Telenor misses profit estimates in 2013 fourth quarter

Telenor disappointed analysts with lower than expected EBITDA in the fourth quarter of 2013, despite growing the figure by nearly 10 per cent year on year.

The Norwegian operator's EBITDA hit 8.99 billion kroner (€1 billion/$1.47 billion) in the final quarter of 2013, missing an average 9.20 billion kroner predicted by analysts in a Reuters poll.

Post-tax profit fell from 2.5 billion kroner in the fourth quarter of 2012 to 2.4 billion. However, the company grew its annual post-tax profit by 4.3 billion kroner to 13.1 billion kroner in 2013.

Chief executive Jon Fredrik Baksaas said Telenor generated record EBITDA of 35.8 billion kroner in 2013, as higher revenues fuelled an increase in EBITDA margin from 32.3 per cent in 2012 to 34.5 per cent in 2013.

"During the year, we added 17 million subscribers, of which 5 million alone in the final three months," said Baksaas. "This growth was mainly driven by India, Pakistan and Bangladesh. These countries still represent a significant potential for further growth."

Based on its 2013 performance, Telenor proposed a big dividend increase that beat market forecasts, Reuters added. The operator said it would raise its dividend by 17 per cent to 7 kroner per share.

Telenor has around 160 million subscribers across Europe and Asia, and has been investing in Asia and Eastern Europe to compensate for slower growth in the Nordic region. The company recently signed a 15-year licence to provide communications services in Myanmar.

In its home market, Telenor said total mobile revenue fell by 3 per cent, of which 1 per cent was due to the impact of lower interconnect rates. The company added that 66 per cent of the contract subscriptions in the mobile consumer segment are now on bundled tariffs. It also recently won new spectrum in Norway for future LTE services.

Telenor may have missed expectations but its 2013 performance compares favourably with other Nordic peers: Tele2 president and CEO Mats Granryd this week promised to "remove uncertainty" surrounding the its business in 2014, after net income fell by a third in 2013.

(€1 = 8.36610 Norwegian kroner; $1 = 6.1124 Norwegian kroner)

For more:
- see Telenor's 2013 results statement
- see this Reuters article
- see this Bloomberg article

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