Telenor ASA, the Nordic region’s largest phone company, cut its forecasts for full-year sales growth and profitability as subscriber numbers fell in Thailand and Malaysia in the third quarter and after the carrier failed to merge its Danish operations with those of Swedish rival TeliaSonera AB.
Telenor said Wednesday it expects a margin on adjusted earnings before interest, taxes, depreciation and amortization of 34 percent to 35 percent this year and sales growth of around 5 percent, excluding acquisitions, divestments and currency fluctuations. That compares with a forecast in July of a margin of 34 percent to 36 percent and sales growth of 5 percent to 7 percent. The forecast now includes the Danish operations.
Telenor fell 2.2 percent to 166.7 kroner at 2:05 p.m. in Oslo. The stock has advanced 10 percent this year, valuing the carrier at 250 billion kroner ($29 billion).
Telenor is counting on stable domestic growth as profits decline in Thailand, its second-largest market, and after the carrier failed to merge its Danish operations with those of Swedish rival TeliaSonera AB. Chief Executive Officer Sigve Brekke plans to sell Telenor’s 33 percent stake in Vimpelcom Ltd., the Russian operator being investigated by authorities over connections to alleged bribes in Uzbekistan. Telenor took a charge of 5.4 billion kroner in the quarter related to the planned divestment.
Third-quarter adjusted Ebitda rose 15 percent to 11.8 billion kroner ($1.39 billion), or 37.2 percent of sales, the government-controlled Norwegian carrier said in a statement. Analysts predicted 11.4 billion kroner on average. Sales rose 15 percent to 31.8 billion kroner, compared with the 31.6 billion kroner average estimate.
Bangladesh-based Grameenphone saw its Ebitda jump 27 percent to 1.43 billion kroner in the quarter, while profit slipped 8.2 percent in Thailand after that unit lost 2 million subscribers in the period. Malaysian Ebitda fell 3.3 percent to 1.51 billion kroner. Pakistan almost doubled earnings to 909 million kroner.
Sales in Norway, the largest market making up about a quarter of revenue, slipped 1.2 percent to 6.6 billion kroner, while mobile and subscription traffic sales increased 5 percent and its average revenue per mobile user went up 3 percent. Operating profit in the country was hit by a 155 million-krone charge for workforce reductions. The carrier plans to pay a semi-annual dividend of 3.5 kroner per share Nov. 2.