© Reuters. FILE PHOTO: Telenor’s logo can be seen in central Belgrade
By Victoria Klesty and Terje Solsvik
OSLO (Reuters) – Norwegian firm Telenor said on Tuesday it had written off the value of its Myanmar operation in light of the deteriorating security and human rights situation in the country, plunging the group into a loss in the first quarter.
Although it will continue to operate in Myanmar, Telenor’s mobile activity in the Asian country, where it has been present since 2014, remains severely restricted following the takeover by the military in a coup. Status as of February 1.
The company added some 2 million users in Myanmar during the quarter, bringing its local customer base to 18.2 million.
But the new regime imposed network restrictions on all carriers and ordered a nationwide mobile data shutdown on March 15 that has since halved Telenor’s subscription and traffic revenue in the country, the company said. .
“We see an irregular, uncertain and deeply worrying situation,” Telenor Managing Director Sigve Brekke said in a statement commenting on Myanmar.
“Due to the deteriorating outlook for the economic and business environment and the deteriorating security and human rights situation, we see limited prospects for improvement in the future.”
Telenor wrote down Telenor Myanmar entirely in its first quarter accounts, recording a loss of NOK 6.5 billion ($ 783 million) and removing the transaction from its overall business outlook for 2021.
The company aims to focus on the safety of its employees as well as access to services for customers and continued transparency, said Brekke.
Due to the depreciation, Telenor Group net profit fell to a loss of NOK 3.9 billion in the first quarter compared to a profit of NOK 698 million a year ago.
Adjusted profit before interest, taxes, depreciation and amortization (EBITDA) fell 8% year-on-year to 13 billion kroner, in line with an analysts forecast of 13.1 billion kroner.
Telenor reiterated its forecast for the full year for the overall organic revenue and profit to remain unchanged year-on-year from 2020. He reiterated that capital expenditure would amount to between 15 % and 16% of turnover.
The company, which serves 187 million customers in nine countries in 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 its competitor. Axiata, seeking to form a new market leader. .
($ 1 = 8.3020 Norwegian crowns)
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