Indian write-down pushes Telenor to loss in 4Q11

8 Feb 2012

Norwegian telecoms group Telenor has revealed the financial impact of the Indian government’s decision to cancel a number of 2G licences, including those owned by its subsidiary Uninor. In releasing its financial results for both the three- and twelve-month periods ended 31 December 2011, Telenor announced a write-down of NOK4.1 billion (USD706 million) related to licences and goodwill in India following the Indian Supreme Court’s ruling, dragging it down to a net loss in the fourth quarter. For the final three months of the year Telenor posted a net loss of NOK1.94 billion compared with a net profit of NOK2.1 billion in the same period a year earlier. Full year profit, meanwhile, slumped to NOK7.94 billion, representing an almost 45% year-on-year decline.

Despite the group’s drop in net profit, turnover for both the final quarter and over the full year improved, with Telenor revealing it generated revenues totalling NOK25.43 billion in 4Q11, up from NOK24.86 billion a year earlier. In the year to end-December 2011 the group saw revenues of NOK98.52 billion, a 3.9% increase against the previous financial year. Earnings before interest, tax, depreciation and amortisation (EBITDA) for 4Q11 and FY11, meanwhile, were NOK7.42 billion (up 3.3%) and NOK30.53 billion (up 4.5%) respectively.

Looking forward, Telenor has also outlined its guidance for the 2012 financial year, noting that, based on its current group structure including Uninor, it expects to see organic revenue growth of more than 5%, while its EBITDA margin before other income and expenses is forecast in the range of 32%–33%. Capital expenditures are expected to be between 12% and 13% of revenues, excluding licences and spectrum.

In operational terms, at the end of 2011 Telenor’s consolidated mobile subscriber base totalled 140.42 million, up just over 26% year-on-year. Bangladesh remained the group’s largest subsidiary in terms of wireless customers and, having added 6.5 million new subscribers over the year, at end-December 2011 its total had reached 36.49 million. Uninor added the most new wireless subscribers over the twelve-month period, meanwhile, with 16 million new sign-ups increasing its total to 28.33 million.

Commenting on the group’s results, Telenor president and CEO Jon Fredrik Baksaas said: ‘The performance through 2011 once again confirms Telenor’s position as one of Europe’s fastest growing telcos … In 2011, we added 29 million mobile subscriptions, of which seven million [were] in the fourth quarter.’

Norway, Telenor Group, Telenor India