investment profile.