Telenor Group swung to a net loss in Q2, primarily owing to an impairment on its Pakistan business and foreign exchange losses, though president and CEO Sigve Brekke (pictured) highlighted service revenue gains on an organic basis.
In a statement, Brekke also hailed receipt of regulatory approval for a planned merger between Axiata Group’s Celcom and Telenor subsidiary Digi in Malaysia. The transaction is set to be completed within 2022.
A proposed merger of True Corp and Telenor mobile units in Thailand is “progressing according to plan” and is expected to be completed this year.
Recent reports suggested the deal continues to face regulatory obstacles, however.
In terms of the outlook for the full year, Brekke stated Telenor still expects “low single-digit growth in organic service revenue” with EBITDA now tipped to be flat year-on-year.
Brekke noted organic service revenue growth of 1.5 per cent year-on-year. But Telenor swung to an NOK1.1 billion ($110.8 million) loss in the recent quarter, from a profit of NOK2.2 billion in the same period of 2021.
The company cited a NOK2.5 billion impairment booked in Pakistan, in part due to a “deteriorating macro-economic situation”.
In addition, Telenor Pakistan is being forced to pay a spectrum licence renewal fee of NOK4.4 billion, which it believes should have been more in the region of NOK2.9 billion based on prior renewals for other operators.
Telenor has challenged the terms of the licence renewal in court, but has so far been unsuccessful.
Group revenue of NOK28 billion was NOK878 million higher.
Telenor acknowledged increased global uncertainty related to high inflation and high energy prices, stating it had implemented measures to bring rising costs under control in the second half of the year.