Telenor Pakistan in CY22

Despite losing more than a million members, Telenor Pakistan, the third-ranked mobile broadband provider, experienced a modest increase in the top line. However, this growth was insufficient to maintain profitability. While total revenues increased by 4% from the previous year to Rs109.9 billion in CY22, this growth was negative in real terms because it was considerably behind the economy’s double-digit inflation rate. The average monthly revenue per user increased marginally by 2% from the prior year to Rs179 in CY22.

The top line for Telenor Pakistan’s parent Telenor Group was negative 7% in its own currency due to the collapse of the PKR throughout the analysis period. High inflation, weak economic growth, and general instability restrict FDI inflows into the nation, particularly for telecoms. Regarding Telenor Pakistan, their capital expenditures fell by 9% to Rs12.4 billion in CY22.

Despite a decline in topline, EBITDA growth was marginally stronger at 9% year over year, reaching Rs61.3 billion in CY22 (still negative 3 percent in NOK terms due to PKR depreciation in the period). As a result, the EBITDA margin increased from 53.1 percent in CY21 to 55.7 percent in CY22. Contrasting dramatically with the enormous operational loss, which was also affected by the impairment loss, high gasoline, and electricity prices, as well as flood-related damages.

Following the commencement of the IMF program, it is expected that operating challenges would grow as more rises in fuel prices, power tariffs, and interest rates are anticipated. The Telenor Group said that “Telenor Pakistan is still sensitive for impairment” after noting that the “recoverable amount” of Telenor Pakistan assets was NOK 5.8 billion as of June 30, 2022. That valuation amounts to around Rs123 billion (nearly $450 million) using the average exchange rate for CY22. Despite the fact that nothing to that effect can be found in the most recent financial reports, there were rumors in the late part of last year that Telenor Group was thinking of leaving Pakistan.

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