Strong momentum confirmed in fourth quarter

In the fourth quarter of 2010, Telenor Group reported revenues of NOK 24.9 billion, representing an organic revenue growth of eight per cent. EBITDA before other items was NOK 7.2 billion, EBITDA margin was 29 per cent, and operating cash flow margin was 14 per cent. For the full year of 2010, Telenor’s revenues was NOK 94.8 billion, EBITDA before other items was NOK 29.2 billion, EBITDA margin was 31 per cent and operating cash flow margin was 19 per cent. Telenor’s consolidated mobile operations added close to eight million subscriptions during the fourth quarter and 23 million during the year (1).

Published: 8 February 2011 07:00

Reading Time: 4 minutes

“Telenor confirms its position as one of Europe’s fastest growing telcos, with organic revenue growth of 8% and strong operational performance. In 2010, the Telenor Group had an operating cash flow of NOK 18 billion and a solid EBITDA margin,” said Jon Fredrik Baksaas, President and CEO of Telenor Group.

All-time high shareholder remuneration

“The share buyback programme for 2010 was completed in the fourth quarter. Together with the dividends paid out in May 2010 this resulted in an all-time high shareholder remuneration of NOK 9 billion. Based on the strong financial performance the Management and the Board of Directors propose a dividend of NOK 3,80 per share for 2010, a pay-out ratio in the high end of the dividend policy range,” Baksaas said.

Operational excellence

“Our operational excellence programmes are progressing towards the ambitious targets announced in 2010. Going forward, we expect significant long term effects from the ongoing investments in network modernisations. Our ambition is to improve efficiency and enhance customer experience through high quality services,” Baksaas said.

13% growth in Asia, overall satisfactory in Nordic and CEE regions

“The established Asian operations reported 13% organic revenue growth in the fourth quarter and obtained an operating cash flow above NOK 10 billion for 2010. Uninor in India added more than four million subscriptions in the fourth quarter and I am pleased to see that our go-to-market model is gradually improving. India is a very competitive market coupled with a challenging regulatory environment, and we are focusing strongly on establishing Uninor as an ultra low cost operator,” Baksaas said.

“In the Nordic and the CEE regions, overall performance was satisfactory. However, increased competition in some of the markets requires innovative market approaches and further cost measures,” Baksaas said.

VimpelCom

“In January, the Supervisory Board of VimpelCom approved the acquisition of Wind Telecom, and VimpelCom management said it would schedule a shareholders meeting to approve the issuance of new shares in connection with the transaction. In December, Telenor announced its opposition to the transaction because, from Telenor’s perspective, it was not strategically nor financially sound for VimpelCom shareholders. At this stage, we believe it is essential that VimpelCom focus on regaining a loss of momentum in the Russian market. On 28 January, Telenor commenced arbitration proceedings against VimpelCom and Altimo to secure Telenor pre-emptive rights and avoid dilution in the event the transaction is completed,” Baksaas ends.

Key figures

The table below contains key figures for the fourth quarter and full year of 2010, compared to the previous year. For more information please refer to the quarterly report.

Fourth quarter Year
(NOK in millions except earnings per share) 2010 2009 2010 2009
Revenues 24 858 22 418 94 843 90 748
EBITDA before other income and expenses 7 179 6 933 29 220 30 670
EBITDA margin before other income and expenses (%) 28.9 30.9 30.8 33.8
Adjusted operating profit 3 034 3 146 13 086 15 765
Adjusted operating profit/Revenues (%) 12.2 14.0 13.8 17.4
Profit after taxes and non-controlling interests 2 2 104 2 167 14 334 8 653
Earnings per share from total operations, basic, in NOK 1.29 1.31 8.69 5.22
Capex3 3 783 5 455 11 688 15 722
Capex excl. licences and spectrum 3 783 5 455 11 355 15 722
Capex excl. licences and spectrum/Revenues (%) 15.2 24.3 12.0 17.3
Operating cash flow4 3 395 1 478 17 865 14 948
Net interest-bearing liabilities 19 276 26 332

Contact:

Scott Engebrigtsen, Communication manager, Tel: +4790043484, E-mail: scott@telenor.com

To the editorial offices:

Press and analyst conference

In connection with the publication of the financial results, a press and analyst conference will be held on Tuesday 8 February 2011 at 09:00 hrs Norwegian time/CET. The presentation will be held in Auditorium A, Telenor Expo Visitors’ Centre, at the Telenor Headquarters at Fornebu outside Oslo. President and CEO Jon Fredrik Baksaas and CFO Richard Olav Aa will present the results. All presentations will be given in English.

Internet and mobile broadcast

The press and analyst conference will be broadcast live over the Internet, and a recorded version will be made available. During the live transmission, written questions may be submitted via the Internet. The conference will also be available live, and in a recorded version, on mobile phones. For more details please refer to www.telenor.com/en/investor-relations/reports/q4-2010

Conference call and Q&A

The press and analyst conference will also be available as a conference call. This service also allows participants to ask questions at a concluding Q&A session, which will be held immediately after the presentation and a brief Q&A session in the auditorium. Please register well in advance on (+47) 800 80 119 (from Norway) or (+47) 23 18 45 01 (from Norway or abroad).

Materials

English language versions of the full quarterly report and all presentations used during the press and analyst conference will be made available at www.telenor.com/en/investor-relations/reports/q4-2010 at 07:00 and 08:45 hrs Norwegian time/CET, respectively.

1 As of the fourth quarter the total mobile subscriptions stand at 203 million, including 92 million subscriptions from VimpelCom Ltd.

2 ‘Profit after tax and non-controlling interests’ included actual figures for Kyivstar GSM JSC and estimated results for OJSC VimpelCom until 31 December 2009. As of the first quarter 2010, figures for OJSC VimpelCom and Kyivstar GSM JSC were included with a one quarter lag. The second quarter included a gain related to the contribution of Kyivstar to the new entity VimpelCom Ltd. of approxiately NOK 6.5 billion. Please refer to the section ‘Associated companies’ on page 17 in the quarterly report for further details.

3 Capex is defined as capital expenditures from continuing operations.

4 Operating cash flow is defined as EBITDA before other income and expenses – Capex, excluding licenses and spectrum.