Telenor reports a mixed bag of results in Q2 impacted by VimpelCom and India

Telenor announced solid results for the second quarter of 2012, with the company set to refocus its Indian operation in order to move it toward self-sufficiency. It also said it is looking at the long game for its investment in Russian operator VimpelCom.

For the period to end-June, the company reported a profit of NOK2.07 billion (US$339 million), down 54 per cent from NOK4.49 billion in the prior year, on revenue of NOK25.36 billion, up from NOK24.36 billion. Telenor counted 151 million mobile subscribers at the end of June, compared with 128 million at the end of Q2 2011.

In the second quarter of 2011, Telenor’s bottom line benefited from a greater contribution from VimpelCom, as well as an accounting gain related to the VimpelCom/Wind Telecom deal, and foreign currency movements.

With regard to its Uninor business in India, the company said that due to the uncertain regulatory environment, it is “reallocating resources in the nine most profitable circles”. The intention is to shorten the time and reduce the cost for this business to become self-financed, reducing the risk of Telenor’s India investment.

In the second quarter of 2012, Uninor saw an operating loss of NOK619 million, compared with a prior-year loss of NOK1.21 billion, on revenue of NOK1.03 billion, up from NOK698 million. This unit has a total subscriber base of 33.7 million.

The company said that moving forward; it is still evaluating its funding options in India, both for Uninor and for the creation of a “NewCo” venture in this market.

Elsewhere, Telenor saw “continued good development in Telenor Pakistan and in DiGi in Malaysia with strong growth and margins”.

Less positively, “challenging” market conditions in Denmark and Bangladesh resulted in weaker than expected development during the period.

Telenor also said it is taking a “long term perspective” on its ownership of Russia’s VimpelCom. This includes supporting “necessary investments” to strengthen its position in its home market.