Telenor's Nordic businesses rebounded in the second quarter of 2014, but the return to winning ways failed to offset an NOK900 million (€108 million) decline in post-tax profit relative to the same period of 2013.
Jon Fredrik Baksaas, Telenor president and CEO
The Nordic region's largest mobile operator saw its profit after taxes and non-controlling interests fall from NOK3.2 billion in the second quarter of 2013 to NOK2.3 billion in the recent period. The decline came despite a NOK415 million rise in operating profit year-on-year, and a NOK1 billion increase in revenues compared to the second quarter of 2013.
First-half figures follow a similar pattern. Post-tax profit fell from NOK6.8 billion in 2013 to NOK5.9 billion in the opening six months of 2014, despite annual increases to operating profit and revenue.
Telenor largely relied on its Asia Pacific businesses for growth in the opening quarter of 2014. However, president and CEO Jon Fredrik Baksaas said that in the second quarter the company benefitted from "strong performance by our operations in Sweden" and Norway, where "our customers almost doubled their data usage from the second quarter last year."
Baksaas also named Thailand, Malaysia, Pakistan, Bangladesh and India as strong markets for Telenor in the second quarter, but noted that the "Danish telecom market remains challenging."
Analysts were pleased with Telenor's performance in the second quarter. Jefferies noted the company delivered "outright impressive momentum" in its goal to improve "monetisation through upselling in domestic mobile", and predicted analysts may nudge up their growth forecasts for the operator's annual earnings before interest depreciation and amortisation (EBITDA) by a "low single digit percentage".
Telenor's outlook for the rest of 2014--it predicts higher EBITDA margin and a low-single digit rise in revenue compared to 2013--also pleased the markets. The company's share price rose by about 3 per cent in morning trading after it announced the higher EBITDA margin target, RTT News reported.
Berenberg Bank analyst Barry Zeitoune said the solid results make Telenor one of the most attractive operators in the telecoms market, Bloomberg reported.
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