Asset sales boost profits at Telenor

Norway's State-owned telecoms operator Telenor increased pre-tax profit last year by 13.9 per cent with a boost from the disposal of its Swedish directories business.

The company reported yesterday that 1999 pre-tax profit had risen by 13.9 per cent to a record of 3.3 billion Norwegian krone (€414 million) from Kr2.9 billion in 1998.

Sales increased by 15.8 per cent to Kr33.47 billion, while operating profit gained by 5.4 per cent to Kr4 billion, the company said in a statement.

Profits were swollen by the sale of the Swedish directories operations, which contributed a net profit of Kr683 million, and disposal of a stake in the Elkjoep electrical appliances chain, which generated a capital gain of Kr509 million.

But Telenor's foreign subsidiaries acted as a drag on the results, accounting for a net loss of Kr1.24 billion. The company has an option to take up a 49.9 per cent stake in Esat Digifone.

Telenor chief executive officer Mr Tormod Hermansen said 1999 had been marked by the failure of a merger plan with Sweden's Telia and increased competition in the domestic market. "Telenor, nevertheless, recorded the largest profit in its history," he said. "With such a point of departure, I have no doubts on the success of our future operations, both at home and internationally."

Telenor's mobile phone customers had reached two million and exceeded the number of fixed lines for the first time.

Its plans to merge with Swedish state-owned Telia flopped last year after the two sides failed to settle basic disagreements.