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Telenor First-Quarter Sales Miss Estimates on Stronger Krone

A pedestrian checks his mobile handset while passing a Telenor ASA mobile phone store in Budapest, Hungary. Photographer: Akos Stiller/Bloomberg
A pedestrian checks his mobile handset while passing a Telenor ASA mobile phone store in Budapest, Hungary. Photographer: Akos Stiller/Bloomberg

April 26 (Bloomberg) -- Telenor ASA, the Nordic region’s largest phone operator, reported sales that missed analyst estimates as the Easter holiday reduced customers’ phone and data use and the Norwegian krone strengthened.

Sales during the first quarter slipped 1.6 percent from a year earlier to 24.7 billion kroner ($4.21 billion), the company said in a statement. Analysts predicted revenue of 25.2 billion kroner, according to data compiled by Bloomberg. Telenor cited the krone’s appreciation and the effects of an earlier Easter in 2013 in its home market as reasons for lower revenue. The stock fell as much as 3.1 percent, the biggest intraday drop in almost 5 months.

Chief Executive Officer Jon Fredrik Baksaas is expanding the Fornebu, Norway-based company’s wireless network in its home markets to fend off rivals and boost revenue. As competition weighs on prices at home, the phone operator is adding users in Asia while seeking to reduce costs by 5 billion kroner by 2015.

“Telenor is still one of the few operators that is seeing growth, even though they lowered their guidance a bit,” said Sven Skold, an analyst at Stockholm-based Swedbank AB. “Norway was slightly lower than many expected, but Telenor attributes that to the Easter holiday and the leap day, which makes sense. For those holding Telenor for the long story, that’s intact.”

Telenor shares were trading down 2.7 percent to 127.1 kroner at 9:38 a.m. in Oslo, giving the company a market value of 198 billion kroner. The state-controlled carrier has seen its shares rise 14 percent so far this year, extending last year’s 14 percent gain.

Forecast Cut

Telenor reiterated its expectation of a margin on earnings before interest, taxes, depreciation and amortization of about 34 percent. The measure was 34.1 percent in the first quarter. The company forecast revenue growth, excluding the effect of currency swings, acquisitions or sales, of 2 percent to 4 percent this year from an earlier prediction of 3 percent to 5 percent.

Sales in Norway, its largest market with 26 percent of revenue last year, fell 0.9 percent to 6.16 billion kroner as the carrier’s mobile revenue declined. DTAC in Thailand boosted revenue 7.4 percent, while Telenor’s Malaysian division DiGi saw its sales gain 1.2 percent.

Net income rose to 3.6 billion kroner after the company reported a 3.9 billion-krone impairment charge in India a year earlier, Telenor said. Analysts predicted 3.55 billion kroner, the average of 12 estimates compiled by Bloomberg.

To contact the reporter on this story: Adam Ewing in Stockholm at

To contact the editor responsible for this story: Kenneth Wong at

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