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Telenor warns on 2022 profit amid massive restructuring plans

·1-min read
Illustration shows Telenor logo

OSLO (Reuters) -Norway's Telenor warned on Tuesday that spiralling energy prices made it increasingly difficult to achieve its profit target and announced a restructuring of its Nordic business and a potential listing of its Asian unit.

Hit by soaring inflation and intense competition in many markets, the telecom operator's share price lost 27% year-to-date, while the stock closed at a 10-year low on Monday.

"The energy price development in the last couple of months makes it increasingly difficult to reach the guiding of flat EBITDA in 2022," Telenor said in a statement, referring to its earnings before interest, tax, depreciation and amortisation.

The company in a strategy update announced a new structure with closer cooperation among its Nordic businesses, while its Asian holding company could enter into "structural partnerships" or carry out an initial public offering.

The group set a goal of raising its annual dividend per share from 2023 until 2025.

Telenor, which has 175 million customers in eight countries across the Nordic region and Asia, in recent years sought to cut costs and boost its cash flow to make room for higher dividends and 5G investments.

The company's biggest moves to date include plans to consolidate markets in South-East Asia, with a $15 billion merger to form a telecoms leader in Malaysia and an $8.6 billion deal in Thailand.

Both units are run by Telenor Asia, which also operates the company's business in Pakistan and Bangladesh.

Telenor completed a withdrawal from Myanmar in March following last year's military coup, arguing the situation in the country had become untenable.

(Reporting by Terje Solsvik; Editing by Stine Jacobsen and Sherry Jacob-Phillips)