Telenor Slips To 4Q Loss On Danish Writeoff

FRANKFURT (Dow Jones)--Telenor ASA (TELN), Norway's incumbent telecom operator, Wednesday slipped to a fourth-quarter net loss due to a multibillion write-off on its Danish mobile operations.

But the company boosted sales by 14% to NOK15.7 billion, from NOK13.8 billion, on strong growth of its foreign mobile operations, and promised further sales growth in 2005 and improving profitability before exceptional items.

The Fornebu, Norway based company posted a fourth-quarter net loss of NOK382 million for the three months to Dec. 31, from a NOK999 million net profit the previous year, owing to charges including the recently announced NOK2.2 billion goodwill write-off on its Danish mobile unit Sonofon.

Analysts said the numbers were broadly below expectations.

Both the fixed-line business and mobile operations disappoint, Fondsfinans analyst Didrik Kjeldahl said. He also noted that the proposed NOK1.50 dividend undershot his estimate of NOK1.60. He has a reduce rating on Telenor.

At 1037 GMT, Telenor shares were down NOK1, or 1.7%, at NOK57.

"We know that we posted results slightly below expectations, but that is the price we paid for our focus on adding customers to secure future profitability," Chief Executive Jon Fredrik Baksaas told a press conference.

Telenor added 2.4 million mobile subscriptions in the fourth-quarter resulting in a jump of 38% in mobile revenues, especially boosted by another quarter of strong growth in emerging markets.

Unlike many of its European peers, Telenor is managing to grow its business by limiting exposure to the traditional domestic fixed-line business and by expanding heavily into foreign mobile phone markets, especially in emerging economies such as the Ukraine and Bangladesh. Telenor plans to launch mobile operations in Pakistan in 2005.

Other European incumbent telecom firms, such as Deutsche Telekom AG (DT), France Telecom SA (FTE) and Dutch Royal KPN NV (KPN), are all experiencing sales declines as they still depend significantly on the traditional wireline businesses they inherited from their governments and which are falling out of fashion due to the popularity of mobile services.

Telenor was still hit by this trend, however. In the fourth quarter, fixed-line sales fell 7.4% to NOK4.8 billion from NOK5.2 billion. The company cited continuing fierce competition and fixed-to-mobile migration. Lower voice volumes were partly offset by high growth in high-speed Internet subscriptions, which more than doubled in the year to 326,000 by the end of 2004.

For the year ahead, Telenor's Chief Financial Officer Torstein Moland promised an improving "profit before special items, and higher revenues" while the company will continue to buy back shares.

Company Web site: http://www.telenor.com

-By Joon Knapen, Dow Jones Newswires; +49-69-29725509; joon.knapen@dowjones.com

(END) Dow Jones Newswires "

Posted to the site on 16th February 2005