Telenor moves into the black

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Telenor, Norway’s largest telecoms group, moved into the black in the fourth quarter of 2005 reporting bigger-than-expected profits, driven by strong growth in mobile subscriptions.

Telenor’s pre-tax profits jumped in the fourth quarter to NKr1bn ($146.5m) from a loss of NKr430m while quarterly revenues grew by 26 per cent to NKr19.5bn from NKr15.5bn.

The company said mobile subscription growth was a record high. At the end of the fourth quarter the number of subscriptions in the consolidated mobile operations was NKr42.2m, growth being 57 per cent.

“The result was quite good, much better than the market had been expecting. Especially in Ukraine where the average revenues per user and earnings before interest, tax, depreciation and amortisation (ebitda) are very impressive considering the record high subscription growth,” said Lars Horslund, an analyst at Alfred Berg.

In the fourth quarter Telenor acquired Vodafone Sweden and increased its stake in Total Access Communications in Thailand.

The company said it expects a revenue growth in range of 25 to 30 per cent. “A continued high growth in ebitda is expected, in particular driven by the international mobile operations,” the company said.

Telenor said Asia as well as eastern and Central Europe would become increasingly important markets. The company also operates in Sweden, Denmark, Ukraine, Hungary, Montenegro, Malaysia, Thailand, Pakistan and Bangladesh.

The company expects an ebitda margin of 33 per cent in 2006 compared with 34.9 per cent achieved in the full year of 2005 and 35.1 per cent in the fourth quarter of 2005. Analysts said the guidance was cautious but expected.

The board proposed a dividend of NKr2 per share, compared with NKr1.50 a year before. Telenor shares were up 1.1 per cent at NKr69 in morning trade.

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