Telenor Q1 Net Profit Drops by 65%

Norway's Telenor Group has reported that its first-quarter profits slumped by 65% to NOK1.62 billion (US$250 million) from NOK 4.57 billion (US$700 million) a year ago. Revenues rose by 6.8% though to reach NOK24.78 billion (US$3.8 billion) according to a statement from the company. However, EBITDA rose to NOK 7.84 billion (US$1.2 billion) before foreign exchange losses.

Analysts anticipated a NOK 2.6 billion profit on sales of NOK 25.06 billion, according to the averages of estimates compiled by Bloomberg. In the first quarter of 2009 net results from associated companies was negatively affected mainly by estimated foreign exchange loss related to VimpelCom's loan portfolio.

"The business environment continues to be turbulent and we now experience some impact on the telecom sector, in particular influencing international traffic. However, the total traffic volumes are relatively stable. Among our markets, the Ukrainian economy is being the most affected by the financial crisis. In spite of negative revenue development, Kyivstar continues to deliver high margins and defend its strong revenue market share," said Jon Fredrik Baksaas, President and CEO of Telenor.

On the long-running legal battle over its holding in VimpleCom, he said that "Telenor regards the claim to be unfounded, and expects to be fairly treated by higher courts,"

"The closing of the Unitech Wireless deal in India on 20 March 2009 marks a milestone for the Telenor Group. An experienced management team is in place, and is currently preparing for launch of services during the second half of 2009," Baksaas added.

The company is maintaining its outlook for the remainder of 2009 - which is that organic revenues will be largely in line with 2008, but advised that it is "currently evaluating and implementing efficiency programmes" throughout the group.

 

Posted to the site on 5th May 2009