Telenor Group’s full year net income slumps on India income tax expense, discontinuance of CEE operations

30 Jan 2020

Norwegian telecoms giant Telenor Group has published its financial results for the year ended 31 December 2019, posting a notable drop in net profit attributed primarily to ‘net results from its discontinued operations in Central and Eastern Europe (CEE), Telenor Microfinance Bank and Telenor India’, as well as an income tax expense of NOK2.5 billion (USD273 million) recognised in 3Q19 related to ‘the disallowed deduction of losses incurred in India’.

Total reported revenues for FY 2019 was reported at NOK113.94 billion, up 7.6% year-on-year, although Telenor Group noted that organic subscription and traffic revenues increased by only 0.4%, to NOK85.96 billion. For the twelve-month period under review, EBITDA decreased by 3% on an organic basis, with the company saying cost reductions had been offset by the negative gross profit development, though reported EBITDA actually increased by NOK1.1 billion, to NOK45.4 billion, primarily as a result of the consolidation of Finnish communications provider DNA. Net income for FY 2019, meanwhile, totalled NOK8.49 billion, down from NOK14.73 billion in the previous fiscal year.

Reported capital expenditures meanwhile, excluding licences and spectrum and not taking into account DNA, stood at NOK16.6 billion in 2019, representing a y-o-y decrease of NOK200 million; the company said higher CAPEX in Norway driven by the fibre rollout in its domestic territory had been more than offset by lower investment levels in Thailand. Following the consolidation of DNA, capex excluding licences and spectrum increased to NOK17.4 billion.

In operational terms, Telenor Group reported that its total mobile subscription base increased by 2.6 million in the final quarter of the year, and by 12.3 million over the full year period, to reach 186.0 million. It said the increase had been driven by customer growth in its ‘Emerging Asia’ operations (Pakistan, Bangladesh, Myanmar), while it also highlighted that Thai unit, dtac, had registered its first quarterly increase in customer numbers for almost three years in the closing trimester.

Looking to the year ahead, meanwhile, Telenor Group CEO Sigve Brekke was cited as saying: ‘Entering 2020, we will continue to focus on growth, efficiency and simplification, expecting organic subscription and traffic revenue growth of 0%-2% and organic EBITDA growth of 2%-4%, supported by continued modernisation efforts. The capex to sales ratio, excluding licences and spectrum, is expected to be around 15%.’

Norway, Telenor Group