Telenor profit hit by Uninor costs
Telenor raised its Q3 revenue 6% and improved its 2010 outlook after a strong performance from its Asian units, but continuing losses at its Indian startup and hefty one-off expenses shaved its profit by half.
The Nordic operator reported revenue of 24.1 billion Norwegian kroner (€2.6 billion) and a better-than-expected ebitda of 7.9 billion kroner.
Group profit of 1.7 billion kroner was down 51% on the previous corresponding period, partly due to expenses associated with establishing Uninor.
While a decline in profit had been foretold, the actual result missed analyst’s expectations of 2.05 billion kroner, Dow Jones said.
Telenor's strong Asian results led the company to raise its outlook for 2010. It is now anticipating organic revenue growth of around 5% and ebitda margins of 30%-31%. But Uninor is expected to register an ebitda loss of 4.5 billion kroner, and accrue capex of up to 2 billion kroner.
Sales from Asia grew 13% over the quarter. Thai unit DTAC raised its operating profit contribution 74% to 910 million kroner. Telenor owns 65% of the mobile operator.
Malaysia's DiGi, in which Telenor holds a 49% stake, reported a 34.5% higher operating profit of 576 million kroner, while the 55.8%-owned Grameenphone raised its contribution to 519 million kroner.
Telenor Pakistan posted an operating loss of 29 million kroner, but its parent said the result was better than expected following the severe floods in August.
Total subscribers from these subsidiaries increased to around 2.7 million from 2.2 million a year ago.
The Indian venture Uninor continued to soak up money as it rolled out services, with losses swelling to 1.3 billion kroner from 150 million kroner in Q309.
Uninor, which began services in late 2009, added 4 million subscribers for the quarter, doubling its customer base. ARPU also increased 8% sequentially.
Operating profit from the Nordic region slumped 16% to 1.68 billion kroner, and sales would have declined were it not for higher wholesale and interconnect revenue.