ANKARA: Telenor ASA, the Nordic region’s largest phone company, reported profit that fell short of analysts’ estimates as mobile service growth was offset by falling wholesale profitability and fixed-line sales in Norway.
Second-quarter adjusted earnings before interest, taxes, depreciation and amortization were 10.6 billion kroner ($1.3 billion), or 35 percent of sales, the government-controlled Norwegian carrier said in a statement Wednesday. Analysts predicted 10.8 billion kroner on average.
Telenor lost a wholesale agreement in Norway with Tele2 AB, hurting its profit margins, said Stefan Gauffin, an analyst at Nordea Bank AB in Stockholm. The pact with Tele2 was worth about 550 million kroner a year, he said.
The stock declined as much as 3.9 percent and was trading 2.7 percent lower at 178.2 kroner at 9:25 a.m. in Oslo, giving Telenor a market value of 267 billion kroner.
TeliaSonera AB won antitrust approval in February to buy Tele2 AB’s Norwegian operations, reducing the number of mobile networks in the country and challenging market leader Telenor. Tele2 had been using a national roaming agreement with Telenor for all its brands in Norway.
Asian Expansion
Telenor is expanding in fast-growing Asian and European markets to benefit from the surging demand for mobile services as it challenges TeliaSonera, Tele2 and TDC A/S in its Nordic home markets. Set to retire in August, Chief Executive Officer Jon Fredrik Baksaas has reduced costs while also investing in the carrier’s infrastructure in Norway, its largest unit. The company in May named Sigve Brekke to replace Baksaas as it expands its business in Asia.
