Telenor reports $1.31 billion gross profit in Q2

Norwegian telcom major Telenor Group has reported gross profits (earnings before interest, taxes, depreciation and amortisation) of $1.31 billion (NOK 8 billion) in the second quarter of 2012.

Telenor Group reported revenues of $4.15 billion (NOK 25.4 billion), representing an organic revenue growth of five per cent.

EBITDA before other items was NOK 8 billion. EBITDA margin was 31.7 per cent and operating cash flow was NOK 5.1 billion, the company said in a release.

The group added five million new customers in the period, taking its total subscription base past 150 million.

"The Telenor Group's improved operational performance resulted in more than five per cent organic revenue growth and solid margin improvement in the second quarter. Our presence in the Nordic region and the growing Asian economies demonstrates the benefits of the geographical diversification in the group.

Our consolidated mobile operations added five million new customers during this period, bringing the subscription base above the 150 million mark," said Jon Fredrik Baksaas, president and CEO of Telenor Group.

"In Norway, we continue to invest to strengthen our superior coverage position, enable new content services and manage the rapid transition to data,'' he added.

Telenor has so far this year invested two billion Norwegian kroner and expect to invest four billion this year.

Its Norwegian mobile operation is steadily seen improving its performance through healthy customer growth and lower operating expenses with increased migration to bundled tariffs.

Telenor also reported strong growth in Pakistan and in DiGi in Malaysia with strong margins. The broadcast business also delivered good performance.

However, Telenor said, the challenging market conditions in Denmark and Bangladesh resulted in weaker than expected revenue development this quarter.

Re-allocation of resources in India

"Uninor in India managed to add more than two million subscribers this quarter. Impressive efforts are being made to keep up momentum during this challenging period.

As a response to the uncertain regulatory environment we are now re-allocating resources to the nine most profitable circles.

In this manner, we aim to shorten the time and reduce the cost for the operation to become self-financed, thereby reducing the risk of the India investment," said Baksaas. (See: Telenor to scale down India operations from 13 to 9 circles)
 
Telenor also extended the share buy-back programme of three per cent of the outstanding shares to a third year in a row. ''With this buyback programme as a supplement to the dividends paid in May a total of approximately 12.6 billion Norwegian kroner will be returned to shareholders in 2012, thereby confirming our ambition to deliver healthy shareholder remuneration," said Baksaas.