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Telenor Announces Share Buyback After Profit Meets Estimates

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July 21 (Bloomberg) -- Telenor ASA, the Nordic region’s largest phone company, reported second-quarter profit that matched analyst estimates and said it will buy back shares.

Net income declined to 4.49 billion kroner ($820 million) from 9.49 billion kroner a year earlier, Fornebu, Norway-based Telenor said today in a statement. An accounting change temporarily doubled VimpelCom Ltd.’s contribution in last year’s second quarter. Analysts had predicted profit of 4.5 billion kroner according to the average of 18 estimates compiled by Bloomberg.

Telenor added 8 million subscribers in the quarter, driven by Asia, where revenue gained 10 percent. Mobile revenue in Norway and Denmark declined. The Indian unit reduced its loss from the previous year and quarter. The company plans to buy back about 3 percent of shares, it said.

“Based on the trends so far this year, we maintain our revenue guidance and expect a somewhat stronger cash flow than indicated earlier,” Chief Executive Officer Jon Fredrik Baksaas said in the statement. Telenor predicted revenue growth of above 5 percent for the year.

The shares rose as much as 2.5 percent and traded at 87.85 kroner, up 1.5 percent, at 12:39 p.m. in Oslo.

While there is potential for market consolidation in Sweden and Denmark, “that window of opportunity has not opened up,” Baksaas said in an interview.

Norway Position

The company doesn’t expect to expand in Norway because of its market-leading position.

“We wouldn’t certainly be the guys that could entertain that with the leading market share we have,” the CEO said. “We would not be allowed, because of competition legislation, to consolidate in Norway.”

Telenor said today it will spend 11 to 12 percent of revenue on capital expenditure, compared with 12 to 13 percent earlier. The Uninor subsidiary in India will spend about 1 billion kroner compared with as much as 1.5 billion kroner predicted earlier, Telenor said.

To contact the reporter on this story: Diana ben-Aaron in Helsinki at dbenaaron1@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong in Berlin at kwong11@bloomberg.net

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