Telenor Posts Profit as Sales Top Estimates on Norway, Asia

Telenor ASA, the Nordic region’s largest phone operator, reported a fourth-quarter profit as revenue beat analysts’ estimates on rising sales in its home market and Asia.

Net income was 3.19 billion kroner ($582 million) after a loss a year earlier, Telenor said today in a statement. Analysts predicted 3.41 billion kroner, the average of 14 estimates compiled by Bloomberg. Sales rose 2.2 percent to 26 billion kroner, compared with the 25.6 billion-krone average projection.

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 over the next four years.

“The continued solid performance by our Norwegian operation reflects high demand for both mobile and fixed-line Internet services,” Baksaas said in the statement.

Sales this year will probably increase 3 percent to 5 percent, excluding the effect of acquisitions and currency swings, Telenor said. Adjusted earnings before interest, taxes, depreciation and amortization will probably be about 34 percent of revenue, it said. The carrier wrote down 4 billion kroner of goodwill from its Danish operations.

Revenue Growth

Revenue in Norway, Telenor’s largest market, rose 2 percent to 6.52 billion kroner last quarter as the company added 14,000 Internet subscribers. Telenor’s Malaysian division DiGi last week reported that fourth-quarter sales gained 7.3 percent, while DTAC in Thailand boosted revenue 19 percent.

Telenor’s Ebitda margin target for this year of 34 percent was less than expected, Thomas Nielsen, an analyst at Pareto Securities in Oslo, said in an e-mail. He anticipated a margin goal of 35 percent. Telenor forecast capital expenditure as a percentage of sales this year at 12 percent to 14 percent, higher than an earlier prediction of 10 percent, he said.

Telenor shares slipped 0.4 percent to 118.6 kroner at 9:05 a.m. in Oslo trading, paring the gain this year to 5.7 percent. The carrier is recommending a dividend of 6 kroner a share, an increase from last year’s payment of 5 kroner.

The loss a year earlier was 2.71 billion kroner as the carrier recorded impairment charges for its Indian operation.

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