Telenor Still Hurt By Currency Pressures and Slow Recovery in Fourth Quarter; Trimming FVE

Telenor's fourth quarter fell short of consensus expectations on revenue and EBITDA, which is causing the shares to decline by almost 5% at the time of the writing. Currency effects, together with revenue pressures in Norway, Sweden and some Asian economies were the main contributors. Sweden, Pakistan and Thailand have seen their currencies depreciate compared with the Norwegian Krona during the past year, which reportedly caused subscription revenue to decline by 6%, despite remaining stable on an organic basis. The business recovery in some Asian regions like Malaysia and Thailand is also weaker than expected due to pricing pressure and a weak macroeconomic outlook. We trim our fair value estimate to NOK 147 (ADR: USD 17) from NOK 159 (ADR: USD 18.50) after adjusting our midterm revenue and margin forecasts.