Telenor raps Vimpelcom anew as Q4 shines

OSLO Tue Feb 8, 2011 2:05am EST

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OSLO (Reuters) - Norway's Telenor ASA (TEL.OL) took a fresh swipe at part-owned Vimpelcom VIP.N over its expansion plans on Tuesday as it posted a rise in fourth-quarter earnings on the back of strong Asian growth.

Adjusted earnings before interest, tax, depreciation and amortization were 7.18 billion crowns ($1.24 billion) in October-December, compared with 6.93 billion a year earlier and a 6.92 billion average forecast from a Reuters poll.

Telenor is battling to stop 36 percent-owned Vimpelcom's $6 billion bid to buy Italian mobile group Wind and control of Egyptian operator Orascom Telecom ORTE.CA from Naguib Sawiris.

"Telenor announced its opposition to the transaction because, from Telenor's perspective, it was not strategically nor financially sound for Vimpelcom shareholders," Telenor said in a statement on Tuesday.

"At this stage, we believe it is essential that Vimpelcom focus on regaining a loss of momentum in the Russian market."

Telenor has launched arbitration against Vimpelcom and issued an injunction to force Vimpelcom to issue shares to it if the cash-and-shares deal for Wind Telecom is completed.

2011 TARGETS

Telenor said its organic revenue growth would be above 5 percent in 2011 compared with 6 percent last year, while its EBITDA margin would remain around 31 percent.

It also announced a 3.80 crown dividend, which it said was "on the high end" of the payout policy range.

Telenor's fourth quarter organic revenue grew 13 percent in established Asian operations -- the growth engine of its business which ranges from core Nordic markets, through Eastern Europe and into emerging Asian markets.

"Overall, this is a positive report," said Tore Toenseth, an analyst at Argo Securities. "EBITDA was slightly better than expected... dividend was higher than consensus estimates and guidance was slightly on the positive side as well."

Telenor said that it expected its Indian unit Uninor to have an EBITDA loss of around 4 billion crowns in 2011 and capital expenditure of 1.0-1.5 billion, compared with last year's 4.25 billion EBITDA loss and 1.6 billion in CAPEX.

"India is a very competitive market coupled with a challenging regulatory environment," said Telenor, whose operations in India have come under the scrutiny of a corruption investigation engulfing the telecoms sector.

Shares in Telenor resume trading at 0800 GMT. ($1=5.792 Norwegian Crown) (Editing by Jon Loades-Carter and David Cowell)

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