Telenor reports improved profitability in 2Q13

23 Jul 2013

Norway’s Telenor Group has released its financial results for the three months ended 30 June 2013, with the company reporting a 2% year-on-year increase in revenues on an organic basis. For the three-month period under review Telenor generated total turnover of NOK25.746 billion (USD4.42 billion), up from the restated figure of NOK25.357 billion it saw in 2Q 2012. In the first six months of this year, however, revenues were down marginally, with Telenor seeing sales of NOK50.463 billion compared to NOK50.475 billion for the first half of 2012 (as per its restated figures). The performance over the first half of the year, Telenor said, had been bolstered by solid growth at its Thai operation DTAC, though this was offset by a ‘weaker Danish market and reduced scale of the Indian operation in addition to lower revenues from the Norwegian operation’.

Earnings before interest, tax, depreciation and amortisation (EBTIDA) for the second quarter of 2013 stood at NOK8.857 billion, representing a 9.8% year-on-year increase, while EBITDA rose from NOK50.475 million in H1 2012, to NOK17.280 billion in the same period a year later. Improved performances in India, Thailand, Sweden and Norway were all cited as factors for the increase in EBITDA, though once again Denmark was singled out for having performed less well; Telenor noted that EBITDA in the Nordic country weakened as a result of deteriorating market conditions. Adjusted operating profit in 2Q13 totalled NOK5.466 billion, up 21.3% from the NOK4.508 billion recorded in 2Q12, while in the first half of 2013 adjusted operating profit increased by 22.5% to NOK10.451 billion. For the second quarter of 2013 Telenor posted a net profit of NOK3.249 billion, compared to NOK2.067 billion in the year earlier period, with first half net profit standing at NOK6.850 billion, more than double the NOK2.651 billion recorded in H1 2012.

In operational terms, as at end-June 2013 Telenor Group reported a total mobile subscriber base of 152.729 million, an increase of just over half a percentage point year-on-year, but up by 3.5% against the end of the previous quarter. The lower year-on-year figure is arguably the result of Telenor’s Indian unit having shed subscribers as a result of licence revocations, but notably the second quarter of 2013 saw the cellco post its first subscriber gains in a year. Other notable performances were recorded by the group’s Pakistani and Bangladeshi units, which each saw customer numbers increase by more than two million apiece quarter-on-quarter, while at the other end of the spectrum the Danish, Hungarian and Serbian units saw subscriber declines in the three months to end-June 2013.

Commenting on the group’s performance, Telenor’s president and CEO Jon Fredrik Baksaas noted: ‘Telenor’s geographical footprint covers both advanced and growing economies, offering growth opportunities and profitability as demonstrated in the second quarter. At the same time, regulatory issues remain a challenge, particularly visible in Bangladesh and India during this period’. Meanwhile, the executive also confirmed previous financial forecasts, saying: ‘The Group’s organic revenue growth improved from the first quarter combined with stronger margins. With these trends, we maintain the outlook for this year.’

Norway, Telenor Group