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Telenor Q1 profit falls 65%, VimpelCom hurts most

Telenor Q1 profit falls 65%, VimpelCom hurts most
AP
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First Published: Tue, May 05 2009. 02 59 PM IST
Updated: Tue, May 05 2009. 02 59 PM IST
Oslo: Norwegian telecommunications group Telenor ASA on Tuesday reported a 65% decline in first quarter net profits compared with a year earlier, hurt largely by its stake in Russian No.2 mobile operator VimpelCom and a decline in international calls.
The group, based on the outskirts of Oslo, said net profit for the January through March period was 1.62 billion kroner ($248 million) compared to 4.57 billion kroner a year earlier. Revenues rose to 27.1 billion kroner from 26.38 billion kroner.
“The business environment continues to be turbulent and we now experience some impact on the telecom sector, in particular influencing international traffic. However, the total traffic volumes are relatively stable,” said Telenor’s president and chief executive, Jon Fredrik Baksaas.
The major Nordic telecommunications group has been embroiled in a dispute with Russia’s Alpha Group over its 29.9% share in VimpelCom. In early April, Russian courts ordered Telenor to pay $1.7 billion in damages to VimpelCom in connection with an earlier acquisition in Ukraine.
A court also ordered Telenor’s shares in VimpelCom seized pending the outcome of a Norwegian appeal.
“Telenor regards the claim to be unfounded, and expects to be fairly treated by higher courts,” Baksaas said.
The Norwegian group’s net profit for the first quarter was dragged down by losses from associated companies, including VimpelCom, of 199 million kroner ($30.4 million) this year compared to a profit of just under 3 billion kroner a year earlier.
Telenor said its losses for VimpelCom were estimates, since it does not have access to detailed accounts because of the law suit.
Telenor operates worldwide, with about 150 million subscribers and a work force of about 38,000 people.
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First Published: Tue, May 05 2009. 02 59 PM IST