Telenor’s first quarter results bolstered by Asian operations

4 May 2011

Norwegian telecoms group Telenor posted earnings before interest, tax, depreciation and amortisation (EBITDA) of NOK7.359 billion (USD1.4 billion), up from NOK7.151 billion a year earlier in the first three months of 2011; the company noted that strong growth at its Asian subsidiaries had helped offset lower earnings in the Nordic regions. With Telenor also stating that EBITDA had been positively affected by currency effects, the company reported total turnover of NOK24.092 billion for the three-month period ended 31 March 2011, representing a 7.8% year-on-year increase, driven by higher subscriber numbers in Asia and a positive currency effect of NOK255 million. Net profit for the quarter meanwhile stood at NOK2.793 billion, more than double the NOK1.038 billion that Telenor reported in the same quarter a year earlier; this was attributed in the main to the inclusion of Telenor’s share of the net result from Russia’s Vimpelcom, whereas in 1Q10 no such figures were included in Telenor’s income statement. Telenor has, however, reiterated its commitment to Vimpelcom, despite having failed to stop the Russian mobile operator’s USD6 billion acquisition of Wind Telecom assets in a deal that dilutes Telenor’s influence in the company. Commenting on the matter, Jon Fredrik Baksaas, Telenor CEO, said: ‘Telenor opposed the transaction, but we will continue to work in the best interest of Vimpelcom.’

On the back of the results Telenor reiterated its guidance for FY2011, stating that it expects organic revenue growth of more than 5% in the twelve-month period, while the company’s EBITDA margin is forecast at around 31%.

In operational terms, in the three months to end-March 2011 Telenor said that its consolidated mobile subscriber base had increased by nine million, with Uninor, the group’s Indian subsidiary accounting for more than half of those, adding 5.2 million net new subscribers in the quarter. The group’s Asian operations – DTAC (Thailand), DiGi (Malaysia), GrameenPhone (Bangladesh) and Telenor Pakistan – added a combined 3.9 million net new mobile subscribers, helping to offset customer number declines in some of the group’s Nordic regions; in 1Q11 Telenor’s Norwegian and Danish units reported subscriber losses of 18,000 and 33,000 respectively.

Norway, Telenor Group