Telenor sees slowdown in 2016 as profits plunge

Norwegian telecoms operator Telenor said on Wednesday it expected its earnings to slow this year after provisions and impairment losses heavily impacted its 2015 earnings.

Telenor sees slowdown in 2016 as profits plunge
Telenor chief executive Sigve Brekke presented the company's 2015 results in Oslo on Wednesday. Photo: Vidar Ruud / NTB scanpix
Telenor's share price slumped on the Oslo stock exchange, shedding 7.5 percent in early afternoon trading after the group's fourth quarter earnings came in below analysts' forecasts. 
Last year Telenor saw its net profit plunge by 62 percent for the full-year, to 3.4 billion kroner (€353 million, $398 million), with a loss of 2.1 billion kroner in the fourth quarter alone.
Gross margins on earnings before taxes, depreciation and amortisation (EBITDA) remained nonetheless stable, at 34.5 percent.
For 2016, the group said it expected its EBITDA margin to land at between 33 and 34 percent and forecast organic growth of two to four percent, after registering growth of 4.7 percent last year, which boosted sales to 128.2 billion kroner.
“We are … entering 2016 with increased competition in some of our key markets,” chief executive Sigve Brekke said in a statement.
In the fourth quarter, Telenor registered an impairment loss of 2.1 billion kroner in Denmark.
The country has been the source of recurring problems for Telenor: earnings are regularly in the red and the company had to axe plans to merge its Danish subsidiary with its Swedish rival TeliaSonera in September because of the risk of anti-trust issues.
The Danish impairment loss comes on the heels of a 5.4 billion kroner impairment loss Telenor registered in the third quarter for problems related to its 33-percent stake in Russian subsidiary Vimpelcom, which has been accused of corruption in Uzbekistan.
VimpelCom is being investigated in the United States and the Netherlands for alleged kickbacks paid to a company linked to the daughter of the Uzbek president, in exchange for licenses in the country in the 2000s.
Telenor has denied any wrongdoing. It has said it wants to offload its stake in the Russian operator but there are few potential buyers, according to analysts.
Meanwhile in Thailand, Malaysia and its home market Norway, which accounts for a quarter of Telenor's sales, margins are under pressure amid rife competition.
The group, which is 54-percent owned by the Norwegian state, now counts more than 200 million subscribers in a dozen countries in Asia and Europe.

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.


Today in Norway: A roundup of the latest news on Tuesday

Found out what’s going on in Norway on Tuesday with the Local’s short roundup of important news.

Today in Norway: A roundup of the latest news on Tuesday
The northern lights in Tromsø. Photo by Lightscape on Unsplash

One in ten international students in Norway has had Covid-19

Ten percent of overseas students studying in Norway, compared to just 2.9 percent of Norwegian students, have had Covid-19, according to the Students Health and Well Being Survey (SHoT).

Some 62,000 thousand of Norway’s 300,000 students responded to the survey.

READ MORE: Are Norway’s Covid-19 numbers on track for reopening?

Overall, nearly three percent said that they been infected with the Coronavirus, just over half have had to self isolate, and 70 percent took tests.

Woman in her 40’s charged with murder

A woman has been charged with murder in Halden, southeast Norway after a body was found in an apartment in the towns centre.

She will be questioned on Tuesday. A public defender has been appointed. 

Six police cars attended the scene at a small housing association in the centre of Halden.

A person found in the same apartment is being questioned as a witness.

Network provider Telenor’s revenues down 2.1 billion kroner compared to last year

Telenor’s revenues are down 2.1 billion in the first quarter and the company has written of its 6.5 billion kroner investment in Myanmar following Februarys military coup.

The mobile network operator became one of the first foreign providers in the country and had gained a 35 percent market share.

However, the country’s new military regime shut down the mobile network on March 15th.

“In Myanmar, we are experiencing a confusing and uncertain situation. We are deeply concerned about the development in the country,” The company stated in its quarterly report.

Norway and Sweden in reindeer border dispute

Swedish Sami reindeer herders will appear in court this week in a case against the Ministry of Agriculture and Food.

The Swedish Sami herders believe they have exclusive rights to grazing areas across the Norwegian border because they have lived in the surrounding area for hundreds of years. The Norwegian government rejects these claims.

The reindeer grazing convention will be central to the case; the convention facilitates mutual cross-border grazing for reindeer herds.

Sweden withdrew from the convention in 2005. However, Norway enshrined the convention in law in 2005.

483 Coronavirus infections recorded

On Monday, 483 new cases of Covid-29 were registered, an increase of 75 compared to the average of the previous week.

READ ALSO: Norway considers lifting measures for people who have had their first Covid vaccine 

This is down from 1150 cases registered during the peak of Norway’s third wave on March 16th.

This is partly because fewer infections are registered during weekends and public holidays, causing an uptick on Mondays.