Telenor profit plummets on higher costs
Telenor’s annual profit halved in 2011, as higher costs dragged the firm into the red during the fourth quarter.
Full-year profit of 7.9 billion Norwegian Kroner (€1.03 billion) is down 6.8 billion Kroner on the firm’s 2010 net income, and comes despite annual revenue growth of 3.6 billion Kroner. Much of the problems appear to stem from a tough 4Q11, when the firm slipped to a net loss of 2.5 billion Kroner compared to a 2.3 billion profit in 4Q10.
Jon Fredrik Baksaas, Telenor’s president and chief, revealed the fourth quarter loss runs against a flow of rising subscriber numbers and organic revenue growth. The bulk of subscriber additions came from the telco’s Asian operations, with revenue growth fuelled by data services. “The results from the Norwegian operation are impacted by high market activities this quarter to speed up migration to new bundled price plans,” the chief explains.
Baksaas also commented on a recent cancellation of 2G licenses in India, which will affect the telco’s local business Uninor. “We are working to protect our investments in all possible manners, and will consider every option prior to any further investments.
“We expect Indian authorities to conduct a swift and fair process,” he says.
The telco predicts Uninor will post an EBITDA loss of 2 billion Kroner during 2012. The company as a whole should enjoy revenue growth of at least 5% in 2012, and generate an EBITDA margin of between 32% and 33%.