Results
Telenor’s net income in 2006 was NOK 15,920 million, corresponding to NOK 9.44 per share. The corresponding figures for 2005 were NOK 7,646 million and NOK 4.47 per share. Net income was positively affected by a tax receipt of NOK 2.4 billion and sales gains of around NOK 2.3 billion.
Subsidiaries of Alfa Group (Storm and Alpren) have taken legal action in Ukraine to have Kyivstar’s choice of auditor disallowed. To date, this has resulted in temporary injunctions preventing Kyivstar from sharing financial information with its auditor and shareholders. As far as Telenor’s consolidated annual financial statements are concerned, this means that the results from Kyivstar are based on estimates. Although Telenor contests the decisions preventing Kyivstar from providing financial information to its auditor and shareholders, Telenor's Board of Directors has decided to deconsolidate Kyivstar temporarily with effect from 29 December 2006, as the prevailing conditions prevent Telenor from controlling or exercising significant influence over Kyivstar. Management is working hard to have these temporary injunctions lifted.
In 2006, profit before taxes and minority interests was NOK 21,528 million, compared to NOK 12,319 million in 2005. The 2006 figure was positively affected by special items (gains and losses on disposals, costs related to workforce reductions, loss contracts and write-downs) amounting to NOK 1.8 billion. In 2005, special items had an adverse effect on profit before taxes and minority interests of NOK 0.5 billion. Excluding special items, profit before taxes and minority interests grew by NOK 6.9 billion to NOK 19.7 billion in 2006. The increase was largely related to the growth in revenues in 2006 and the effects of acquisitions made in 2005 and 2006. DTAC was consolidated from November 2005, while Vodafone Sweden and Mobi63 were consolidated from January and September 2006, respectively
Operating profit in 2006 was NO K 17.7 billion, compared to NO K 11.4 billion in 2005.
Cash flow from operating activities grew by NOK 8.3 billion in 2005 to NOK 30.6 billion in 2006. The increase is related to the growth in operating revenues and the acquisition of Vodafone Sweden and Mobi63 in Serbia. In 2006, Telenor’s total investments amounted to NOK 41.2 billion, of which NOK 22.1 billion was investments in businesses. Capital expenditure increased by NOK 2.6 billion to NOK 19.0 billion. The increase was due largely to extensive network rollout in the international mobile operations in order to meet strong customer growth.
At year-end 2006, Telenor’s total assets amounted to NOK 148.4 billion, and the equity ratio (including minority interests) was 42.3%, compared to NOK 124.3 billion and 43.1%, respectively, at year-end 2005. Net interestbearing liabilities were NOK 43.3 billion, which represents an increase of NOK 12.4 billion during the year, caused by high levels of capital expenditure and new acquisitions. The Board is of the opinion that Telenor’s financial position is satisfactory.
