Improved contribution from affiliates boosts Telenor 4Q net profit

10 Feb 2010

Having released its financial results for the three months to end-December 2009, Norwegian telecoms group Telenor reported a better-than-expected net profit in the last quarter of the year. For the final three months of 2009 Telenor posted a net profit of NOK2.49 billion (USD418 million), up 26.9% compared to the same period a year earlier, with the company attributing the rise to better contributions from its affiliated companies. For full year 2009 however Telenor noted that its share of profit from associated companies had been negatively affected by foreign exchange losses, primarily related to Russian operator Vimpelcom’s loan portfolio, coupled with an adjustment of previously estimated figures for the Russian cellco in 2008. As a result, for FY 2009 Telenor posted a net income of NOK8.98 billion, down from NOK13.1 billion in 2008. Revenue for the group in the final three months of 2009 totalled NOK24.19 billion meanwhile, down 6.5% year-on-year, with 2009 full year revenue standing at NOK97.65 billion, compared to NOK96.17 billion a year earlier. Earnings before interest, tax, depreciation and amortisation (EBTIDA) in 4Q 2009 were NOK6.69 billion, a decline of 15.2% against NOK7.89 billion in 4Q 2008.

Commenting on the results, Jon Fredrik Baksass, Telenor CEO, said: ‘In 2009 the main focus within the Telenor Group has been to secure market positions while scaling our activities to a challenging business environment. The full year results demonstrate our commitment to these priorities…In spite of weak macro economic conditions, our operations in Central and Eastern Europe have also delivered solid results throughout the year and the Asian operations have shown substantial improvement.’

Telenor, which last year agreed a deal with Russia’s Alfa Group to merge Ukraine’s Kyivstar and Vimpelcom into a combined emerging markets telecom operator, said that the merger process in on track, and is expected to be completed by mid-2010 (with separate reports today saying that the share transaction will be done by mid-April). Elsewhere, it has been reported that Telenor has also boosted its stake in Indian mobile operator Unitech Wireless, which operates under the Uninor banner. Its partner in the joint venture, Indian real estate company Unitech has said that it has now received the money for a further 7.15% stake in Uninor, which brings Telenor’s holding in the cellco to 67.25%.

Norway, Beeline (Russia), Kyivstar, Telenor Group, Telenor India, VEON