Telenor nudges up 2010 revenue view, slims capex
OSLO (Reuters) - Norwegian telecoms company Telenor ASA(TEL.OL) nudged up its 2010 revenue growth forecast on recovering Asian economies and strong demand for mobile data in the Nordics, while slimming its capital expenditure plans.
Telenor achieved 13 percent year-on-year organic revenue growth in Asia in the second quarter due to a pick up in client spending as the region's economies improved, as well as more usage of high-end smartphones in Thailand and Malaysia.
"The economic environment in Asia continued to improve, fuelling the revenue growth in our operations," chief executive Jon Fredrik Baksaas said on Wednesday.
"In the Nordic region, high demand for mobile data is contributing to solid growth in organic mobile revenues."
Telenor said it expected 2010 organic revenue growth of 3 to 5 percent, which it said was slightly higher than its previous view of growth in the "low single digits". Analysts polled by Reuters expected 2 percent revenue growth in 2010.
Telenor affirmed an EBITDA margin of 28 percent and cut capex to 12 to 13 percent of revenue from its previous 13 to 14 percent.
Telenor also it would start buying back 50 million own shares, half from Norway's government and half from the market.
Second-quarter reported earnings before interest, tax, depreciation and amortisation fell to 6.9 billion crowns ($1.10 billion) from 7.9 billion a year ago, versus a forecast for 7.0 billion in a Reuters poll.
"The Q2 report is a bit on the weak side, but the fact that they are lifting their guidance and are being much more precise on the buyback program help make an overall good impression," Carnegie analyst Espen Torgersen said.
Handelsbanken analyst Jan Dworsky said second-quarter EBITDA levels were slightly disappointing, although the guidance changes and share buyback details were positive.
"Overall it's a bit mixed," he said.
Telenor's fall in core profit was triggered by its rollout of operations in India, where it affirmed forecasts for a 4.5 to 5.0 billion crown EBITDA loss for 2010.
Telenor trades at 11.3 times forecast 2011 earnings, more than most of its European incumbent peers thanks to its exposure to fast growing markets in East Europe and Asia. Sweden's TeliaSonera trades at 10.8 percent, with Dutch KPN at 9.1 times and France Telecom at 8.5.
Telenor shares are due to resume trading at 0700 GMT.
(Additional reporting by Ole Petter Skonnord; editing by Karen Foster)
($1 = 6.298 Norwegian crowns)
(For more business news on Reuters India click in.reuters.com)
- Tweet this
- Share this
- Digg this
Trending On Reuters
Religion and Politics
The head of India's most powerful Hindu group vowed to press ahead with a campaign to convert Muslims and Christians to Hinduism, stoking a sensitive debate that has stalled parliament and threatened Prime Minister Narendra Modi's economic reform agenda. Full Article