Telenor posts Q1 loss after writing off Myanmar business following coup
Norway’s Telenor (TEL.OL) said on Tuesday it had written off the value of its Myanmar operation in light of the country’s deteriorating security and human rights situation, plunging the group into a first-quarter loss and sending its shares lower.
While it will continue to operate in Myanmar, Telenor’s mobile business in the Asian country, where it has had a presence since 2014, remains severely restricted following the military’s seizing of power in a Feb. 1 coup.
The company added some 2 million users in Myanmar during the quarter, increasing its local customer base to 18.2 million.
But the new regime imposed network restrictions for all operators, and on March 15 ordered a nationwide shutdown of mobile data that has since cut Telenor’s subscription and traffic revenues in the country in half, the company said.
While Telenor saw an “irregular, uncertain, and deeply concerning situation” with limited prospects of improvement going forward, Telenor would stay in Myanmar for now, CEO Sigve Brekke said.
“Despite the challenging situation we see in the country we still believe we are making a difference when keeping our operations running,” he told an earnings presentation.
“We strive to continue to do so to the best of our ability.”
Telenor fully impaired Telenor Myanmar in its first-quarter accounts, booking a loss of 6.5 billion crowns ($783 million) and removing the operation from its overall corporate outlook for 2021.
As a result of the writedown, the Telenor group’s net earnings slumped to a loss of 3.9 billion Norwegian crowns in the first quarter from a year-ago profit of 698 million crowns.
Telenor shares were down 2.0% at 0722 GMT, lagging a flat Oslo benchmark index
Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) fell 8% year-on-year to 13 billion crowns, in line with an analyst forecast of 13.1 billion crowns.
Telenor, reiterated full-year guidance for overall organic revenue and earnings to remain unchanged year-on-year from 2020. It repeated that capital expenditure would amount to between 15% and 16% of sales.
The company, which serves 187 million customers in nine countries across Europe and Asia, a net gain of 5 million since the start of the year, last month announced plans to merge its Malaysian unit with competitor Axiata seeking to form a new market leader. .
