OSLO - Norwegian telecommunications operator Telenor said on Wednesday its net profit was almost halved in the first quarter but said the drop was due mainly to a large capital gain that swelled the group's accounts in the corresponding period a year earlier.
In the January-March period this year, Telenor saw its net profit plunge by 45.1 percent to 1.7 billion kroner (270 million dollars, 209 million euros) from 3.1 billion in the same period in 2004.
Pre-tax profit also plummeted by 44.1 percent, to 2.8 billion kroner from 5.0 billion.
The drop was largely due to a 2.6-billion-kroner pre-tax capital gain from Telenor's sale of shares in the Greek group Cosmote last year, which was registered in Telenor's books in the first quarter of 2004.
Meanwhile, earnings before interest payments, taxes, depreciation and amortisation writedowns (EBITDA) remained relatively stable, at 5.1 billion kroner, while sales rose by 7.2 percent to 15.3 billion kroner from 14.2 billion.
Regardless of the capital gain, the quarterly profit came in lower than analysts' forecasts of EBITDA of 5.5 billion kroner and sales of 16.1 billion.
The Telenor share plunged on the news, shedding 6.25 percent in early trading on the Oslo stock exchange to 52.50 kroner.
Telenor, which is 53.2-percent owned by the Norwegian state, said its disappointing earnings were largely the result of an erosion in fixed line telephony customers in Norway, the consolidation of the Danish mobile group Sonofon which has lower margins, and increased competition in the mobile telephony sector.
Nonetheless, Telenor chief executive Jon Fredrik Baksaas said the group was "still seeing strong growth in our mobile operations, which currently generate 53 percent of Telenor's total revenues".
Telenor is present in about a dozen countries across Scandinavia, eastern Europe and southeast Asia, and has 21.4 million subscribers.
04/27/2005 09:52 GMT