Telenor blames inflation for weaker quarter

Telenor posted a surprise 1.5% fall in second-quarter core earnings and cut its 2008 revenue growth target due to a strong crown and inflation.

A Reuters report also said shares in Telenor fell 4.4% to 81.80 crowns (€10.1, US$15.8), the lowest level since October 2006, and lagged a 1.8% rise on the DJ Stoxx Telecoms index.

Norway's Telenor, which has 153 million mobile clients in Europe and Asia, said soaring food and energy costs have squeezed consumers' budgets particularly in relatively poor countries such as Bangladesh, Pakistan and Thailand, the report said.

Earnings before interest, tax, depreciation and amortisation in April-June from 7.32 billion crowns (€904 million, US$1.41 billion) in the year-ago period.

The result missed all 16 forecasts from a Reuters poll of analysts, whose predictions had ranged from 7.31 billion crowns (€903 million, US$1.40 billion) to 7.64 billion crowns (€944 million, US$1.48 billion) and averaged at 7.5 billion crowns (€927 million,US$1.45 billion).

Telenor cut its 2008 revenue growth target to around 3% from 5%, but said strong performance of deconsolidated Ukrainian unit Kyivstar would keep the group's underlying revenue growth unchanged at around 6%.

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