Norway’s Telenor (TEL.OL) wrote off the worth of its Myanmar operation in mild of the nation’s deteriorating safety and human rights state of affairs, plunging the group right into a first-quarter loss and sending its shares decrease on Tuesday.
Whereas it is going to proceed to function in Myanmar, Telenor’s cell enterprise within the Asian nation, the place it has had a presence since 2014, stays severely restricted following the navy’s seizing of energy in a Feb. 1 coup. learn extra
The brand new regime imposed community restrictions for all operators, and on March 15 ordered a nationwide shutdown of cell information that has since lower Telenor’s subscription and visitors revenues within the nation in half, the corporate stated.
Nevertheless, it nonetheless added some 2 million customers in Myanmar in the course of the quarter as name volumes rose, rising its native buyer base to 18.2 million.
Whereas Telenor noticed an “irregular, unsure, and deeply regarding state of affairs” with “restricted prospects of enchancment going ahead”, Telenor would keep in Myanmar for now, CEO Sigve Brekke stated.
“Regardless of the difficult state of affairs we see within the nation we nonetheless consider we’re making a distinction when protecting our operations operating,” he advised an earnings presentation. “We try to proceed to take action to the very best of our skill.”
The corporate declined to touch upon whether or not it was life like to anticipate any money circulation from the Myanmar operation in the meanwhile, with Brekke including that the present uncertainty made it inconceivable to touch upon future choices.
“Our continued presence will rely on the event within the nation and the flexibility to contribute positively to the folks of Myanmar,” he stated.
Telenor absolutely impaired Telenor Myanmar in its first-quarter accounts, reserving a lack of 6.5 billion crowns ($783 million) and eradicating the operation from its total company outlook for 2021.
Because of the writedown, the Telenor group’s web earnings slumped to a lack of 3.9 billion Norwegian crowns within the first quarter from a year-ago revenue of 698 million crowns.
Telenor shares have been down 1.9% at 0829 GMT, lagging a flat Oslo benchmark index (.OSEBX).
Adjusted earnings earlier than curiosity, tax, depreciation and amortisation (EBITDA) fell 8% year-on-year to 13 billion crowns, in step with an analyst forecast of 13.1 billion crowns.
Telenor reiterated full-year steering for total natural income and earnings to stay unchanged year-on-year from 2020, excluding the Myanmar affect. It repeated that capital expenditure would quantity to between 15% and 16% of gross sales.
The corporate, which serves 187 million clients in 9 nations throughout Europe and Asia, a web achieve of 5 million for the reason that begin of the yr, final month introduced plans to merge its Malaysian unit with competitor Axiata (AXIA.KL), looking for to type a brand new market chief. .
($1 = 8.3020 Norwegian crowns)
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