Telenor's first-half results for 2001: Continued satisfactory growth

During the first six months of 2001, revenues - excluding gains - increased by NOK 2.395 billion (13.8 per cent) compared to the corresponding period in 2000. During the second quarter, revenues excluding gains increased by NOK 988 million (10.9 per cent) compared to the same period last year. Growth was particularly strong in the Mobile Communications area.

EBITDA (operating profit/loss before depreciation, amortisation and write-downs) during the first half of the year was NOK 4.494 billion, excluding gains and losses. This represents an increase of NOK 215 million (five per cent) compared to the first half of 2000. "Our underlying operations have shown even stronger growth taken into consideration that the Group has increased activities associated with the development of new business within mobile telephony, Internet and broadband services," said president and CEO Tormod Hermansen. "Growth within mobile telephony is particularly strong. We now have in excess of 5.7 million mobile subscriptions based on the relative share of the companies in which we have ownership interests. We are also pleased that we have maintained a 73 per cent share of the fixed-line market in Norway," Hermansen added.

During the second quarter of 2001, Telenor made certain write-downs, mainly against goodwill, on some investments made abroad in 2000, exceeding NOK nine billion. NOK 7.5 billion was attributed to Sonofon in Denmark. "The write-downs have been made at the estimated fair value on the basis of the fall in the relevant markets and an adjustment of Telenor's expectations of earning potential," said Hermansen. "In addition to Sonofon, the largest write-downs were attributed to Telenordia AB and Scandinavia Online AB in Sweden, as well as individual Internet companies abroad."

Telenor's balance sheet has been considerably strengthened as a result of the proceeds from the sale of shares in VIAG Interkom in Germany and Esat Digifone in Ireland. Telenor's net interest-bearing debt at the end of the first half of 2001 was NOK 10.9 billion, or a reduction of NOK 29.6 billion since the beginning of the year. Sales gains of more than NOK 21 billion from Telenor's previous Irish and German investments contributed considerably to a pre-tax profit of more than NOK 12 billion, despite significant write-downs. Reduction in net interest-bearing liabilities and the strengthening of its balance sheet has put Telenor in a stronger financial position compared to many other telecommunications companies.

During the first half of 2001, a number of adjustments were incorporated into the Telenor organisation, which became effective July 1. Telenor's key activities are now organised into four core business areas: Telenor Mobile (mobile operations), Telenor Network Services (fixed-line), Telenor Residential (consumer market) and Telenor Business Solutions (business market). Telenor Media (directory services), Bravida (installation), EDB Business Partner (outsourcing and software development) and Itworks (consultancy and integrated ICT solutions) are considered related business areas. Telenor Satellite Networks, Telenor Satellite Mobile, Teleservice and a number of other activities, including R&D, have been organised into separate units directly under Telenor ASA.

For practical purposes, financial reporting continues to be in accordance with the former organisation.

To editors and journalists:
The financial report and presentation material will be available at: www.telenor.com