First-quarter results for Norwegian telecoms group Telenor were better than forecast, with the company revealing that earnings before interest, tax, depreciation and amortisation (EBITDA) had fallen to NOK7.088 billion (USD1.185 billion), down 10.1% year-on-year but ahead of analyst expectations. The plunge in EBITDA was, the company said, the result of the negative contribution from its Indian subsidiary, Uninor. Group revenue for the three months ended 31 March 2010 meanwhile fell to NOK23.952 billion, down 2.7% year-on-year, a decline which the company attributed mainly as a result of negative currency effects from the general strengthening of the Norwegian Krone, offset in part by subscription growth at the group’s Asian subsidiaries. Net income for the three-month period stood at NOK1.149 billion, having slumped by 45.6% compared to the same period a year earlier.
On the back of the results the group has said that it will cut CAPEX for Uninor in 2010 to between NOK2 billion and NOK2.5 billion, down from NOK2.5 billion to NOK3.5 billion, while it also revised its forecast for group-wide investment, noting that it now expects CAPEX as a proportion of revenues, excluding licences and spectrum, of between 13% and 14%. The company did, however, retain its other previous guidance figures, reiterating that it expects low single digit growth in organic revenues this year, coupled with an EBITDA margin before other income and expenses of around 28%.
Commenting on the results, Jon Fredrik Baksaas, Telenor president and CEO, said: ‘The Telenor Group started the year with a strong quarter. Current trends in the Asian and Nordic regions are positive and I am pleased to see that the Telenor Group had a rebound in organic revenue growth. Operating cash flow was close to NOK5 billion due to a combination of strong financial results and low investments.’