Telenor posts 2008 net profit slump

February 11, 2009

, OSLO, Feb 11 – Norwegian telecom operator Telenor posted lower net profits for the fourth quarter and full year 2008 on Wednesday, warning it would feel the full effect of the global economic crisis this year.

Last year, Telenor saw its net profit slump 26.1 percent to 13.31 billion kroner (1.53 billion euros, 1.98 billion dollars), with its fourth-quarter net profit slashed by more than a third to 2.21 billion kroner.

"The telecom sector has so far been less affected by the global economic slowdown than other industries, however we expect a more challenging business environment going forward," company chief executive Jon Fredrik Baksaas said in the earnings statement.

"As a result, the focus in 2009 will be on cost efficiency and capex (capital expenditure) control," he added.

For 2009, Telenor said it expected sales to be "in line" with its 2008 figure with an EBITDA (earnings before interest, taxes, depreciation, and amortisation) margin of around 34 percent.

Last year, the company\’s EBITDA margin stood at 35 percent while its sales grew year-on-year by 5.1 percent to 97.19 billion kroner in actual numbers. In pro forma terms, sales meanwhile grew 5.7 percent to 111 billion kroner, Telenor said.

The pro forma numbers include results from Ukrainian Kyivstar, which was incorporated into Telenor in the fourth quarter of 2007 and they provide the basis for the Norwegian company\’s 2009 forecasts.

Before taxes, the telecom operator booked a fourth quarter profit of 3.36 billion kroner last year, which was merely half its earnings for the same period in 2007 and far below analyst expectations of 4.4 billion kroner, according to a poll conducted for financial news agency TDN Finans.

Telenor\’s operating results and 2009 forecast however helped boost its share price by 1.16 percent in early afternoon trading Wednesday on the Oslo stock exchange, which was up 0.33 percent.

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