Telenor upgrades forecasts after better-than-expected 3Q results

27 Oct 2010

Telenor’s net profit in its third fiscal quarter of 2010 tumbled by more than 50% year-on-year as it continued to support its Indian unit, the Norwegian group has revealed. For the three months ended 30 September 2010 Telenor posted a net income of NOK1.771 billion (USD303.5 million), down from NOK3.489 billion in the same period a year earlier, despite turnover in the quarter rising to NOK24.096 billion, up 5.8% year-on-year from NOK22.767 billion. A drop in profit from the group’s Nordic operations, attributed to lower interconnection revenues in Sweden and Denmark and roaming charges in its home country, was also pinpointed as a contributory factor to the decline in overall profitability in the period. Earnings before interest, tax, depreciation and amortisation (EBITDA) meanwhile stood at NOK7.746 billion in the company’s third fiscal quarter, down 3.7% compared to 3Q09.

Despite the fall in net profit and EBITDA, Telenor’s results were above forecasts, with its Asian operation particularly performing better than expected; the group said that increased subscriber numbers had helped to offset the effects of the appreciation of the Norwegian krone against the invoicing currencies at its Asian units. On the back of the results Telenor has raised its organic revenue growth guidance for its 2010 financial year to 5%, up from its previous guidance of between 3% and 5%, while it now expects an EBITDA margin of between 30% and 31%. The group’s capital expenditure target for FY2010, excluding licences and spectrum, has also been cut to approximately 12% of revenue.

In terms of subscribers, at end-September 2010 GrameenPhone, Telenor’s Bangladeshi subsidiary remained the group’s largest unit by customers, with 28.6 million customers, while Telenor Pakistan was the next largest, reporting a customer base of 23.8 million at that date. Uninor, the group’s Indian unit, saw a significant boost in uptake, more than doubling its customer base against the previous quarter, ending September 2010 with 7.9 million subscribers.

Norway, Telenor Group, Telenor India