Telenor’s Second-Quarter Profit Rises as Indian Loss Narrows
Telenor ASA (TEL), the Nordic region’s largest phone operator, reported second-quarter earnings rose as its unprofitable Indian business narrowed its loss.
Adjusted earnings before interest, taxes, depreciation and amortization rose to 8.86 billion kroner ($1.5 billion) from 8.06 billion kroner a year earlier, the Fornebu, Norway-based company said today. The operating loss of Telenor’s Indian business narrowed to 107 million kroner from 619 million kroner.
Chief Executive Officer Jon Fredrik Baksaas is expanding the company’s wireless Nordic network to fend off rivals that are cutting prices. The phone operator is also adding users in emerging markets while seeking to reduce costs by 5 billion kroner by 2015. Telenor agreed to buy Globul, the second-largest mobile carrier in Bulgaria, in April for 717 million euros ($946 million).
Telenor said it’s starting a buyback program to repurchase about 1 percent of its stock before the next annual general meeting.
“Telenor’s report was solid and I expect consensus to raise estimates, but the share buyback of 1 percent of shares is a slight disappointment since they bought back almost 3 percent last year,” said Stefan Gauffin, an analyst at Nordea Bank AB in Stockholm.
The carrier reiterated its expectation for a margin on earnings before interest, taxes, depreciation and amortization of about 34 percent of sales in 2013. The measure was 34.4 percent in the second quarter. The company cut its forecast in April for full-year revenue growth, excluding the effect of currency swings, acquisitions or divestments, to 2 percent to 4 percent.
“Telenor’s geographical footprint covers both advanced and growing economies, offering growth opportunities and profitability as demonstrated in the second quarter,” Baksaas said in the statement. “At the same time, regulatory issues remain a challenge, particularly visible in Bangladesh and India during this period.”
The state-controlled carrier’s shares rose 0.7 percent to 125.1 kroner at 11:02 a.m. in Oslo trading. The shares have gained about 11 percent this year.
To contact the reporter on this story: Adam Ewing in Stockholm at email@example.com