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Telenor Slips Into The Red As Krone Weakens

Telenor’s president CEO highlighted underlying strength and progress towards its long-term strategic goals during Q3, a period in which the operator slipped to a net loss due to factors including a weakening of the Norwegian Krone and one-off items in the comparable 2018 quarter.

In its earnings statement, Sigve Brekke declared Telenor’s performance during the quarter reflected “continued strong execution on our strategy”, with the operator focused on “growth, efficiency and simplification”. The executive was further buoyed by the operator’s progress in the opening nine months, which he said left the company confident of achieving its full year targets.

“Execution on our strategic agenda remains our focus and key driver for value creation going forward,” Brekke said.

He highlighted a deal announced yesterday (22 October) to create a joint venture with Nordic Entertainment Group covering the pair’s respective satellite entertainment units as an example of Telenor’s strategic focus. The venture will enable the companies to “extract synergies and deliver enhanced customer experience”, he explained.

Key moves during Q3 included closing an acquisition of Finnish operator DNA. Brekke noted a mandatory share tender offer period closed on 10 October “and resulted in an ownership share of 97.96 per cent”.

Having begun to bring DNA’s operations in-house, Brekke said Telenor is “now looking for opportunities to expand service offerings to Finnish business customers”.

The executive also noted progress in a modernisation programme at its domestic business, with mobile subscriptions up and operating expenses down, while its operations in Thailand and Myanmar maintained “the momentum seen earlier in 2019”, with stability in subscriber and traffic revenue in the former, and a return to growth in the latter

Telenor noted its Bangladesh business Grameenphone “continued to be the group’s main growth driver”, despite the rate of increases slowing as a result of regulatory changes.

Malaysia registered improvements in revenue, but its business in Pakistan proved troublesome, due to the reintroduction of a telecoms tax “and a difficult macroeconomic environment”, Brekke said.

By the numbers

Net income attributable to shareholders fell from NOK5.8 billion ($633 million) in Q3 2018 to a loss of NOK436 million, on revenue of NOK29.5 billion, up from NOK27.6 billion.

Income was hit by a mix of currency losses amounting to NOK1.8 billion due to the weakening of the Norwegian Krone along with a NOK2.5 billion income tax expense booked in August.

It added the Q3 2018 figure had been inflated to the tune of NOK1.7 billion by the sale of assets in Central and Eastern Europe.

The same factors were cited for a decline in net income over the first nine months of 2019, down NOK7 billion year-on-year to NOK6.5 billion, though Telenor noted the decline had been “partly offset by lower depreciation in Thailand”.―Mobile World Live

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