Telenor, 1st quarter 1998
Fornebu
6 minute read
In the 1st quarter of 1998, the Telenor Group's consolidated operating income amounted to NOK 6,776 million, a 17.5 per cent rise compared to the same period last year. The operating profit in the 1st quarter amounted to NOK 774 million, compared to NOK 536 million in the same period in 1997. The growth in operating income and the improvement in the operating result come primarily from the growth in the market for network-based service.
"The result is satisfactory, seen in the light of the new competitive situation we are facing in traditional network services", says Torstein Moland, EVP and Chief Financial Officer.
Compared to the 1st quarter of 1997, total operating income rose by NOK 1,008 million in the 1st quarter of 1998. Of this amount, approximately NOK 700 million came from network-based services, after prices reductions which, had they not been introduced, would have represented income of roughly NOK 100 million. Directory business, installation work, and sales of IT services and customer equipment all developed in a positive manner.
Profit before taxes amounted to NOK 493 million, compared to NOK 387 million in 1997. This positive development was achieved despite associated companies contributing a negative NOK 291 million so far this year, compared to a negative NOK 82 million in the same period last year. The higher deficit was mainly generated by new companies. Several international commitments are in a start-up phase, and, as we have previously reported, these return a financial loss in spite of an estimated positive development in net asset values.
So far this year, the fixed network area has experienced a 22 per cent increase in the number of minutes called for telephony/ISDN compared to the same period last year. Adjusted for the effect of the higher number of working days in the 1st quarter of 1998 compared to the preceding year, the actual growth in the number of traffic minutes was 15 per cent. Local traffic and traffic to mobile operators recorded the highest growth rate, but long-distance and international traffic from Norway also grew. Internet traffic is rising sharply, and now accounts for 16 per cent of local traffic.
The mobile area continues to grow, and the number of GSM subscriptions rose by a net 81,000 in the 1st quarter of 1998, bringing the total number to 952,000. Telenor Mobil's operating income rose from NOK 1,074 million in 1997 to NOK 1,311 million in 1998. In addition to the increase in the number of subscribers, the increase in the number of minutes called per subscriber contributed to the positive development. Telenor Mobil's operating profit at the end of the 1st quarter was NOK 179 million, compared to NOK 134 million in the same period last year.
Telenor Bedrift recorded operating income of NOK 2,250 million in the 1st quarter, compared to NOK 2,074 million in 1997. The operating result was a loss of NOK 19 million, which is NOK 9 million better than in the same period last year. In the 2nd quarter, Telenor Bedrift will be restructuring is operations, focusing on increasing cost effectiveness and improving profitability.
Telenor's directory business is developing well in Norway and abroad. Yellow Pages on the Internet is a new growth area, and contributes to the development of this business area. There was a significant increase in the number of Internet subscriptions, and it is the Internet that is the locomotive for the sharp rise in local traffic. The installation business is continuing to grow, also among external customers.
In the 1st quarter of 1998, the Group invested NOK 2,008 million, up from NOK 1,421 million in 1997. 50 per cent of the investments were made in Norway and 50 per cent in activities outside of Norway, primarily in Viag Intercom (Germany), Connect Austria (Austria), and Kievstar (the Ukraine).
Financial report - 1st quarter 1998
Compared to the 1st quarter of 1997, total operating income rose by NOK 1,008 million in the 1st quarter of 1998. Of this amount, approximately NOK 700 million came from network-based services, after prices reductions which, had they not been introduced, would have represented income of roughly NOK 100 million. Directory business, installation work, and sales of IT services and customer equipment all developed in a positive manner.
Profit before taxes amounted to NOK 493 million, compared to NOK 387 million in 1997. This positive development was achieved despite associated companies contributing a negative NOK 291 million so far this year, compared to a negative NOK 82 million in the same period last year. The higher deficit was mainly generated by new companies. Several international commitments are in a start-up phase, and, as we have previously reported, these return a financial loss in spite of an estimated positive development in net asset values.
So far this year, the fixed network area has experienced a 22 per cent increase in the number of minutes called for telephony/ISDN compared to the same period last year. Adjusted for the effect of the higher number of working days in the 1st quarter of 1998 compared to the preceding year, the actual growth in the number of traffic minutes was 15 per cent. Local traffic and traffic to mobile operators recorded the highest growth rate, but long-distance and international traffic from Norway also grew. Internet traffic is rising sharply, and now accounts for 16 per cent of local traffic.
The mobile area continues to grow, and the number of GSM subscriptions rose by a net 81,000 in the 1st quarter of 1998, bringing the total number to 952,000. Telenor Mobil's operating income rose from NOK 1,074 million in 1997 to NOK 1,311 million in 1998. In addition to the increase in the number of subscribers, the increase in the number of minutes called per subscriber contributed to the positive development. Telenor Mobil's operating profit at the end of the 1st quarter was NOK 179 million, compared to NOK 134 million in the same period last year.
Telenor Bedrift recorded operating income of NOK 2,250 million in the 1st quarter, compared to NOK 2,074 million in 1997. The operating result was a loss of NOK 19 million, which is NOK 9 million better than in the same period last year. In the 2nd quarter, Telenor Bedrift will be restructuring is operations, focusing on increasing cost effectiveness and improving profitability.
Telenor's directory business is developing well in Norway and abroad. Yellow Pages on the Internet is a new growth area, and contributes to the development of this business area. There was a significant increase in the number of Internet subscriptions, and it is the Internet that is the locomotive for the sharp rise in local traffic. The installation business is continuing to grow, also among external customers.
In the 1st quarter of 1998, the Group invested NOK 2,008 million, up from NOK 1,421 million in 1997. 50 per cent of the investments were made in Norway and 50 per cent in activities outside of Norway, primarily in Viag Intercom (Germany), Connect Austria (Austria), and Kievstar (the Ukraine).
Financial report - 1st quarter 1998