Telenor 3rd-quarter results


The market for IT-related services was characterised by a marked decline in demand during the third quarter of this year. Telenor has implemented considerable measures in order to adapt its business in this area to a lower demand level. These measures include manpower reductions.

Telenor has been working on restructuring its international Internet portfolio. A decision has been made to withdraw from its CSP businesses in Germany and Switzerland and scale down its operations in a number of other European countries.

As part of a broader cost-efficiency programme, reductions have also been approved with regard to the use of consultants and hired-in personnel. A recruitment freeze and travel restrictions have also been introduced.

Operating revenues excluding sales revenues increased in the first nine months of this year by NOK 3.119 billion, or 11.7 per cent in relation to the same period last year. The last three months saw an increase of NOK 724 million, or 7.8 per cent compared with the same period last year. There is still strong growth in revenues and profits in Telenor's Norwegian mobile business. Telenor's traditional fixed-line business also showed a positive underlying profit performance.

EBITDA (operating profit/loss before depreciation, amortization and write-downs) was NOK 6.590 billion, excluding gains and losses, at the end of the third quarter. After further adjustments for provisions, EBITDA amounted to NOK 7.085 billion, which is an increase of 4 per cent, or NOK 252 million compared with the same period last year.

"Underlying operations continue to show positive growth after the first nine months. This growth particularly applies to Telenor's mobile business in Norway. We are also pleased to have maintained our market share for fixed-line telephony in Norway since year-end", said Telenor CEO Tormod Hermansen.

"We are still expecting a tough market for IT-related services and have introduced a number of measures to reduce costs, including manpower reductions. The decision to withdraw from our Internet businesses (CSP) in Germany and Switzerland and scale down our Internet activities in a number of other European countries is expected to result in a positive EBITDA by the end of 2002 for this area", said Hermansen.

In the third quarter, Telenor undertook write-downs of NOK 2 billion, mainly in the form of goodwill in EDB Business Partner, the transatlantic underwater cable TAT-14 and its Internet businesses.

Gains of NOK 21 billion from the sale of Telenor's previous investments in Germany and Ireland have to a great extent contributed to a profit before taxes and minority interests of NOK 9.5 billion, despite the substantial write-downs and provisions.

Telenor's balance sheet has been strengthened considerably since year-end as a result of the sale of Telenor's shares in Viag Interkom in Germany and Esat Digifone in Ireland. Net interest-bearing debt was NOK 16.4 billion at the end of the third quarter, or a reduction of NOK 24.1 million since year-end.



Editor's note:
- The complete quarterly report can be found on the Internet at: www.telenor.com/ir
- Material from the press conference presentations will be available after the press conference at: www.telenor.com/ir