OSLO: Norway’s Telenor wrote down the value of its Myanmar operation in view of the country’s deteriorating security and human rights situation, sinking the group into first-quarter losses and sending its shares lower on Tuesday (4 May).
While it will continue in Myanmar, Telenor’s mobile business in the Asian country, where it had a presence since 2014, is severely restricted after seizing military power in a February 1 coup.
The company said the new regime imposed network restrictions for all operators and ordered a nationwide shutdown of mobile data on March 15 after Telenor’s subscriptions and traffic revenues were cut in the country.
However, it added some 2 million users to Myanmar during the quarter as call volume increased, increasing its local subscriber base to 18.2 million.
Telenor saw the “erratic, uncertain, and deeply concerning situation” as “moving forward with limited prospects for improvement”, while Telenor would remain in Myanmar right now, CEO Sigwe Brecke said.
“Despite the challenging situation in the country, we still believe that we are making changes while maintaining our operations,” he said.
“We strive to continue to do so to the best of our ability.”
READ: What does military rule mean for foreign investment in Myanmar?
READ: Commentary: Myanmar’s post-coup economy is in free fall
While the company declined to comment on whether it was genuine to expect any cash flow from the Myanmar operation, Breczek said the current uncertainty made it impossible to comment on future options.
“Our continued presence will depend on the development in the country and the ability to contribute positively to the people of Myanmar,” he said.
Telenor completely demolished Telenor Myanmar in its first quarter, losing 6.5 billion crowns (US $ 783 million) and deleting operations from its overall corporate outlook for 2021.
As a result of the Retardown, Telenor Group’s net earnings were a loss of 3.9 billion Norwegian crowns in the first quarter from a year-ago gain of 698 million crowns.
Shares of Telenor closed down 1.9 per cent at 0829 GMT, a flat Oslo benchmark index.
Adjusted income before interest, tax, depreciation and amortization (EBITDA) decreased 8 percent per year to 13 billion crowns, in line with analyst forecasts of 13.1 billion crowns.
Telenor reiterated full-year guidance for overall organic revenue and earnings to remain unchanged from 2020 to year-over-year, excluding the Myanmar effect. It reiterated that capital expenditure would be between 15 percent and 16 percent of sales.
The company, which serves 187 million customers across nine countries across Europe and Asia, posted a net profit of 5 million since the beginning of the year, with its Malaysian unit competing Axiata as a new market leader last month Announced plans to merge. .